by Yukari Iwatani Kane/Ian Sherr
Steve Jobs unveiled a new iPhone Monday in a presentation that was long on new features but short on surprise, as the Apple Inc. chief faces increasing competition in smartphones, particularly from devices based on Google Inc.'s Android software.
While Mr. Jobs described the iPhone 4 as "then biggest leap since the original iPhone," he offered few bombshells after Gawker Media LLC's technology blog Gizmodo shared details about the device in April after getting hold of a prototype.
Mr. Jobs made a reference to the episode, telling the audience at Apple's annual conference for software developers, "Stop me if you have already seen this" when he first showed the device.
Among other thins, Mr. Jobs lauded the iPhone 4's new display technology and a new stainless steel frame that doubles as an antenna. The phone has two cameras, including a front-facing one that allows video chats.
Analysts said the new iPhone would continue Apple's growth, but was unlikely to markedly rev up the company's share of the global smartphone market, which now stands at 15.8% -- No.3 behind Nokia Corp. and Research In Motion Inc. according to research firm IDC.
Charles Golvin, an analyst with Forrester Research, said he expected the phone to be popular with existing Apple customers, but said it was unclear how many new subscribers it would bring to wireless carriers.
Mr. Golvin said demand for iPhones maybe helped more by new data plans from Apple's U.S. cellular partner, AT&T Inc., which cap usage but lower the entry-level monthly service rate.
Whetting consumers' appetites for the new iPhone is crucial for Apple.
Since launching the first iPhone three years ago, the touchscreen device has become Apple's largest business, accounting for 40% of its total revenue in its most recent quarter ended Mar. 27.
Analysts expect Apple to sell about 36 million iPhones in its fiscal year ending Sept. 30, up about 73% from 20.8 million in the previous fiscal year.
But analysts said the iPhone 4 will face more competition, especially with the introduction of more phones that run on Google's Android operating system, including Verizon Wireless 's Droid Incredible and Sprint Nextel Corp.'s HTC EVO 4G.
"It's entering into a different market than the one that the 3GS [Apple's previous iPhone] did last year," said Chris Jones, an analyst for research firm Canalys. "There will be a lot of diehard fans who will go out and get this device, but I think the rest of the install base will take their time to assess where they are with their [cellular] contracts."
Then iPhone 4, which will be available June 24 in the U.S., France, Germany and Japan, is 24% thinner than its predecessor. It also has a bigger battery that allows for seven hours of talk time, Mr. Jobs also announced FaceTime, the company's new videoconferencing technology for the iPhone. Mr. Jobs said it will initially work only over Wi-Fi networks rather a cellular connection.
The CEO said also Apple is adding Microsoft Corp.'s Bing search engine to the iPhone, although Google will remain the default option.
In the U.S., the phone will start at $199 -- the same as the entry-level price of previous models -- with a two-year contract with AT&T. An iPhone 4 model with extra storage space will cost $299. Apple cut its price on then current iPhone 3GS model to $99.
Monday's event was marred by technical glitches during Mr. Jobs's presentation. The CEO had difficulty getting Web pages to load on his iPhone 4, causing the crowd to go silent at one point.
"I'm afraid I'm not going to be able to show you much."
Mr. Jobs said with a sigh, as he tried to get his demonstration working. Mr. Jobs later asked the audience to disconnect their gadgets and laptops to give him the wireless-network bandwidth to use his device on stage.
Prior to the Wi-Fi glitch, Mr. Jobs also said Apple's App Store, which sells downloadable programs that run on the iPhone and which has kept consumers coming back for new games and other features, now features 225,000 apps. He said developers had taken in more than $1 billion selling Apple apps since the store launched in 2008.
Mr. Jobs also said Apple's mobileadvertising service iAds will launch on July 1. He said Apple already has over $60 million in iAd commitments in 2010 from marketers including Nissan Co., Citigroup Inc. and Unilever PLC.