The newest version of Apple Inc.'s hugely popular iPhone features a built-in videoconferencing feature - the most eye-catching of several major upgrades unveiled today, as Apple tries to stay a step ahead of rival smartphones powered by Google Inc.'s Android operating system.
Speaking at the company's annual conference for software developers in San Francisco, Apple chief executive Jobs called the new iPhone 4 "the biggest leap since the original iPhone." Set to go on sale in the US on June 24, the new iPhone will include a camera on the front of the device as well as on the back, allowing the user to capture and send self-portraits in stills or video. The phone will also include FaceTime, a free videoconference program that will work over home or office WiFi wireless networks, and eventually, over cellular data networks.
Jobs said that Apple is still working with cellular carrier AT&T Inc., the exclusive US provider of the iPhone, to allow videoconferencing over the carrier's phone network, but ABI Research senior analyst Michael Morgan doubts that AT&T's data network has the capacity to handle millions of FaceTime users. "Right now, with a 3G network, it's not going to be a very good signal," Morgan said. Cellular videoconferencing won't catch on until carriers launch faster data networks. AT&T plans to offer the next generation of network service, called 4G, in 2011.
The iPhone 4 will also feature an upgraded screen with sharper resolution; a new processor chip similar to the one in Apple's popular iPad tablet computer; and a built-in gyroscope that measures rotary motion, allowing for more sophisticated video games.
Jobs also previewed the iPhone's upgraded operating system software, called iOS 4. Users will be able to run several software applications at the same time, a feature long available on other smartphones. Buyers will also be able to purchase a new version of Apple's iMovie video editing software for $4.99 program, allowing users to shoot, edit, and send video right in the device.
Another new Apple offering, iAds, will make it easier for application developers to embed advertising in their software. Ken Dulaney, an analyst with Gartner Inc. in San Jose, Calif., said that including ads with many iPhone apps will pay off big for Apple. "They're going to make a lot of money off of those," Dulaney said.
A host of major corporations have signed up for the iAds network, including AT&T, Best Buy Co., and Boston insurer Liberty Mutual Group.
"Apple and their products are a good match for our core consumers," said Paul Alexander, Liberty Mutual's senior vice president of communications. "We think this will be one additional way to reach them."
Apple has sold more than 50 million iPhones, but the company faces stiff competition. In May, Gartner reported that 5.2 million Android phones were sold in the first quarter of 2010, compared to 8.3 million iPhones.
Some Android phones offer features that equal or exceed the new iPhone 4. The new EVO 4G phone released last week by Sprint Nextel Corp. can act as a wireless hot spot, connecting up to eight other devices. It also operates on Sprint's 4G network, already being rolled out in dozens of cities, and accepts removable flash memory, allowing users to shoot unlimited high definition video. Like its predecessors, the latest iPhone doesn't accept external memory cards.
But Dulaney said that as a fully integrated communication and entertainment system, the iPhone and its software is still far ahead of the pack. "Nobody but Apple puts together hardware software, services, and advertising the way they do," he said.
AT&T is making upgrades easy, allowing iPhone users whose contracts expire this year, and who sign a new two-year contract, to buy a new iPhone at the discounted price.
Many iPhone users may sell their existing phones to cover the cost of a new one. Gazelle.com, a website in Allston that buys used digital gadgets, said it had received more than 600 iPhone trade-ins in just a few hours after today's announcement. Anthony Scarsella, Gazelle.com's chief gadget officer, said prices for used iPhones were bound to fall as more consumers began trading them in. "Over the next 45 days, we should see about 5,000 iPhone trades," Scarsella said.
Photo at top of post is a Reuters Photo
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