By Prince McLean

Published: 08:25 AM EST (05:25 AM PST)

Cheaper construction to sell by the dozens.

All together, the new iPhone 3G feels newer but slightly cheaper, like a sturdy wooden desk replaced by one from Ikea. The reason behind the changes is of course related to the new unit's cost: the original 8GB model was originally designed to sell for $599, while the new 8GB model starts at $199. The classy, durable brushed aluminum back of the original unit, its bundled dock, and Firewire charging are now gone in a cost cutting bid to sell iPhones to a wider audience. 

Long-time Mac users might see the cheaper new iPhone 3G as the latest version of Apple's early 90s move away from motorized floppy disks to the cheap manual eject drives used by PCs, or its mid 90s move from SCSI to IDE drives to match lower priced computers, or the more recent move from Firewire to USB for lower-end data interfaces on the iPod. 

The necessity for all the cost cutting was an aggressive new price point. Along with a broader international rollout, that lower price tag has enabled Apple to nearly quadruple the number of units sold in its debut weekend, completely blowing past any fears that last year's iPhone launch was a flash in the pan whipped up with some clever smoke and mirrors marketing. The iPhone is here to stay, and the second generation iPhone 3G is a strong update to Apple's initial foray into the smartphone market, although it is not without flaws.

Internal new hardware features: 3G mobile networking

Despite being far more affordable and feeling a bit cheaper, the new iPhone 3G delivers strong advancements inside. The most obvious one is packed into its name: support for "third generation" UMTS mobile networks, which deliver ubiquitous data connectivity at speeds approaching WiFi wireless networking. Last year's iPhone was limited to "2G" GSM, GPRS, and the EDGE data service sometimes referred to as a "2.75 G" network. 

Third generation UMTS voice and data service offers a number of significant improvements over the original iPhone's GSM/EDGE. The first is of course data speed, which is readily noticeable when using Maps, browsing the web, or using other network-enabled applications. Apple calls the new phone "twice as fast," and that's not an understatement. 

It's several times faster to get things done and look up information with 3G rather than EDGE. The new iPhone 3G is fast enough to enable a whole new suite of applications, from streaming radio to VNC remote screen sharing and other new features being unlocked by third party developers. 

To 3G or not to 3G, that is the question

In the US, many existing "3G" smartphones exclusively use the Qualcomm CDMA EVDO networks built out by Sprint and Verizon Wireless. Worldwide however, "3G" typically refers to UMTS, a standard adopted by GSM providers (Qualcomm's CDMA and the GSM standard are long standing, incompatible competitors). The iPhone 3G works exclusively with UMTS networks, supporting both the UMTS networks in Europe and Asia and AT&T's US version of the standard, which uses unique radio frequencies. 

T-Mobile's American UMTS network uses a third radio variant (because the US was running short on available radio frequencies) that the iPhone 3G can't use, and the 3G CDMA EVDO networks operated by Verizon and Sprint are also incompatible. So despite the general use of "3G" as a buzzword, the iPhone 3G can only work on AT&T's 3G network in the US. 

For Americans in urban centers and most of Europe and Japan, UMTS support makes the iPhone 3G significantly more practical for mobile browsing and other data functions such as Maps, Mail, and the new lineup of network-savvy mobile applications in the iPhone Apps Store. Users in the rural US might find it difficult to receive UMTS coverage, given the relatively limited rollout AT&T has completed. In fact, even within the colored areas on AT&T's maps indicating where 3G service should be available, there are plenty of places where 3G service can not be received. 

Works great when you can get it

Apple can't do much about AT&T's mobile service, so even if the iPhone 3G was perfect, it would still be constrained by AT&T's 3G coverage. Things are slowly improving, but as AT&T's 3G service coverage maps indicate, UMTS reception is limited to big cities and a few other areas, such as Lake Tahoe. The blue areas on AT&T's map (below, and browsable at AT&T Coverage Viewer) are sometimes overly optimistic in claiming 3G reception.

While almost completely blue, hilly San Francisco has plenty of 3G black holes, even in densely populated areas where you'd least expect a problematic signal. Our neighborhood in the center of the city is also confidently blue in AT&T's map, but there's zero 3G service for many blocks in each direction. It almost seems as if AT&T's 3G service is more broadly available in gritty neighborhoods such as the southern Outer Mission / Excelsior District than in some of the more affluent neighborhoods along Market Street.



Exploring around in the forested parks that dot San Francisco's hills, we found that 3G service can rapidly fall off under the cover of tall trees. Interestingly, if you bring up GPS-powered Maps (more details below) in an area where you can't get data service, you can end up with a dot confidently showing your satellite-derived location on a blank map, which isn't very useful. 

Service may also fall off inside buildings. If you visit Stonestown Galleria near San Francisco State University, you'll lose 3G service after entering the mall. Over the last year, Apple has installed 3G/WiFi network antennas in most of its retail stores in anticipation of the new iPhone 3G. However, not all stores have been upgraded yet. At Stonestown, you won't be able to try out 3G service within Apple's retail store, where customers were waiting in hours-long lines to buy the new phone. Even worse, Apple doesn't even have its in-store WiFi working correctly there either; only computers (but not iPhones) can connect to it, leaving iPhones stuck on the bleeding EDGE. 

UMTS 3G coverage in other markets outside of the US seems to be far better established, as carriers worldwide have been migrating to the same standard well in advance of the US. Here at home, 3G service has been splintered by the CDMA vs GSM split between Verizon/Sprint and AT&T/TMobile, as well as problems related to allocating the same radio frequencies that are used in other markets. AT&T's UMTS service is still getting rolled out, so things should continue to improve, particularly as the iPhone continues to support AT&T's growth. Unfortunately, while WiFi can serve as a data substitute in areas lacking 3G service, the iPhone 3G can't use WiFi to place calls, access Visual Voicemail, or send and receive SMS text messages.

While many observers have ballyhooed the consolidation of mobile providers in the US market, and particularly the growth of Cingular after its rebranding as AT&T reminded them of the single old phone company from the distant past, AT&T's emerging preeminence is also making it possible for the company to accelerate the upgrade of its network to the global UMTS standard. If mobile service were only offered by local, regional companies, we'd likely be stuck with another decade of fractured standards, incompatibility, and even slower progress.

On page 4 of 5: Faster, and four other benefits to 3G; and Internal new hardware features: GPS.