iPhone News Updated

Apple debuts iPhone 2.0

Apple’s iPhone will surf the Web twice as fast for half the price, but the cost of calling plans will rise $10 a month, the Cupertino, Calif.-based company said Monday.

On July 11, a year after the company introduced its popular touch-screen “smart phone,” Apple Inc. will release an upgraded version of the cellphone for $199 - less than half of the $499 to $599 initial sticker price of its predecessor.

A model with twice the memory, 16 gigabytes, will sell for $299, and both models require two-year phone contracts.

It’s unclear if the phone, which sports several new features, will appeal more to new users of smart phones or to those interested in upgrading from the older model.

AT&T is raising the prices for service plans to start at $39.99 per month, plus $30 for unlimited data, $10 more than the cheapest plan for the first iPhones.

The new phones will run on a faster “3G” network operated by AT&T, the exclusive service provider for the handsets.

The network is available in Chandler, Gilbert, Glendale, Mesa, Peoria, Phoenix, Scottsdale, Tempe and Tucson, AT&T says.

Speedier connections will satisfy the biggest customer qualm about the phones.

“My only complaint is it’s slow,” said Mark Covarrubias, 28, of Phoenix, who bought an iPhone last fall.

Covarrubias loves the phone, but he said he probably would hold off before buying an upgraded handset.

Initial reaction among Apple aficionados seemed positive Monday, although many seem to like the products they already own.

Gabe Gomez, 17, of Phoenix, likes the iPod touch Web-surfing device he bought for $300, which has most of the features of an iPhone except calling capabilities. Unlike iPhone, which has a monthly service charge, iPod touch allows for Internet access in places with wireless connections.

“It’s amazing. I use it so much,” Gomez said. “I use it for school constantly.”

The first iPhones were officially released June 29, 2007, for $499 to $599. Ten weeks later, Apple slashed the price $200 on the more expensive 8-gigabyte units and offered those who paid the higher price a $100 credit toward Apple goods. The new 8-gigabyte phones will be $199.

Some adopters of the fancy phone, once again, are feeling burned for buying early.

Magda Kowalczuk, 29, of Mesa, wants the faster phone but recently bought an iPhone.

“I want the better one,” she said. “I wish they would make a deal where I could trade this one in towards the new one.”

People like Kowalczuk who have the first iPhones will be able to download the iPhone 2.0 software free July 11, according to the company. That will give them added capabilities such as viewing Microsoft PowerPoint files.

The new low price could entice some of those who have waited to purchase the phone.

“I tell myself, aah, if I had the iPhone, I could do this,” said Adam Deen, 17, of Queen Creek, who has a contract with another service provider for his cellphone. He was at the Apple Store in SanTan Village in Gilbert on Monday.

“Two-hundred dollars seems worth it to me,” he said. “If it’s something that’s worth the wait to me, I can wait.”

Other shoppers are hopeful that they someday will be able to use another cellular service on the trendy phones.

“(I’d be interested) if it was with a different provider,” said Robert Ellis, 22, of Chandler. “Everybody’s trying to copy it. I think it kind of sets the baseline for touch-screen phones.”

The phones are being offered cheaper thanks to a new agreement between AT&T and Apple. The carrier will pay the handset maker for the phones, then subsidize the phones to consumers in exchange for a two-year contract, a common industry practice.

“We have changed the nature of the agreement to a more traditional wireless model,” said Ralph de la Vega, head of AT&T Mobility.

The arrangement will allow AT&T to capture more buyers because they now must activate the phone before leaving the store. Previously, iPhone buyers could purchase the gadget without activating it.

Many phones were “unlocked” so they could be used with other carriers and many were shipped overseas to countries where they weren’t available. Toni Sacconaghi, an analyst, estimated that only half the iPhones sold have been activated with AT&T service.

Subscribers to iPhone are particularly valuable to AT&T, because they’re unusually happy with their phones and pay an average of more than $90 per month for service, compared with less than $60 for other subscribers under contract. Less than 20 percent of AT&T customers have “smart phones” that are able to take full advantage of the company’s expensive 3G network.

[Thanks: http://www.azcentral.com]