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Apple (Nasdaq: AAPL) used the first day of its annual Worldwide Developers Conference (WWDC) to focus on power, speed and price-slashing regarding its hot-selling iPhone.
Monday's keynote speech and demonstrations introduced the new iPhone 3G S ("the 'S' stands for speed," in the words of company senior VP of worldwide marketing 
Phil Schiller) that is supposed to be faster in terms of download and connection speeds and more robust when it comes to juggling applications.
It comes with a more-powerful three-megapixel camera than previous generations. The camera will also be able to shoot video. The phone will include still photo and video-editing software, and it will throw in hands-free voice control. Battery life has been extended, Schiller said.
While the new 3G S will begin selling for US$199 for a 16 GB version and $299 for 32 GBs starting June 19 (with a two-year service agreement), Apple's loudest shot across the bow at the rising tide of smartphone competitors like Palm (Nasdaq: PALM) and Research In Motion (Nasdaq: RIMM) may be its new $99 price tag for the current iPhone 3G. That goes into effect immediately.
"With a breakthrough price of $99, we are thrilled to get iPhone 3G into the hands of even more users who want them," Schiller said.
The Smartphone Sweet Spot?
"It wasn't that long ago we were waiting for the smartphone to break the $200 price-point barrier," Kevin Burden, research director for ABI Research, told MacNewsWorld. "Now what we have is an iPhone -- considered to be the pinnacle of smartphones -- at $99. That's a very capable device for a lot of people. It's almost an impulse item for some people."
Pricing strategies were also apparent in other product news from the Moscone Convention Center in San Francisco. Although Apple executives spent most of their time talking all things iPhone -- including demos of iPhone 3.0 software features already discussed at February's company event, such as cut-copy-paste of text and landscape orientation for email -- the company also introduced a new line of MacBook Pro notebook computers that cuts prices: A new 13-inch MacBook Pro starts at $1,199. Certain lines of MacBook Air notebooks are $700 cheaper than previous models - new prices set for the closest thing Apple has to a netbook are $1,499 and $1,700.
Apple also let its Snow Leopard Mac OS X operating system out of its cage for public view -- with built-in support for Microsoft (Nasdaq: MSFT) Exchange -- and announced it would be available in September as an upgrade for current Leopard users for $29. That price brought loud applause from the Apple acolytes in the Moscone Center audience.
Content-Ready iPhones
The new iPhone 3.0 operating system software -- free for current iPhone users and $9.99 for iPod touch owners -- also supports iTunes and will allow users to download movies and TV shows directly to their phones. That, coupled with an App Store that now boasts some 50,000 applications and has spawned a cottage industry for small developers looking to break into the software big leagues, tells Burden that Apple continues to mine the consumer user base. For Cupertino, content is indeed king.
"It's encouraging to see that with each generation of the iPhone OS and the devices, they come out a few steps forward in terms of the users' ability to want to consume a variety of different types of content in their device - not just do it, but do it well, and want to do it again."
Of all the applications and features announced for the iPhone 3G S, Burden is most impressed with the built-in digital compass for handheld navigation. "That's hard to do right. It's not going to make people say 'Wow, I gotta go get one of those things,' but knowing what it takes, it's difficult to do."
Announcements regarding support for accessory makers, such as the GPS rig introduced by TomTom, is a potential breakthrough, he added.
"The hardware accessories have a software component to them," Burden said. "That's pretty slick. It's an evolutionary wave we've been expecting. You will see more intelligent accessories that go beyond the hardware. That's more than just getting users excited and getting developers excited -- there's a whole other ecosystem around accessories."
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