Apple's new iPhone takes bite out of rivals (Feature)

By Andy Goldberg Jun 19, 2009, 2:59 GMT

San Francisco - Apple's newest iPhone hits stores in the US and seven other countries Friday, and judging by the level of media attention you might think that the boffins at Apple's Infinite Loop headquarters had discovered the secret of perpetual motion.

Actually, all they have done is created an improved version of the must-have gizmo of the last decade, making millions of Apple fans tingle with anticipation. Apple's small band of rivals, meanwhile, are sweating about how they will ever match the hype and the products created by the iconic Silicon Valley company.

Analysts expect Apple to sell a highly respectable 500,000 of the new iPhone 3G S models in their first weekend on sale - that's up to ten times as many sold by Palm when it's highly touted iPhone rival, the Pre, went on sale this spring.

While the new iPhones look exactly like their predecessors, they are blessed with double the processing speed, a better camera that includes video capabilities, and for the legendary need nerds who just love the iPhone's sleek and shiny look, the new device has an oleophobic display, which means that it doesn't attract grease, so it's easier to clean off those nasty fingerprint smudges.

The new iPhone rectifies long-standing gripes by finally coming up to standard on voice-control and offering a significantly stronger battery than previous models.

But it's not just the hardware that must be forcing executives at Palm, Samsung and Rim to wonder just what they have to do to match Apple's relentless innovation. The phone runs on iPhone Operating System 3.0, which arguably is even more crucial to Apple's ambition to create the dominant technological platform for the mobile digital age.

This new software is available to owners of all models of the iPhone, and many tech analysts are advising budget conscious consumers to forego splashing out on the new device and simply install the new, free operating system on their current device.

The software includes the ability to cut and paste between documents, faster camera activation, improved text messaging and a Find My Phone feature that allows you to locate your missing phone and if necessary wipe all personal data from a remote location.

All these features are tied to Apple's secret weapon: the massive army of developers who have created more than 50,000 separate applications for the device and effectively turn it from just another smartphone to a customized gadget.

'Basically, when we look at the iPhone we don't see a mobile phone, we see a computing platform,' says Shervin Pishevar, chief executive of Social Gaming Network (SGN).

With more than 1 billion downloads already from Apple's iTunes, customers seem to agree. So does independent analyst Carmi Levy.

'The growth curve of these downloads continues to accelerate - it's a runaway trend,' he said. 'It almost doesn't matter what the iPhone can do the day you bring it home. You can find the software you need to make it fit your needs.'