Apple unveils iPhone 3GS

SAN FRANCISCO -- Apple today unveiled a faster iPhone and dropped the price of the existing model to $99.

The new iPhone 3GS (for "speed") comes with a 3-megapixel, auto-focus camera that also captures video. It also has voice control for dialing and iPod playback.

The price through U.S. partner AT&T: $199 for 16 GB and $299 for 32 GB. It's available in black and white, like earlier models.

The price of the current 8GB model drops to $99. The new 3GS will be out in the U.S. on June 19.

New operating system software will be available worldwide June 17, free for iPhone users, and $9.95 for iPod Touch users.

Highlights include cut-and-paste controls and MMS visual text messages — so you can add pictures and audio clips to text messages .

Another feature, tethering, allows an iPhone to share its Internet connection with a PC. The two devices are linked either by USB cable or wirelessly, using Bluetooth Technology.

But tethering is not yet supported by AT&T, the only official carrier for the iPhone in the U.S. "AT&T is behind the ball," says tech analyst Tim Bajarin with researcher Creative Strategies. "Pressure is on them. I expect tethering...before the fall."

A new feature called "Find My iPhone" displays a visual map, showing the location of your iPhone (if it's on). It is only available if you subscribe to Apple's Mobile Me service, which costs $99 yearly. It also lets you erase your phone, "so you know your private data remains private," Scott Forstall, Apple's senior vice president of iPhone applications, said at a presentation kicking off the company's annual conference for software developers.

A similar offering came from Zipcar, a company which offers short-term car rentals in metro areas. Can't find your car after it's been parked? Use the iPhone to locate your lost car—by clicking a button and honking the car via the iPhone to locate. The door can also be unlocked, via the iPhone.

Apple offered the stage to several developers, who demonstrated a range of new Apps: