Apple unveils iPhone 4, adds video calling feature

Apple (NASDAQ:AAPL) unveiled the next generation of its popular iPhone, called the iPhone 4, at the company's Worldwide Developers Conference in San Francisco. The new version of the device, which now features a front-facing camera for video calling, HD video capture and several other hardware improvements, is the company's latest effort to keep its momentum going in the mobile market.

Click here for more pictures.Apple CEO Steve Jobs appeared at the event in his customary black turtleneck and jeans to deliver the presentation. Much of the suspense was taken out of this year's annual iPhone unveiling back in April after the tech blog Gizmodo published photos and descriptions of a prototype iPhone. "Believe me, you ain't seen this," Jobs said, according to reports.

The new device, which goes on sale June 24 and will come in black and white, will be $199 for the 16 GB version and $299 for the 32 GB version with a two-year contract from AT&T Mobility (NYSE:T), which is remaining the exclusive carrier of the iPhone for now. AT&T said current iPhone customers who are eligible for an upgrade before the end of this year will be able to get the iPhone 4 for the $199 and $299 prices when they sign up for a new two-year contract.

The company is getting rid of the iPhone 3G, and the 3GS is going to be on sale for $99 beginning June 24. The phone will initially be available in the U.S., France, Germany, the United Kingdom and Japan, Jobs said, though more countries will be added in July, August and September.

The video calling feature, called FaceTime, will work only from one iPhone 4 to another and only over WiFi in 2010.  It will not be working on 3G cellular networks. "It's WiFi-only in 2010, we're working with the cellular providers to get things ready," Jobs said, according to reports. 

Jobs had to halt his presentation when his iPhone 4 could not connect to the Web. "I'm afraid we have a problem and I'm not going to be able to show you much today," he said. Someone in the audience yelled out, "Try Verizon (NYSE:VZ)!" Jobs asked audience members to disconnect from WiFi before he was able to demo some of the Web features of the phone.

Click here for full specifications.The iPhone 4 has a 3.5-inch display and runs on Apple's A4 processor, which also powers the iPad. The device is 25 percent thinner than the iPhone 3GS, and has a glass front and back and a stainless-steel band that functions as the antenna system. The new screen has a 960 x 640 resolution, which quadruples the number of pixels available on the screen, which Apple calls a "retina display." The display sharpens text, pictures and video, Jobs said. The iPhone 4 also has a larger battery that extends the device's battery life. The phone's camera has been upgraded to a 5-megapixel camera, with 5X digital zoom and can also record HD video at 720p/30fps.

Jobs also said that for $4.99, customers can download iMovie to the iPhone 4, which allows them to record, edit and post videos directly on the phone. The phone also comes with a gyroscope, which will allow developers to develop games and other apps to take advantage of the new motion controls.

Click here to compare the iPhone 4 vs. the iPhone 3GS.Apple sold 8.75 million iPhones in the quarter, representing a 131 percent increase from the 3.79 million it sold in the year-ago quarter, and slightly higher than the 8.7 million it sold in the last quarter. According to IDC, handset vendors around the globe shipped 54.7 million smartphone units in the quarter, up 56.7 percent from the year-ago quarter, and outpacing growth in the overall handset market, which grew 21.7 percent.

The company is taking advantage of the surge in smartphone sales--the company's global smartphone market share surged upward from 10.9 percent a year ago to 16.1 percent in the first quarter of 2010. Apple still trails behind Nokia (NYSE:NOK) and Research In Motion (NASDAQ:RIMM) in global smartphone market share.

For more:
- see this AT&T release
- see more iPhone 4 pictures
- see iPhone 4 full specifications
- see the iPhone 3GS vs. iPhone 4
- see this Engadget post
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this WSJ live blog (sub. req.)
- see this Engadget live blog
- see this AllThingsD live blog

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