In June, 2007, Apple's chief executive, Steven P. Jobs, introduced the iPhone, which instantly became one of the most talked-about consumer products ever. Thousands of customers lined up to be the first to buy the phones, which featured computing and Wi-Fi capabilities, along with a crisp, computer-like display on an innovative touch screen. Rivals rushed phones with similar features onto the market.

Mr. Jobs set an ambitious goal -- to sell 10 million of the phones in 2008. By March, 5.5 million had been sold, but the pace had dropped to a less-than-spectacular 600,000 a month. Around the same time, the guessing game began as to when the company would introduce a new version and what new feaures it would have.

The new phone searches the Internet more quickly and comes with a host of new applications. But the biggest change was a sharp reduction in price. Mr. Jobs said the new iPhone 3G, to be available in the United States through AT&T beginning on July 11, will sell for $199 for the 8-gigabyte model and $299 for a 16-gigabyte model. He said the biggest barrier to people buying the phone had been is $399 pricetag.

As widely anticipated, the phone will run on so-called 3G wireless networks that allow much faster Internet connections than the original iPhone. The phone, sleeker than the original, will also have built-in Global Positioning System capability to allow location-based services. It will also have a longer battery life in some cases, five hours for talking on the 3G network and 24 hours for playing music on the phone.