Calling it the biggest leap yet from Apple's original iPhone, Apple CEO Steve Jobs today unveiled the company's newest model -- the iPhone 4.
Jobs made the announcement at Apple's Worldwide Developers Conference, its annual meeting for the thousands of developers who make Apple applications.
In unveiling the phone, Jobs even made a subtle nod to the famously leaked iPhone prototype, which was splashed across the Internet last month after an Apple engineer left it at a California bar.
"How many of you have already seen this?" he asked.
The iPhone 4 has 100 new features, including a new design, which makes the phone 24 percent thinner than previous models, Jobs said.
It also comes with a front-facing camera, a camera in the back with flash, and a second microphone for noise cancellation.
In an announcement sure to please iPhone users tired of the phone's limited battery power, Jobs said the new iPhone is powered by an A4 chip that gives one 40 percent more talk time.
On Sale June 24, for $199 or $299
Jobs said the iPhone 4, which comes in black and white, goes on sale June 24 in the U.S. The 16GB version will cost $199 and the 32GB version will cost $299.
Though many Apple fans hoped Jobs would announce a new cellular carrier for the new iPhone, Jobs only said that AT&T, the current exclusive carrier, would offer customers a chance at an early upgrade.
For iPhone owners with contracts that expire anytime in 2010, AT&T is making them immediately eligible for a new iPhone 4 at the same prices if they renew their contracts for two more years.
In the traditional "one more thing" part of his presentation, Jobs said the new phone enabled video chatting.
A feature widely requested by Apple fans, "FaceTime" lets iPhone 4 owners use the front and back cameras to communicate with each other wherever they can connect to a Wi-Fi network. He said video calls over cellular networks wouldn't be possible in 2010.
To improve gaming, Jobs also said that Apple added a three-axis gyroscope to the new iPhone.
An accelerometer, which already existed in previous iPhone models, let users tip and turn the phone to control movement on the screen. The gyroscope adds a 360 degree spin.
The new phone also comes equipped with a 5 megapixel camera that can capture HD video and iMovie for the iPhone, an in-phone video editing program.
Jobs also announced that in addition to updating the iPhone operating system, iPhoneOS, it had re-named the system iOS4.
Although Google would remain the default search engine on the iPhone, Jobs said Apple added Bing and Yahoo.
For Apple fans who own an iPad and an iPhone or iPod Touch, Jobs said the iBook application will be available on all devices. When you buy a book, the application will automatically and wirelessly download the book to all devices. As you take notes or add bookmarks, the application will continue to sync your additions across all devices.
But all the bells and whistles weren't enough to ensure a glitch-free introduction. In a rare awkward moment for the usually-very-together Apple CEO, Jobs appeared to have some difficulty connecting to the Wi-Fi network in front of the large crowd.
"We're having a little problem here," he said when he couldn't load a Web page for a demonstration.
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."