Apple unveils faster 3G iPhone with GPS

SAN FRANCISCO — Apple unveiled an upgraded iPhone today with a faster Internet connection and GPS capabilities — and priced $200 lower than current models.

Analysts have said Apple needed to slash the multimedia gadget's price and upgrade it to work over so-called 3G, or third-generation, wireless networks to hit the company's target of selling 10 million iPhones by the end of 2008.

An 8 gigabyte model is to sell for $199 starting July 11. A 16 gigabyte model will cost $299. They'll come in a black case with a white case optional on one model. The devices are to roll out initially in 22 countries.

Apple has inked deals for wireless carriers in a total of 70 countries to carry the new iPhone.

Apple's participation in the cellphone market has been hurt by complaints about the year-old iPhone's data download speeds, which can make simple tasks like sending pictures over e-mail or downloading Internet videos painfully slow.

The device's new speed and GPS features may attract more businesses to see the iPhone as a valid competitor to the business-friendly Blackberry smart phone.

The original iPhones operate on so-called 2.5G networks. The upgrade in performance from those networks to 3G will be similar to the difference between a dial-up Internet connection and a high-speed broadband connection.

Apple Chief Executive Steve Jobs said the computer chips used on the faster network sapped too much battery life and were too bulky when the iPhone was being designed so the company decided to wait to improve the device until better chip technology emerged that could fit the iPhone's slim design.

The addition of global-positioning technology improves the iPhone's accuracy in locating users. Current versions use a combination of cellphone towers and Wi-Fi locations to help users figure out where they are.

Jobs showed off the phone at Apple's Worldwide Developers Conference in San Francisco. His announcements were widely expected.

Apple shares, which tend to fall just after major announcements, tumbled $4.03, or 2.2 percent, to close at $181.61 a share.