Apple Cuts Price, Adds 3G Capability To iPhone

$199 Unit Goes On Sale Next Month

Apple has taken another big step to making its video-friendly iPhone a true mass-market product by lowering its base-model price to $199, a 50% drop from the current $399 price for a unit with 8 gigabytes (GB) of storage. The new iPhone 3G will also support high-speed 3G networking technology that will make broadband access twice as fast compared to first-generation iPhones that run on AT&T's slower Edge data network.

 The new phone, which was formally introduced by Apple CEO Steve Jobs at Apple’s annual developers’ conference in San Francisco, will go on sale on July 11 in 22 countries including Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Mexico, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, UK and the US. It will be available in over 70 countries by year-end.

 The 8GB iPhone 3G is one-third the price of the first iPhone introduced in June 2007, as Apple has shifted its marketing focus from tech-savvy early adopters to more price-conscious everyday consumers. A model with 16GB of storage will cost $299 (both prices require signing a new two-year contract with AT&T for wireless service). The new iPhone will support Microsoft Exchange ActiveSync mobile email software, to make it more friendly to business users, and will also run hundreds of third-party applications which have been built to date with Apple’s software development kit (SDK) for the iPhone.

  “Just one year after launching the iPhone, we’re launching the new iPhone 3G that is twice as fast at half the price,” said Steve Jobs, Apple’s CEO, in a statement. “iPhone 3G supports Microsoft Exchange ActiveSync right out of the box, runs the incredible third party apps created with the iPhone SDK, and will be available in more than 70 countries around the world this year.”