Minority Report: The 3G iPhone has landed

Some Apple watchers got themselves overexcited in the run-up to this week's announcements. But even though the launches turned out to be short on shocks, there's still plenty to chew over, says Seb Janacek.

If you'd followed the rumbling of the Apple rumour mill there were no big surprises at the company's Worldwide Developer Conference on Monday.

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That Steve Jobs would announce a 3G version of the iPhone was not in doubt. That the new device would feature a GPS device was also highly likely. The subsidised rates were also widely predicted.

There was nothing on new Mac hardware and no sign of the ghostly 'tablet Macs' some analysts had predicted. That didn't stop some people complaining that it didn't deliver enough. But then again there's no pleasing some - especially if you believe everything you read online.

The other big announcement was the upgrade of the Mac.com suite on online services that has remained largely unchanged for a number of years and of questionable value for money. More on that on the moment.

As predicted, the main focus of the show was on the iPhone. Other than a cursory mention of the new version of OS X for Mac, the keynote speech at the Worldwide Developer Conference was the iPhone and the developer community, and rightly so. It's their moment in the sun anyway.

As far as the world's media was concerned, the focus of attention was the new 3G iPhone. The key product revisions were faster 3G network access and a GPS chip to tie in with the company's focus on location-based services.

The form factor didn't change much. Rumours of a physical keyboard were always fanciful given the company's evangelism of the iPhone's touchscreen interface.

The cheaper prices struck at the heart of the main criticism of the iPhone since its June 2007 launch, with prices slashed to make the phone more palatable to a larger proportion of consumers.

That Apple will hit its target of 10 million iPhones sold by the end of 2008 is no longer in doubt. Strong new features, combined with aggressive pricing will ensure the iPhone sails past the 10 million mark easily.

Jobs said six million iPhones had already been sold and although it now faces a month with low inventory until 11 July, the demand for iPhone remains high.

Apple also announced that by the end of 2008 the device will be available in 22 territories worldwide. Interestingly, China was not one of the countries down to receive the iPhone. That alone could have contributed millions in sales.

The initial high-premium iPhone sales model Apple launched last year was never going to be sustainable. After initial strong gains the company lost market share in the smart phone sector last month.

That the reduced, subsidised price will cut into Apple's margins is certain. But this will be balanced by the sheer volume of sales it can expect from July onwards.

As Jobs himself admitted, 56 per cent of potential purchasers were put off the iPhone by the price. Plus, by shifting to a traditional sales model it can worry less about users jail-breaking the phone to run on alternative networks.

In all, the iPhone 2.0 represents a strong upgrade for Apple. The disappointment among some people that more wasn't announced says more about the unreasonable levels of high public expectation around Apple keynotes than it does about the product's feature set.

The strong emphasis on Microsoft Exchange ActiveSync also underlines the company's focus on enterprise market and you can expect the device to be marketed at corporate users heavily in the coming months. In the UK, O2 has already announced business tariffs.

Then there was the MobileMe announcement. The .Mac suite of services and software has long languished in Apple's backwaters. The new suite comes to the fore and positions itself as the missing link between the company's three pillars - or chair legs as Jobs described them - the Mac, music/iPod and iPhone.

It's Apple's first big push towards cloud computing and, with the typical Apple focus on convergence and user experience, aims at making the three work together seamlessly.

As a six-year user of .Mac, the £79 hit on my credit card which goes through every October will suddenly result in a lot more return on investment.

But a big focus of the keynote was dedicated to the initial fruits of the Apple developer community in response to the release of the iPhone software development kit (SDK) released earlier this year.

The SDK has been downloaded more than 250,000 times, according to Jobs, and the initial range of apps showcased the USP of the iPhone, that the absence of a physical keyboard allowed developers a free rein to craft their own ways of interacting with software.

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The third-party applications market is absolutely central to the ongoing success of the iPhone and Apple. In a previous column I wrote that Apple and Google's entry into the mobile phone market would accelerate and invigorate the concept of the mobile phone as a platform.

While this platform already exists, it would take the arrival of search, application specialists to capture the imagination and bring years of success to bear.

Not everyone is happy. There are a surprising number of angry first generation iPhone users out there who feel short-changed. In six months time there'll be a 32GB version of the iPhone in stores and the July model will be old hat, a year later a higher capacity version with a better screen, better battery life and more features. That is the price you pay for being an early adopter.

It's not as if the 3G update was a secret. The CEOs of both Apple and AT&T had previously announced the faster network capability would arrive on the device in 2008.

Finally, given Apple's decision to ditch the metal case and add a plastic back to the iPhone it will be interesting how this ties with its commitment to producing greener products. Greenpeace, which has long run a damaging PR campaign against Apple's environmental record, will no doubt feel aggrieved.

Expect the anti-Apple campaign to swing back into action any time now. Perhaps about the same time that huge queues start forming around stores selling 3G iPhones on 11 July.