Steve Jobs and Apple announced the much-anticipated updated 3G version of the iPhone today. Reviewers and bloggers are impressed with the new features, clearer connections, slimmer model and new updates— but most of the world will be talking about the new price. Previously $399, now only $199.

That's a 50% price slash for a new product in a world where newer usually means more expensive. Most Apple fans and Mac-aholics were shocked when Steve Jobs announced a reduction in price during the roll out of the first version of the iPhone. But this is a whole new ball game.

When the iPhone was first unveiled over a year ago, a major sticking point for potential buyers was the price. $599 was too steep for the average cell phone user to make the switch. A few months later with some needed updates, the price dropped down to $399. Early adopters were fuming and Steve Jobs tried to console his lovelies by offering a nice little $100 Apple gift certificate.

Now with a $199 price tag, the real question is how can Apple afford to do this? The first part of that answer has to do with the exclusive carrier of the phone's service - AT&T. According to a NYTimes article about this:

The carrier will no longer give a portion of monthly usage fees to Apple. Instead carriers will pay Apple a subsidy for each phone sold, in order to bring the price from $399 down to $199 for the 8 Gigabyte model. The company did not specify the amount of the subsidy.

In addition to the new upfront revenue for Apple, AT&T is banking some extra coin by bumping its monthly data service charge up to $30. It was previously only $20. However, some might argue this isn't a big gouge, because after all the new 3G service and network is heralded as being faster and clearer than the previous one.

Many Apple investors are creaming their pants over these new pricing models for Apple. For one thing, with a more standard up-front purchasing model with AT&T, Apple can standardize how it sells the iPhone internationally. Asian and European markets will be more likely to get on board. This is bad news for AT&T, because Apple doesn't need to care about young punks 'unlocking' the iPhone for different wireless services anymore. That'll hurt AT&T's exclusivity leverage.

But what if you stupidly bought the old iPhone just a few weeks ago? According to Apple, if you bought an old-iPhone after May 27th, you'll get the new 3G one for free. Hooray! Sucks for everyone who went on that big May 26th shopping spree.

I think the new updates, better reception and more marketable price tag will give the iPhone the edge going forward. I can't really see how similarly priced phones can compete with all that innovation and demand.

Actually when they start kicking this new version out on July 11, I may even get one. Let us know what you think in the comments section.

NYTimes: The Cost of the $199 iPhone, June 9, 2008

Gizmodo: iPhone 3G First Hands On, June 9, 2008

You've read the horror stories of foreign trips with the iPhone. I will give you one word of advice to save big money. Turn your iPhone to Airplane mode for the whole trip. I visited Mexico and took it off airplane mode for 1 day, yes 1 day. The phone transfered data constantly and it gave me a nice little $45 extra juice on my bill at the end of the month. Nothing like $3 each emails, and $10 accidental hit of the safari button. I knew in advance the cost and the airplane mode thing so I probably saved myself a few hundred dollars. I hope I'll save you some as well.

It's frickin' ridiculous. In full disclosure I am an iPhone buyer and user so I am a bit biased in my feeling. This being said, regardless of cost I would be the first to admit I din't get my money's worth out of something.

I am getting sick and tired of people bashing the iPhone that don't even own one nor have even had it in their hand for 5 minutes. Is ther too much hype? Sure it gets to be a bit much reading about the iphone on every single site you go to , but there's reasoning behind it. It is so simply a far superior product than anything out there that people are excited. If you bought one and aren't happy then you deserve to bash the thing. If you bash it because because others love it so much than you are just spiteful.

Sure I like the attention I get when I am using the thing in public but you know what I like even more? Watching Finding Nemo on the way to the family reunion. Not having to scroll the first 5 voicemail messages from my wife and going straight to the 6th one that I really wanted to hear. Going to ESPN and looking at the actual website instead of some makeshift version of it. And finally, having a gadget so well layed out an and easy to use that I can hand it to my 7 year old and she be entertained for the whole hour and a half trip. Try that with a Blockberry.

Kevin Rose better get a new source inside Apple. His "scoop" on the iPhone will go down in history as one of the worst of all times. The two batteries and the slide out keyboard? $299 and released on all carriers? Are you kidding me? Not even close. I know he said it was really here and might be touchscreen but I could have told you that.

In my opinion Kevin has lost all credibility when it comes to advanced information on Apple products. Yes, he might be able to tell you if it's coming but he won't be able to tell you anything about it. This is no way means he is not an intelligent tech guy and again by no means discredits what he's done with Digg. It just means he needs to concentrate on building Digg and leave the guessing up to the users. He is supposed to be the God of Digg and he ended up looking like a blogger wanna be (yes like me)

Why did he do it? He certainly doesn't need any more attention as his every poop is logged as a story on Digg. In the tech world there is no better role than the person who has the first info on a new Apple product. The only people that seem to be consistently on is ThinkSecret. They aren't always perfect but they are closer than anyone. Kevin wanted to be this guy. He'll never get that chance again.

These were all from a Steve Jobs Poster Contest. Go See Them All

Apple, in a brilliant business move, has decided to spin off their mammals division and break it off as an individual company. Apple has owned the website mammals.org and had a non publicized division for many years, creating much speculation as to what they planned to do with the name and development team. They have also owned iPhone.org for the same amount of time but most of the general public knows where that is headed. Our sources, a friend of the friend of Kevin Rose's cousin has informed us that Apple will start mass producing small portable animals that can be carried in a backpack or a purse. The animals will be bred through cloning by Panasonic and will be capable of mating with other iMammals through bluetooth technology. In reaction to past battery life criticism, Apple has bred these small mammals to have an incredible lifespan with most of them living from 15-20 years. The first batch of animals will come with fur of pink, blue, silver, with a special female version of a miniature squirrel coming out in red. All proceeds from the squirrel will go to local "Residential Wildlife" programs. The picture to the left is the first iMammal that will be released called the Wozzy. Apple, being the wise innovators, have come up with mammal safe packaging that is twice the size of the packaging that got the sellers of the bonsai kitten in trouble. It has also been learned that Apple will guarantee the live delivery of all their mammals and will replace any mammals that are dead after the packages are open. In the case of unsold animals they will have local representative in every store replacing all unsold mammals with fresh new stock every 60 days. We are expecting to hear more about this at MacWorld but until then you can go to mammals.org to find out more information.

Can You DIGG it?

"2007 will be the 30th aniversary of Apple Computer and to celebrate we will be bringing out a special "woodie" version of all of our most popular products" Could this be a headline for 2007? It is most likely not going to happen but what a great idea it would be. Apple could make a very limited edition of an ipod, a laptop, and an iMac and sell them as functional collectors items. It would be a perfect way to honor the first computer they sold that was only a board and had to have a box built by the purchaser. The most famous of which were made of wood. All three products have been made before as seen in these photos and of course Apple could do a much better job than any of these guys. Apple if you are reading (somehow I doubt they are) I will allow you to take my idea and run with it. I only ask for a few Steve Jobs autographs on one of the anniversary "woodies". P.S. Even though the woodie came out in 1976 the official incorporation is 1977.

woodcontour

Give it to the founder of Digg. He hangs in the right circles, especially the Apple circles. In his Diggnation podcast he confirmed the new Iphone and some of it's details

from Engadget
Extremely small form factor
Two battery design (with single charger) -- one for playing music, the other for phone functions
Flash memory: 4GB for $249, 8GB for $449
"Slide-out keyboard"
Possibly touchscreen
Likely launch with a 'singular GSM carrier' with CDMA and other GSM to follow

I am guessing it will also have bluetooth headphones with a microphone built in.

The two batteries is awesome. How they'll keep it small and have two I have no idea. Watch Apple stock move even higher. $100 here we come. I am guessing it will also have bluetooth headphones with a microphone built in.