It's presto, change-o as new iPhone is unveiled

Wouldn't it be cool if you could use your cellphone to monitor activities in your home, say, to zoom in for an audio/video check of the baby's room while you were at work, or even adjust the heat?

Or how about going to a theme park and checking your phone to discover if other friends are there, and arrange a meeting place?

Such concepts are not pie in the sky, but actual programs that have been developed for Apple's iPhone, the combination iPod/phone and Internet device first introduced to acclaim a year ago.

Consumers and reviewers alike gushed about its compact, futuristic design and sensitive touch-screen. But even its biggest fans have had one persistent chief complaint: The iPhone's Internet network from partner AT&T was too slow.

So get ready for iPhone 2.0: On Monday Apple aapl is widely expected to introduce a zippier version that will operate on both a faster AT&T network, and speedier networks internationally. The price also will rock: $199, according to people with knowledge of the matter, down from the current $399 and $499. Sources declined to be cited by name or affiliation because Apple and AT&T haven't authorized anybody to speak publicly about pricing until after Monday's announcement. The $199 price is being subsidized, though USA TODAY could not confirm details.

According to sources, the new Apple device will be available in Apple and AT&T stores beginning this summer.

For consumers, the shift to 3G will be akin to going "from dial-up to broadband," says Gene Munster, an analyst at Piper Jaffray.

A new iPhone could go a long way toward fulfilling Apple CEO Steve Jobs' prediction that he'd sell 10 million iPhones in its first 18 months. So far, Apple has sold just over 5 million phones. Analysts who follow the company think a lower price and new international markets make it a sure bet that another 5 million will be snapped up this year.

Apple stopped taking orders for the iPhone in May, presumably to make way for the new model. Sales could substantially beef up Apple's bottom line, Munster says. Apple reported revenue of $24.0 billion in 2007. Munster sees sales growing to $34 billion this year, and $46.9 billion in 2009, thanks to the iPhone.

Beyond the new hardware, the biggest buzz around the iPhone this week will be the new uses being dreamed up for it. The software add-ons have the potential to turn the iPhone into the pocket computer of the future, as essential, Apple hopes, as the keys in your pocket or purse.

The iPhone economy

Apple's sold-out Worldwide Developer's Conference in San Francisco is the setting for Monday's iPhone lovefest, where software developers will convene to hear about the new iPhone. They're eager to hear CEO Jobs talk about how they can participate in what independent analyst Richard Doherty calls the "iPhone economy."

Earlier this year, instead of controlling everything that went on the iPhone, Apple released what's called an SDK — for "software developer's kit" — a road map that allows programmers to create applications for the iPhone. The first of those outside programs is expected to be released Monday, and made available on the iPhone and iPod Touch — the iPod that's just like the iPhone, except without a phone.

"Opening the pot of gold to developers is as important as the iPhone itself," Doherty says.

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