On Monday, June 9, 2008, Apple hosted its annual developer show, the Worldwide Developer Conference (WWDC), in San Francisco. As with the March 2008 event at which the company announced its iPhone 2.0 software platform, the WWDC keynote featured Apple CEO Steve Jobs as well as two underlings, Scott Forstall, the senior vice president of iPhone software, and Phil Schiller, Apple's senior vice president of product marketing. While the March event focused solely on the features of the iPhone 2.0 software platform, which will run both on original generation iPhones as well as second-gen (and awkwardly named) iPhone 3G devices, this week's event was split between three topics: iPhone 2.0 software for developers, iPhone 3G, and MobileMe, Apple's replacement for the .Mac online service.

In this article, I'd like to focus on the iPhone 3G, though by necessity the other keynote topics will pop-up from time to time because they're very much related. (For more information about the iPhone 2.0 software platform, please see my Apple iPhone 2.0 Software Preview. I will be writing a separate preview of MobileMe in the near future.)

Before getting started, I'd like to point out a simple bit of advice, and I cannot stress this enough: You need to get an iPhone. Sooner rather than later. With Apple dropping the entry price on this innovative device to just $200, while fixing all of the major issues I described in How Apple Can Fix the iPhone in 2008, there are precious few reasons to ignore this seismic shift in mobile and cloud computing. (One potential reason is the cost of the data plan: It looks like the minimum monthly outlay for an iPhone in the US is going to be $70 before taxes, about $10 more than it was before.) I've said it before and I'll say it again: The iPhone is a dramatically important computing platform and one you should not ignore. Trust me, once you've used an iPhone, that Blackberry or Windows Mobile device you're settling on now will seem like ancient Soviet-era technology by comparison.

OK, on to the iPhone 3G-related bits of the WWDC keynote, along with some commentary...

The iPhone in Apple's product lineup

During the introductory bits of the keynote, during which Jobs noted that the "SOLD OUT" event garnered 5200 attendees (and not 52,000 as widely "reported" at the time by over-eager blogger kiddies), we were provided with some interesting information showing how important the iPhone is to Apple. First, Jobs noted that the number of iPhone sessions at the show, 62, was almost equal to the number of Mac sessions at the show, 85.

Even more tellingly, Jobs explicitly noted that Apple's business now has three core parts: The Mac, Music (iPod and iTunes), and, now, the iPhone. Jobs then went on to ignore the first two parts, dedicating the entire keynote to the company's newest--and, long term, potentially most lucrative--business, the iPhone.

iPhone 2.0 software platform

The first major portion of the keynote focused on the iPhone 2.0 software platform and was largely just repetition from the March event, right down to the developer-oriented bits presented by the somewhat smarmy Jobs prot?g? Forstall. "This is a giant step forward from where we've been," Jobs noted before stepping offstage. Jobs said that over 250,000 people have downloaded beta versions of the iPhone SDK since it first shipped three months ago. Over 25,000 people applied to the beta iPhone 2.0 developer program, though only 4000 were admitted.

Jobs re-highlighted the enterprise-oriented features in iPhone 2.0, which will be made available for first generation iPhones and iPod touch devices (the former for free, the latter for about $10) in addition to iPhone 3G devices. These features include full Exchange compatibility, various enterprise-class security features, remote wipe, and the like. Jobs highlighted the participation of the Fortune 500 and various educational institutions in the iPhone 2.0 developer program.

Scot Forstall then provided a lengthy, repetitive, and mind-numblingly boring overview of the iPhone SDK. I won't bore you with this other than to note that the company dragged out a number of partners who created some compelling looking iPhone applications and games. Sega was on hand with a finished version of "Super Monkey Ball," and eBay showed off a free auction application. There were a number of medical apps, and ... well, I drifted off there for a bit.

The only big news during this segment came at the end: Apple was told by developers during the beta SDK process that it needed to solve a key problem that plagues other mobile platforms as well. "The requests many came from developers of apps such as instant messaging clients," Forstall said, "where by their very nature, they want to get a notification even when the user isn't actually running the application. We absolutely want to solve this problem." The wrong solution, he said, is to enable background processes. And while Forstall didn't explicitly mention Windows Mobile by name, he did show a Windows Mobile screenshot that highlights why this is such a bad idea, and to much deserved laughter. The Windows Mobile approach is bad for a number of reasons, including battery life and performance. Not to mention the fact that it requires users to manually manage running applications.

Not surprisingly, Apple has chosen a different approach. They will provide a scalable and unified Push Notification Service to all iPhone developers. It maintains persistent IP connections between third party servers and iPhones, and can push badges (alerts about the number of pending notifications), sounds, and SMS-like custom textual alerts to the devices. Unfortunately, this service won't be broadly available until September. Next month, certain developers will be able to beta test the service.

Jobs returned to the stage to discuss a few new iPhone 2.0 software features. These include:

Contacts search. The iPhone Contacts manager will get a Google-like search box, key for those of us with overflowing contacts lists.

"Full" iWork document support. Really, what you're getting is the ability to view but not edit documents created with Apple's Mac-based niche productivity suite. This won't be much of a benefit for the major of iPhone users, of course.

"Complete" support of Microsoft Office documents. In the original version of the iPhone software, users could view (but not edit) Word documents and Excel spreadsheets sent via email. Now you can view (but not edit) PowerPoint presentations as well. As before, you have to download them as email attachments; there's no way to sync documents to your iPhone via iTunes, which would make a lot more sense.

Bulk delete and move. Now, you will be able to multi-select email messages in Mail and delete or move them.

Save images. Now, when you've been sent a photo via email, you can save it to the iPhone's Photos library and, later, sync them back to your PC.

Scientific calculator. An update to the iPhone Calculator will allow you to use a scientific calculator when using the iPhone in landscape viewing mode.

Parental controls. Parents can manage the use of the iPod application, Safari (Web browsing), YouTube, iTunes Store, and application installation.

Language support. Apple is adding a wide range of languages to the iPhone for various international markets, including the Orient. You can switch between any of the supported languages on the fly. "It's one of the greatest advantages of not having a bunch of plastic keys for your keyboard," Jobs said, alluding to complaints about the iPhone's virtual keyboard.

While these new features may not be revolutionary, when you add them up with the numerous enterprise features and the capabilities exposed by the SDK--not the least of which is a library of free and paid-for third party applications--what you get is a massive and wonderful upgrade. Amazingly, it will be free for existing iPhone users. This is something that Apple could have easily charged customers for, in my opinion. (iPod touch users, as usual, will have to pay a nominal $10 fee to upgrade to 2.0.)

The iPhone 2.0 Software will ship in early July.

App Store and enterprise application deployment

Jobs also expanded on Apple's plans for its App Store, the iTunes-based store front that Apple and all third party iPhone developers will use to distribute their iPhone applications. An icon for the App Store will appear on the default home screen of every iPhone, Jobs said, so it can reach every single iPhone user. Those users will be able to wirelessly browse the store from the iPhone and, assuming the application is under 10 MB in size, can download them wirelessly to the phone. (Larger apps will require a Wi-Fi connection or the PC version of iTunes and a USB tether to the device.) The App Store also supports automatic updates, so anytime an app you've purchased is updated, you'll be notified.

From a developer standpoint, the App Store looks like a good deal. Developers can set the price of their apps and they can be free if desired. For paid apps, developers keep 70 percent of the asking price, while the remainder goes to Apple to support the maintenance of the store. And there are no credit card or hosting fees. Apple is using its FairPlay DRM scheme to "wrap apps so they're secure," according to Jobs.

Jobs also noted that the scope of the App Store has grown significantly since March, when Apple announced that it would be made available in 22 countries initially. Now, he said, it will be made available in 62 countries.

One of the big questions back in March was how enterprises would deploy their own custom applications. Obviously, these companies have no interest in making custom business apps available via the public App Store. Apple has responded to this need by providing a way for enterprises to distribute apps themselves. "Here's how it works," Jobs said. "An enterprise can authorize iPhones from within their enterprise and they can then create applications that only run on those phones. And they can distribute those applications on their own intranet, any way they want, using any security they would like. Their users download those apps onto their computer and sync them to the phone through iTunes."

While I have a hard time imagining enterprises rolling out iTunes to their users, this is apparently exactly what needs to happen. Kudos to Apple for meeting the needs of businesses at least half-way, but I'm guessing many are going to still complain about the iTunes requirement.

There's also a third, ad hoc form of iPhone application distribution. Jobs explained that this style of application distribution would be particularly interesting for educational institutions, which might need to mail iPhone applications to users. There are limits to ad hoc app distribution--each entity can sync with only 100 phones, for example--but it does appear to meet a need.

iPhone 3G

The biggest announcement was, of course, one of the worst kept secrets in the history of consumer electronics: Jobs announced, as expected, that Apple will soon ship the second generation iPhone, which goes by the unfortunate moniker iPhone 3G, a nod to its 3G wireless capabilities. (The current iPhone works only with lackluster and inferior "2.5G" EDGE networks.)

The iPhone 3G addresses virtually all of the complaints I and many others have made about the first generation device, erasing all of the many purchase blockers that prevented a mass audience from upgrading to the device. Indeed, iPhone sales have dropped through the floor: Though Apple has sold 6 million units cumulatively since mid-2007, quarterly sales have fallen dramatically: The company sold 4 million iPhones in 2007 (2 million a quarter on average) and 1.7 million in Q1 2008. But it sold just 300,000 iPhones in Q2 2008. Clearly something big had to change. And change it did.

From a form factor perspective, iPhone 3G appears to look almost identical to its predecessor. Looking at the front of the device, in fact, you'd never notice a difference: The buttons, screen, and various do-dads are all in the same locations and look the same. It's not actually thinner than the current version, but it is thinner "at the edges," as Jobs noted, similar to the tapered backs you see on other Apple products like the iMac and iPod touch.

What is different is the back of the device. While the original iPhone features a scratch-resistant metal backing that is quite an improvement over the scratch-o-rific backs on every single iPod ever made, the iPhone 3G goes downmarket with a plastic back panel. The side buttons, curiously, have gone upmarket: Instead of the plastic used on the first-gen device, these buttons are now solid metal. I guess you win some and you lose some.

The display and (sadly) the camera are unchanged. (Video was widely rumored for the camera, but it appears that's not the case. The iPhone camera is notably bad and offers no zoom or flash.) One bit of good news: Apple has finally fixed the iPhone headphone port. On the 3G, it's a standard flush-mounted port that should work with virtually all headphones. Jobs noted that the audio was "dramatically improved" without explaining why or how.

Unlike the original iPhone, the iPhone 3G will support superior 3G wireless networks as well as 2.5G networks. This benefit is somewhat mitigated by the poor availability of AT&T's 3G network in the US, but the company is racing to fill some of the more obvious holes. My guess is that many iPhone customers outside of the biggest markets (New York City, San Francisco) will still face 2.5G speeds most of the time, unfortunately, at least for the next year. I'll spare you the 2.5G-to-3G comparisons Jobs presented: Suffice to say that 3G is dramatically faster. Nice to see Apple finally acknowledge that. I will note, however, that there's nothing quite like watching Jobs dump all over the previous product without any sense of irony.

Also ironic is that Apple appears to have overcome one of the biggest fears about 3G, a fear that, incidentally, Steve Jobs raised last year when he explained why the original iPhone would utilize 2.5G instead: 3G wireless receivers, he said, sucked up battery life so fast that it just wasn't worth going that route. A year later, that's no longer the case, apparently: Apple claims the iPhone 3G will get "great battery life" with up to 5 hours of talk time and up to 5-6 hours of Web browsing on 3G. Huh.

One feature I'd still like to see on the iPhone is the ability to tether the device to your laptop and use the iPhone as a high-speed modem. You're already being charged an exorbitant monthly fee by AT&T to use their 3G network, and you should be able to use it with your laptop, as you can on competing networks and devices from Verizon and other carriers. Come on, guys. You can do this.

Predictably, Apple has built GPS into the iPhone 3G. Other phones have had this functionality for a while now, so I won't beat to death the fact that Apple is playing catch-up here. But the Google Maps application has been updated to utilize GPS to good effect; it's a nice feature.

While not technically an iPhone 3G feature, this device will be made available in many more countries than its predecessor, which is being distributed in just 6 countries at this time. Jobs says that the iPhone 3G will ship in 25 countries initially and up to 70 countries over its first "several months" on the market. Latin and South American countries will be particularly well represented, as will most of Europe, parts of the Middle East and Africa, India, Australia, and Japan.

The most important iPhone 3G change, however, is the price. Whereas the original iPhone debuted with two models costing $499 and $599, respectively (and, go figure, but the more expensive model was the best-seller), the iPhone 3G will debut with two models costing just $199 and $299, respectively. The lower-end version sports 8 GB of RAM, while the higher-end version has 16 GB. Both are otherwise identical, and the 16 GB model is available with either black or white plastic back panels.

Jobs didn't discuss this, but Apple was able to lower the price so dramatically by changing to a more traditional phone sales model, a much needed change that will allow AT&T and other carriers to subsidize the cost. But there's more to the cost of the iPhone than the initial selling price, of course. AT&T currently charges its customers a minimum of $70 a month once you factor in taxes and various charges, far more than the minimum plans for other smart phones. It's unclear how that's changing for the iPhone 3G, but I've heard the data plan is going up $10 a month for all iPhone customers (bad) while the company is allegedly going to offer a lower-cost phone plan (good) that could offset the cost for some customers. I'll have more on this by the time of my iPhone 3G review.

Final thoughts

Despite some fears about the monthly cost of owning an iPhone, the iPhone 3G appears to eliminate virtually every major complaint I've made about the original device. As a result, I'm almost unreservedly excited about the iPhone 3G and implore you to seriously consider making the switch. I'll have more information about the iPhone 3G in the SuperSite Blog and in an upcoming MobileMe preview before my final review hits next month. But don't wait on me: It's time to start evaluating Apple's innovative new smart phone. Finally, the iPhone really is the smart phone for the rest of us.