Already having conceded to upset "early adopters" of the iPhone who were taken by surprise when Apple dropped the price of the 8GB iPhone (and dropped the 4GB iPhone altogether), Apple may have yet a new crisis on its hands: CEO Steve Jobs' apparent pre-announcement that a 3G version of the iPhone will be available next year.
If the report is true, this could be worse news for Apple given that the price drop had to have come so soon to stimulate demand. There's nothing that kills demand for the current generation of a product like an announcement that the next generation won't be stillborn with obsolete networking technology the way the currently available generation was. Even if the report of Jobs saying this isn't true, my guess is that a 3G iPhone in 2008 is pretty much a sure bet.
Jobs has been quoted as saying that “The trade off with 3G [in battery life] is too bad right now." Either something is about to change when it comes to battery life that Jobs knows about but we don't, or, Apple is realizing that price isn't the only reason that prospective iPhone buyers are holding off for iPhone 2.0 (a suggestion I've been making since the iPhone came out). Sure, the next version of anything will always be better than the current one. But iPhone 2.0 will very likely get the things right that iPhone 1.0 got so wrong.
For example, in addition to making it work on the faster of the two networks that most GSM-flavored providers like AT&T run (was this really that hard of a decision?), I'm guessing that it will have removable batteries as well. After all, assuming no major breakthroughs in battery technology (and we know of no such breakthroughs coming), if Jobs is right about the impact of having a 3G radio in the iPhone on battery life, he'll have no choice but to make the battery easily replaceable by users who want to carry spares with them. Also, I suspect that there are bunch of hidden costs in the return/loaner program that's currently in place that make that program a non-starter from an Apple business perspective. Although there are plenty of conspiracy theorists who claim the current non-replaceable battery setup is designed to stimulate upgrades to new iPhones rather than repairs, redesigning the iPhone with replaceable batteries in mind is a much cleaner approach that will make Apple's business more predictable. Stockholders like predictability.
Perhaps iPhone 2.0 will also address the third most talked about iPhone flaw (in addition to missing 3G support and non-replaceable batteries): its soft keyboard. While I've heard people rave about how it's the best soft-keyboard they've ever used (most soft-keyboards are so bad that this may not be much of a compliment), I've heard others growl that it's unusable for loquacious authors of e-mail and text messages. Might the new design have some sort of hardware-based keyboard or will Apple do what it does with the touchpad on its notebooks and stick us with something that some segment of the market (like those of us with big fingers) simply can't use?
The fourth most talked about flaw -- its total RAM -- will most definitely get a boost. Today, at 8GB, it doesn't take much in the way of music and videos to swallow an existing iPhone whole. Apple probably can't go to a hard drive just yet (talk about battery life killers). But, by 2008, I'm guessing that iPhone 2.0 will not only get more RAM (either 16 or 32 GB), but, if Apple's is smart, it will also add an SD slot: one that supports the high capacity version of SD known as SDHC.
Jobs has apparently also implied that Java, as mobile runtimes go, is an endangered species. I think however, if you ask Sun, you'll learn that it's the most widely deployed platform on the face of the planet. I'm pretty sure I heard somewhere that the number of phones with Java in them dwarfs the total number of PCs running anything, much less Windows. The iPhone with its Safari browser may get plenty of rich internet applications via Web sites built in AJAX. But I wonder if the next version will support one of the prevailing runtimes (Java or Flash, I don't think there's a chance in hell that Apple would go for Microsoft's Silverlight) so as to increase the iPhone's appeal due to application availability (especially in overseas markets where mobile runtimes are getting more traction than they get here in the US).
But it's that 3G support alone that should kill any desire for iPhone 1.0. Maybe then, there'll be a shred of truth to the Apple TV advertisement that says "It's not the mobile Web, it's just the Web." Meanwhile, so long as an iPhone is connecting to AT&T's network and not some WiFi network (the iPhone also has a WiFi radio), the browser experience is most definitely saddled with the sort of granny lane performance that has "mobile Web" written all over it. False advertising? You decide. iPhone 2.0.? You wait. If Microsoft doesn't get things right until 3.0, there's one thing you can say about Apple: 2.0's the charm.