New iPhone could be unveiled as early as Monday

Is there a new iPhone in your future?

Apple on Monday opens its annual Worldwide Developer's Conference in San Francisco, where tech analysts expect the company to tout its new iPhone 3.0 software, and a new iPhone. It will also preview the next version of its operating system for Mac computers, OS X Snow Leopard.

Apple is facing renewed competition from rival Palm, which starts selling its brand new — and well-received — Palm Pre smartphone over the weekend with exclusive partner Sprint.

"They had to come out with a new iPhone now, to one-up the Pre," says Gene Munster, an analyst with Piper Jaffray. Munster expects mid-July availability for any new iPhone.

He also expects tiered pricing, with an entry level model available for $149 (down from the current $199) and a premium phone with a video camera and higher capacity storage for $299.

Apple, typically mum, declined comment.

The software upgrade is even more important than a new iPhone handset, says Charles Wolf, an analyst with Needham and Co.

The center of gravity in the smart phone market has shifted from hardware to software, Wolf says. "And there Apple has an enormous lead."

The latest iPhone software, to be introduced this summer as a free upgrade (or $9.95 for folks who own Apple's iPod Touch media player) offers such enhancements as the ability to cut and paste web pages, and send MMS text messages with photos.

Apple uses its developer's conference to show off its wares and encourage software designers to make programs for its products. Those efforts have paid off greatly when it comes to the iPhone and Touch, which combined have sold 37 million units.

The company has sold more than 1 billion applications for the iPhone and Touch, from games and productivity tools to elegant entertainment apps like the Ocarina, which lets you play the phone as a flute. There are 40,000 offerings at Apple's App Store.

Beyond product announcements on Monday, tech analysts and bloggers are abuzz over whether Apple CEO Steve Jobs might make an appearance at the event.

Jobs took a health-related leave of absence earlier this year and is supposed to to return work at the end of the month.

Munster, for one, is not counting on an early showing. "There's a 20% chance he comes out," says Munster. "And 95% chance he's back at the end of the month, like Apple says."

Apple spokesman Steve Dowling says "we look forward to Steve's return at the end of June."

At the conference, which is sold out, some 5,000 developers will get a final preview release of Snow Leopard, Apple says. The company, however, hasn't given a release date for the software.

Rival Microsoft is introducing a new version of its Windows computer operating system — Windows 7 — in October.

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