iPhone 3G: Something Old, Something New

Those who thought Apple would introduce a new, less expensive iPhone at its Worldwide Developer Conference this week were partially right.

In this photo, Phil Schiller, Apple's senior vice president of worldwide marketing, makes his...

In this photo, Phil Schiller, Apple's senior vice president of worldwide marketing, makes his keynote address at the Apple World Wide Developers conference June 8, 2009 in San Francisco, Calif. In this presentation, Apple announced that it would soon release a $99 iPhone.

(Getty Images/ABC News Photo Illustration)

There will soon be a cheaper iPhone that costs only $99. While the phone itself is the same entry-level model that ignited sales last summer, though, it will have new software.

Among the software's improvements are support for cut, copy and paste; voice recording; and sending photos from phone to phone using a system called Multimedia Messaging Service.

The new software even adds a feature that lets you transmit stereo music wirelessly using Bluetooth.

The iPhone still can't run more than one program at a time, but Apple will enable a notification system that can tell you, for example, if someone has sent you an instant message.

Apple is not the first company to launch a $99 smartphone. Just last year, Palm had success selling the Centro for that price. But the Centro had old software that was on the verge of being phased out.

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iPhone 3G Supports Thousands of Apps

The iPhone 3G, on the other hand, holds its own against just about any other device in the marketplace, and its new software supports thousands of applications, including one of the best Web browsers and some of the best-looking videogames on a mobile phone.

And so, barring any radical responses by competitors, the $99 price point will clearly further boost Apple's fortunes in the smartphone race.

According to NPD's Mobile Phone Track, the iPhone 3G was the best-selling handset in the United States during the third and fourth quarters of 2008, but was knocked from its perch in the first quarter of 2009.

This happened because Verizon Wireless ran a promotion in which customers who bought a BlackBerry got another BlackBerry for free.

The deal pushed the BlackBerry Curve, offered by all four major U.S. wireless companies, over the top. The Curve was also less expensive than the iPhone and its main competitors,the T-Mobile G1 and BlackBerry Storm.

Indeed, the $99 iPhone 3G will also compete with a new, more expensive iPhone from Apple itself, the iPhone 3G S (for speed), starting at the old price of $199.