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iPhone 2.0: Lower price and "amazingly zippy"
What will this mean for RIM?

By Reuters

Published: Tuesday 10 June 2008

Apple unveiled a next-generation iPhone last night with faster internet access that will run on advanced wireless networks and sell for as low as $199 - half the current entry-level price.

Improved email features for the iPhone are intended to woo business people, while its ability to run on faster networks is key to Apple's push to gain market share in Europe and Asia.

Steve Jobs, Apple CEO, said: "It's amazingly zippy," showing off the encore to a device that melds a mobile phone, iPod media player and web browser. The new iPhone, available in black and white, loads internet pages about 2.8 times faster than the original, Jobs said.

Analysts said it would change the stakes in the mobile market given its price, business-oriented services, and speed.

Tim Bajarin, head of Creative Strategies, said in reference to the price: "It changes the game for all smart phone makers."

An entry-level version of the new iPhone, with 8GB of memory, will cost $199. A version of the new iPhone with twice the memory will cost $299. Both will go on sale in 22 countries on 11 July.

Shannon Cross of Cross Research said: "This positions Apple well vis a vis other smart phone competitors such as Nokia and RIM, [the] iPhone is no longer an expensive device. It's now priced at the mass market."

The new iPhone will run on 3G wireless networks and includes satellite navigation capability, Jobs told developers at the conference in San Francisco last night.

A new service, 'MobileMe', will send email and other information to iPhones automatically, similar to Microsoft Exchange email server product. The pay service will also offer web applications intended to make the phone work more like a desktop computer.

Ben Wood, research director of UK-based CCS Insight, said of MobileMe: "It clearly puts them in a competitive position on the services side against Google, Microsoft and most importantly Nokia."

Apple has sold six million iPhones, Jobs said, and analysts say the business could eventually match the size of its Macintosh computer or iPod businesses.