I-phone Slashed For $199

In his keynote address to open Apple’s Worldwide Developer’s Conference (WWDC) on Monday, Steve Jobs officially announced the iPhone 3G. Perhaps the most important revelation was the price, which at $199 for the entry level (8GB) model is half the original’s current $399 pricetag. He indicated that the price was based on research where consumers who have so far passed on the iPhone said cost was the biggest barrier. Not surprisingly he didn’t talk about his previous prediction of 10 million iPhones sold by the end of 2008. Why is that significant? Maybe because at the current (pre-iphone 3G) prices it appears unlikely to happen.

In fact despite “selling out some number of weeks ago,” Jobs said only 6 million have been sold in the approximately 11 months since the initial launch on June 29 of last year. Jobs showed off the speed difference between the iPhone 3G’s “amazingly zippy” performance on newer 3G Networks ,compared with the EDGE connection available to owner’s of the original. The same web page that took nearly a minute to load using an EDGE connection took just over 20 seconds across 3G. He also compared it to a Nokia N95 and Treo 750, which reportedly took 33 and 34 seconds respectively to load the same page (using 3G) while delivering it in a less complete mobile format. He also pointed out that 3G speed is “actually approaching Wi-Fi.”

Other changes include the use of plastic instead of aluminum for the back (presumably to bring production costs down), as well as the addition of a 2 Megapixel camera and GPS. Near the end of his presentation a map showed 70 countries where the 3G iPhone will officially be available while ‘It’s a Small World’ played in the background. By contrast, the original iPhone is only offered in 6 countries. The iPhone 3G’s initial launch, on July 11, will actually only include 22 countries, with the other 48 planned by year’s end.