Apple cuts the price of 3G iPhone

Apple has unveiled its second generation iPhone, a 3G device that will sell from 127 euros (US$199).

As expected, Apple CEO Steve Jobs took the wraps off the new HSDPA device at the Worldwide Developer's Conference in San Francisco on Monday.

The phone features a new camera, a GPS chip and a contacts and calendar suite called MobileMe aimed at the enterprise market.

The 8GB version will sell for 127 euros (US$199) and the 16GB unit for 191 euros(US$299) in the US and other markets from July 11.

AT&T announced it would continue to be the exclusive US carrier channel, but said it had scrapped the previous revenue share arrangement in favor of a handset subsidy.

Jobs gave no details on whether this would be applied outside the US.

The announcement comes a year after the launch of the first iPhone, which has sold 6 million units.

Ovum senior analyst Steve Hartley said the new device 'goes a long way in addressing some of the shortcomings of the original device: 3G, cost, geographic availability and third party applications.'

'Unfortunately, no details were forthcoming regarding the operator business models this time and what, if any, revenue sharing agreements are in place between Apple and the operators,' he noted.

He said it was also uncertain whether existing iPhone users, who paid as much as 384 euros (US$600) for a slower device, would be allowed to break their contracts to upgrade to the new phone.

AT&T's share price fell Monday after it revealed the subsidy scheme.

According to the Apple web site, of the 25 launch markets worldwide, only four are in Asia-Pacific - Japan, Hong Kong, Australia and New Zealand.

The phone will be sold later in India, Singapore and the Philippines, but no agreement has been made to ship to China, Korea, Indonesia or Vietnam.