Apple adds faster, cheaper iPhones

The new iPhone 3G S opens applications and Web pages up to twice as fast as the current version, Apple said yesterday at its developers' conference in San Francisco. Senior vice president Phil Schiller acted as master of ceremonies, stepping in for chief executive Steve Jobs.

Jobs didn't make an appearance on stage, disappointing some investors. The executive, on medical leave since January, is scheduled to return to day-to-day management at the end of June.

Apple fell 82 cents to $143.85 in Nasdaq stock market trading. The shares have climbed 69 percent this year.

Apple, based in Cupertino, Calif., demonstrated a new iPhone operating system, adding more ammunition against RIM's BlackBerry and the Pre. Palm introduced the Pre on June 6. Sprint Nextel Corp., the exclusive wireless carrier for the device, sold out at many of its stores.

A 16-gigabyte version of the new iPhone will cost $199, while the 32-gigabyte model costs $299. The device adds a compass and a 3-megapixel camera that can record video. It also provides controls for voice dialing.

The current 8-gigabyte model will now cost $99 - half its old price.

"It's impressive," said Apple investor Ryan Jacob, head of the Jacob Internet Fund in Los Angeles. "The idea of having an 8-gigabyte iPhone at $99 is a very attractive price point."

The current 16-gigabyte model will now cost $149, down from $299, AT&T said. The iPhone 3G S will be available June 19.

Jobs, 54, took his medical leave after announcing that a hormone imbalance was "robbing" him of the proteins he needed to stay healthy, causing him to lose weight throughout 2008. He handed day-to-day duties to operating chief Tim Cook. Jobs had handled the keynote speech at the developers' conference every year since 1998.

Apple said it has sold more than 40 million iPhones and iPod Touch media players.

The company also introduced new MacBook Pro laptops at the event, offering faster chips, lower prices, and longer battery life.

A 15-inch MacBook Pro will start at $1,699, while a 17-inch model will cost $2,499. The machines have batteries that last up to seven hours. Apple also introduced a 13-inch MacBook Pro that starts at $1,199. Apple cut the price of its ultra-thin MacBook Air to $1,499.

The company also is challenging Microsoft Corp.'s new Windows 7 with Snow Leopard, an updated Mac operating system. The software will debut in September, a month before Windows 7 comes out. It will cost $29 to upgrade to the system.

"Apple is going for the jugular with Snow Leopard," said Hakim Kriout, a portfolio manager at New York-based Grigsby & Associates, which owns Apple shares.