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What You Need to Know About the iPhone 3G and iPhone 2.0 Update

With all the iPhone news coming out of Apple, it can be confusing to find simple answers. That’s why Ryan Faas has you covered with this list of need-to-know information about the iPhone 3G and iPhone 2.0 software update features and availability.
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In the days and weeks leading up to Apple’s Worldwide Developers Conference, reports and rumors were swarming across the Internet like ants at an abandoned but fully laden picnic table. When the dust settled after the keynote, the world knew that a next generation iPhone sporting 3G in its name was coming to the U.S. and 21 other countries on July 11th (with plans to bring the total number of countries hosting iPhones to as many as 70 by year’s end). We also knew that Apple would ship a major software/firmware update for first generation iPhones known as iPhone 2.0 that would enable all the same software-based functionality included in the new model.

But those are just the headlines. In this article, I offer a guide to the key features that you need to know about if you’re a current iPhone owner (whether or not you’re planning to upgrade to an iPhone 3G next month) or if you’re considering a new iPhone for the first time.

iPhone 2.0

While the biggest news has been the release of the iPhone 3G, the biggest component of Apple’s WWDC keynote was the iPhone 2.0 update, which will be included in the iPhone 3G but will also be available as a free software update for existing iPhone customers (or as a $9.99 paid update for iPod Touch owners). Many of the exciting new features now listed on Apple’s website are actually a result of the iPhone 2.0 software and will be widely available to existing customers. Although Apple announced an early Jule ship date, recent reports indicate iPhone 2.0 may ship as early as June 27th.

App Store

One of the biggest new iPhone features enabled by the iPhone 2.0 update is the ability for developers to create third-party iPhone applications. These applications will be available to consumers through the App Store, an iPhone application (and iTunes component) that allows the browsing, purchase, and installation of applications. Apple will vet applications (and developers) available through the App Store and will host/manage the store itself (for a 30% cut of the earning of applications sold). Developers will be allowed to set prices (including free). A recent analyst poll suggests that as many as 71% of applications may be free and the average application price could be as low as $2.29.

Currently there are several announced developers and applications that will be available when the App Store is launched with the release of iPhone 2.0. Apple has said as many as 25,000 developers have applied since the company unveiled the beta iPhone SDK (software development kit) earlier this year, and at this point it has approved about 4,000 for inclusion in the App Store. iPhone applications will have access to many iPhone features including location-based information, stored contacts, Internet access, and the motion and accelerometer sensors built into the phone. This has already resulted in a range of games, business tools, and social networking applications that is likely to expand exponentially by the end of the year.

Push Notifications

In addition to expanding push email notification options (such as those available on RIM’s BlackBerry), which were available in the first iterations of the iPhone for users of Yahoo Mail, Apple is expanding push notifications to iPhone applications. Although this will not be available until this fall, it will allow developers to write applications that rely on a single persistent data connection to an Apple server. This will allow Internet services to deliver notifications to non-running applications without allowing multiple applications to be open simultaneously. The biggest use of this technology would be to create instant messengers and other applications that can inform users of new messages or other updates even if the user is not currently accessing them in a manner similar to the way the iPhone’s text messaging application functions.

Applications for Businesses

While the App Store will be the mechanism consumers use to find and install applications, business and school environments will be able to develop their own in-house applications that can be deployed through iTunes (the applications can be delivered to a computer running iTunes via web or email). Enterprises can register iPhones purchased by a company to certify that only those iPhones can run the application. Smaller organizations that develop applications (including businesses and schools) can use an ad-hoc method in which they are certified by Apple to register up to 100 iPhones on which their application can be run.

Exchange Support

To support push email (as well as push syncing of contact and calendar information), Apple will ship Exchange ActiveSync technology as part of iPhone 2.0, allowing businesses to configure an iPhone to access an Exchange server wirelessly for immediate updates of new emails, appointments, and contacts (similar to the options available for Windows Mobile phone). Use of the feature will require minimal changes to the Exchange environment similar to those needed to support other mobile devices (Apple has made a checklist of requirements available.

Management for Enterprises

iPhone 2.0 will enable support for centralized configuration of iPhone using specialized configuration files that can be created with a Mac OS X application or web-based tool (for Windows-only environments). These files will allow restriction of certain features and applications (including the ability to install additional applications) as well as automatic configuration of iPhone settings for users. The files can be installed through a secure intranet site or via email.

Remote Wipe

When used in an Exchange environment, the iPhone will support remote wipe commands via Outlook Web Access or the Exchange Management Console. This will allow administrators in an enterprise environment to easily erase the data stored on an iPhone if it is lost or stolen.

Cisco VPN and WPA Enterprise/802.1X Support

The iPhone 2.0 update will offer complete support for Cisco VPN technologies in addition to the existing VPN support. This will allow iPhones to securely access network resources using insecure Internet connections much as any Mac or PC can do. This can facilitate both access to intranet resources, secure access to data on in-house applications, and further secure access to mail servers from remote locations. Again a checklist is available with details. In addition to VPN for secure remote connections, the iPhone 2.0 update will add support for enterprise level security using 802.1X in business Wi-Fi environments. A checklist with details is available for this as well.


MobileMe is the next generation of Apple’s suite of online tools (currently known as .Mac and originally launched as iTools in 2000). Described as Exchange for the rest of us, the $99 service (which can be purchased for a limited time with two $30 rebate options) will allow users to have access to push email as well as push sync of contacts and calendar items with one or more computers (Mac or PC). It will also enable push sync between multiple computers, a web based interface, and access to additional services such as online galleries, personal web site hosting and file storage known as Apple’s iDisk. A guided tour is available on the website.

New Mail Features

Several new features are being added to the iPhone’s Mail application in iPhone 2.0. In addition to support for Exchange and push mail via MobileMe, mail will now offer the ability to select multiple messages at one time for deleting or moving to different folders.

Contacts Search

When accessing contacts on the iPhone (to send emails or text messages, to place calls, or to update contact information), a search box will be available. The box will enable live searching to display all matching contacts as a user begins typing the name of a particular contact.

Location-based Services

As noted earlier, developers will be able to take advantage of the iPhone’s location detection services (known as Core Location). This will allow a number of potential functions, including locating nearby contacts or businesses, getting directions or other navigation services, and possibly many more (the iPhone’s Camera application, for example will offer the ability to automatically geotag photos with location data). Presumably this will be available to both new iPhones (which include full GPS capabilities) as well as existing models that can triangulate location based on cell towers and known Wi-Fi hotspots, though accuracy will be greatly improved and more reliable on iPhones with GPS.

Attachment Support

The iPhone already has limited support for viewing PDF, Word and Excel documents attached to emails. This support will be increased to include PowerPoint presentations and documents created using Apple’s iWork suite. So far, no details are available about the ability to create or edit documents on the iPhone (a feature that is available—albeit in limited form—on Windows Mobile devices).

Scientific Calculator

The existing Calculator application will be expanded in iPhone 2.0 to include a full range of scientific calculating options when the phone is help in landscape orientation.

Language Support

The iPhone 2.0 will introduce enhanced support for Cyrillic and Asian languages, including some character recognition support for Asian languages. The ability to switch between languages will also be made more readily available. As the iPhone 3G will launch in 22 countries and expand significantly from there, this is an obviously needed feature.

iPhone 3G

While the preceding features and technologies will be available to all iPhones, the iPhone 3G is the next generation of iPhone hardware. It features three major advantages over installing the iPhone 2.0 update on an existing iPhone:

  • Significantly improved data service available using 3G mobile/cell networks
  • True GPS capabilities
  • Improved battery life

In addition to these features, the iPhone 3G will represent some other shifts from the first generation of iPhone models in terms of form factor, pricing, and activation (largely due to shifts in Apple’s relationship model with carriers, in particular U.S. carrier AT&T).

3G Performance

The biggest advance that the iPhone 3G makes is its ability to access higher performing third generation (3G) data networks. The iPhone 3G supports UTMS and HSDPA network technologies, which will allow it to offer significantly faster Internet performance when connecting through a mobile carrier’s network than the EDGE data network capabilities included with the original iPhone. The restriction to EDGE has been one of the biggest criticisms and limitations of the iPhone since its original introduction.

For anyone needing to rely on a carrier’s data service for Internet access (as opposed to the iPhone’s built-in Wi-Fi options), this is a huge deal as EDGE performance typically makes simple tasks such as checking email much slower on the iPhone than on other 3G smart phones. 3G is not, however, a perfect solution. AT&T (and other carriers throughout the world) does not have full 3G data coverage across its entire network. In areas without 3G coverage, the iPhone 3G will still support EDGE connections. Even with such limitations in mind, this is still the biggest selling point for the iPhone 3G over existing iPhone models (either for current users thinking of upgrading or for users debating between buying a user first generation iPhone or buying a new iPhone 3G). It also places the iPhone on par with the data service available from many other smart phones on the market, essentially erasing their biggest advantage over the iPhone.


The iPhone will ship with full GPS capabilities. This gives it a great advantage in using location-based services over the existing iPhone. Even without adding any new applications, the ability to use GPS with the existing Google Maps application on the iPhone makes it a compelling device for basic navigation and location of businesses and contacts within a user’s vicinity.

Navigation device manufacturer TomTom has announced that they will offer a full-featured navigation application for the iPhone 3G, making it into complete GPS navigation device. However, since TomTom's announcement, it has become known that Apple's iPhone SDK prohibits the development of navigation tools. Whether this means that Apple has already made a deal with TomTom to develop an Apple-sanctioned navigation tool isn't immediately clear. It could also mean that Apple has plans to develop its own navigation application. In either case the capability to create navigation tools is something that the original iPhone cannot offer because its ability to pinpoint a user’s location, while passable for some basic uses, is not particularly reliable. (In some cases, it can locate a user within the span of city block, but in others, even in pretty densely urban areas, it can only indicate a rough location range as large as a mile or more in radius.)

Improved Battery Life

Apple has claimed that the iPhone 3G will offer up to 10 hours of talk time on 2G/EDGE networks, 300 hours of standby time, and 7 hours of video playback. While this is probably optimistic for battery life (as most mobile device manufacturer claims regarding battery life tend to be), the advance of technology in general and improvements Apple has made since the original iPhone was designed probably will translate into better overall battery life.

Form Factor

The iPhone 3G will sport a revamped form factor. The new design, while similar to the original, will be slightly thinner near the edges, and the back of the phone will no longer feature a brushed metal cover. Instead, the back will be available in a black or white finish (the white being an option only on the higher end 16GB model). One other significant advance in the design is that the new models will no longer feature a recessed headphone/headset jack, meaning that users will be able to use third-party options without requiring an adapter. Finally, the form factor will likely spawn a new generation of cases and related accessories as the altered dimensions will ultimately necessitate slightly different case designs for a secure fit. At this time Belkin and Griffin have already announced a line of iPhone 3G cases, though more will likely be available when the iPhone 3G ships in July.

Models and Pricing

The iPhone 3G will be available in two models—one with 8GB of storage capacity for $199 and one with 16GB for $299 (pricing outside the U.S. may vary, but Apple has apparently taken lengths to ensure similar pricing around the world). Aside from capacity, the only difference in the models the is option of a white back on the 16GB model. The price is a notable drop from the original iPhone pricing.

While iPhone model pricing is notably lower, the total cost of ownership is likely to be higher because it is expected that AT&T will charge more for 3G data service for iPhone 3G customers than the unlimited data plans included with the original iPhone. Although no pricing has been officially announced, reports indicate that data service for individuals will increase to $30/month for consumers and $45/month for business customers.

Activation and Contracts

While the original iPhone featured a purchase at store and activate at home option through Apple’s iTunes at home approach to speed transactions, the iPhone 3G will require in-store activation with AT&T (similar to traditional phone activations). Activation will be supported in both AT&T and Apple stores. This means purchases (at least initially) will need to be made in person and not online. It will also require a two-year contract agreement with the carrier. Finally, no AT&T pay-as-you-go (GoPhone) plans will be offered with the iPhone 3G.

The reason for these changes appears to be that AT&T is subsidizing the cost of the iPhone. This represents a significant shift in Apple’s relationship with AT&T, as first generation iPhones were sold unsubsidized. Another change is that the revenue sharing arrangement (in which Apple received a cut of every iPhone customer’s monthly bill) will be ended. These changes would explain the requirement of a contract and possibly the increased data charges (though the simple expansion to 3G networks also explains the changes) as vehicles to ensure profit for AT&T on iPhone sales. Apple’s stake for profit also shifts to actual numbers of units sold as well as sales of iPhone applications through the App Store rather than retaining exclusivity with AT&T through unsubsidized phones and revenue sharing.

One question that has yet to be answered is whether AT&T will sell unsubsidized iPhones to existing AT&T customers (including first generation iPhone owners) who have not reached the company’s upgrade threshold. This is the point at which a customer becomes eligible for subsidized pricing in exchange for extending his contract. Typically customers are allowed to purchase so-called upgrade phones at any point, but for a higher, fully or partially unsubsidized price.


The iPhone 3G will be available on July 11th. It’s likely that both Apple and AT&T stores (and other carrier stores and retail locations outside the U.S.) will hold launch promotions similar to last year’s initial iPhone launch. One major difference is the in-store only activation policy. This will make the actual purchase process more lengthy and require more hands-on interaction with customers. In all likelihood, this will be mean longer lines. So, the best advice if you want an iPhone 3G the day of its release is to show up early and stake out a spot.

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