Later, he told reporters in the room that there were about 570 Wi-Fi base stations active in the room, which was making demonstrations of the new iPhone impossible. He asked bloggers and journalists (some of whom were live blogging the event) to turn off their devices so that they could continue the presentation.
During his keynote, Jobs also touted the success of Apple's iPad, which launched in April. He said the iPad has sold 2 million units in 10 countries so far and will be in 19 countries by the end of July.
He also said that Apple updated iBooks, its e-books application, which has already captured 22 percent of the e-Book market. Since its launch with the iPad, he said, it has sold 5 million books.
The updated iBook app lets users make and post notes on books, bookmark specific pages and read PDF documents as well.
Jobs also said that Apple's massive App store continues to grow. Each week, he said they receive about 15,000 apps in up to 30 different languages. Despite the volume, he said 95 percent of them are approved within seven days.
The 5 percent that don't make it are rejected for three main reasons, he said: they don't function as advertised, they use a private API (application programming interface) or they crash.
After announcing three new iPhone apps, for Netflix, Guitar Hero and the popular social game Farmville, Apple announced the App store recently reached a new milestone: last week, the App store passed 5 billion downloads. Then, calling it his "favorite stat," Jobs said that $1 billion had been paid to app developers so far.
Though fans may appreciate many of the iPhone's new additions, analysts say the biggest issue continues to be what Apple didn't mention today: another cellular carrier.
"Apple's greatest weakness is AT&T," said Rob Enderle, principal analyst at the Enderle Group. "If they want to hold off Google, they've got to find a way to fix AT&T."
He said the problem is that Apple sets unusual requirements for cell carriers and will only work with companies that accept their terms. The vast majority of companies won't accept the agreement, so, Enderle said, "we're at a stalemate."
But as long as Apple sticks with AT&T alone, he said Android phones will continue to close in on him.
Enderle also said that Jobs' "one more thing" was "pretty weak."
"Having a phone service that only works where you're not using the phone service is pretty convoluted for Apple," he said.
The "FaceTime" video chatting service that Jobs announced today only works if both callers are using iPhone 4s and if both callers can connect to a Wi-Fi network.
"That means it's not going to work very often," Enderle said.
Ross Rubin, executive director of industry analysis for consumer technology at NPD Group, said another feature missing from the new iPhone, but included in competitive Android phones, is mobile hotspot functionality.
A few new phones, such as the Sprint Evo 4G, let people use the handset to connect multiple devices to the Internet using Wi-Fi. The iPhone only lets users connect one device to the Internet through the phone, he said.
Still, he added, other features, such as extended battery life, multi-tasking and e-mail improvements are welcome additions.
"Even though customers are not excited about ads per se, the iAd platform should help continue to ensure a strong library of free or low cost applications," Rubin said.
Enderle said that despite the new iPhone's weaknesses, the new form factor is a sure winner.
After the original iPhone, he said the newer models got "thick and pregnant."
"This one goes back the early roots," he said. "This is arguably the best-looking iPhone since the first one."