Apple Unveils Faster iPhone, Drastic Price Cuts

In the end, Steve Jobs didn't show.

Expectations had been high that the ailing Apple CEO would make a surprise reappearance at his company's World Wide Developers Conference, which kicked off Monday with an address by Senior Vice President of Marketing Phil Schiller in San Francisco.

Schiller introduced a third-generation iPhone, which has faster, more capable software and more memory, as well as surprisingly deep price cuts for Apple hardware and software.

But it was Jobs, who hasn't been seen in public since making a shockingly gaunt appearance last September, who was eagerly awaited by the tech world and who failed to materialize.

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Schiller confirmed the rumors that the new iPhone 3GS — S for "speed" — would have faster mobile Web connectivity and video-capture software.

He also showed off voice commands for native Apple apps, including photo, iTunes and e-mail, and noted that the iPhone would "speak" song titles out loud.

The iPhone's price points, as expected, stayed the same at $199 and $299 with a 2-year AT&T contract— but the memory of each model doubled, to 16 GB and 32 GB respectively. Both would be available June 19.

There were two surprises: Schiller said the existing low-end iPhone 3G, with 8 GB of memory, would stay on the market for $99, and that Apple's next Mac OS X operating system, Snow Leopard, would cost all of $29.

Apple's iPhone czar Scott Forstall announced that existing iPhone and iPod Touches would be getting a serious software upgrade, dubbed "3.0." It would include the abilities to send files via instant-messaging (MMS) and to cut and paste between applications, as well as a horizontal virtual keyboard.

Other features included the ability to download movies wirelessly from the Apple Store, instead of having to sync to a computer.

The audience wasn't happy to hear, though, that AT&T wouldn't be permitting MMS until the end of the summer, and that unlike the iPhone's carriers in other countries, it wouldn't let Macs and PCs use the iPhone as a wireless broadband modem.

Forstall introduced a helpful feature called "Find My iPhone" which did just that, showing users of lost iPhones where they were — and including the ability to remotely erase all data.

New third-party applications for the iPhone included games from Gameloft, a patient-monitoring application for hospital physicians and a digital-book and -magazine store called Iceberg.

Others were GPS navigation from industry leader TomTom, a guitar-amp controller, a science-experiment data-processor for schoolkids and an app that showed where the nearest Zipcar rental-car locations were — and would even unlock individual Zipcars.

Forstall said the 3.0 upgrade would be available June 17 and would be free for iPhone users, $9.95 for iPod Touch customers.

The Wall Street Journal reported Friday that Jobs had beaten a digestive disorder, which some reports said made him unable to digest protein, and would be returning to day-to-day operations at Apple's Cupertino, Calif., headquarters at the end of the month.

Jobs survived a rare form of pancreatic cancer in 2004, and his current medical problems are thought to be related to his cancer surgery.

"He was one real sick guy," an unnamed source told the Journal. "Fundamentally he was starving to death over a nine-month period. He couldn't digest protein. [But] he took corrective action."

Bloomberg News reported Monday that Jobs was "actively involved" in preparations for the WWDC, according to an unnamed source.

"We look forward to Steve returning to Apple at the end of June," was all the famously tight-lipped company would say.

Schiller began his initial address with news about Apple's MacBook line, boosting the speed, memory and data storage of the 15-inch MacBook Pro and upgrading the 13-inch MacBook into the "Pro" category.

He also announced a large price cut on the solid-state-drive version of the MacBook Air, which was dropping from $2,500 to $1,800, and showcased Apple's upcoming Mac OS X 10.6 Snow Leopard operating system and version 4 of the Safari Web browser.

Less glamorous but probably as important to Apple's bottom line was the news that Snow Leopard would have support for Microsoft Exchange-based e-mail servers, which could greatly expand Apple's share of corporate customers.

Unlike previous upgrades, which have cost $129 each, Apple will be pricing Snow Leopard at $29 for individuals, and $49 for a five-machine "family pack." Snow Leopard will be available in September, one month ahead of Microsoft's Windows 7.

The other thing that didn't show up Monday was a smaller, cheaper new iPhone model, which rumors said would run on Verizon Wireless' network.

First-place Verizon doesn't have a marquee smartphone along the lines of second-place AT&T Wireless' iPhone, third-place Sprint's Palm Pre or fourth-place T-Mobile's G1.

The Pre debuted on Saturday to strong sales and strong reviews, though few would venture to say it was the long-awaited "iPhone killer." Sprint and Best Buy stores ran out of units quickly amid reports of manufacturing shortfalls.

AT&T is two years into a five-year exclusive deal to offer the iPhone in the U.S. But it's possible Apple could give a future mini-iPhone a different name to dodge the AT&T contract.