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SAN FRANCISCO —  Steven P. Jobs, chief executive of Apple, introduced a new cheaper iPhonemodel that navigates the Internet more quickly, expanded itsdistribution overseas and displayed a range of new applications andservices in order to establish Apple as a major player in the cellphoneindustry.

Apple, the maker of consumer electronics and computer equipment, hadset a goal of selling 10 million iPhones in 2008, which would establishit as one of the major smartphone makers in the less than two yearssince it began shipping the original iPhone. Apple has sold six millionphones globally since its introduction.


Analysts said that Mr.Jobs, one of the world’s best product marketers, had largelyaccomplished what he set out to do and they welcomed the moves heoutlined in a presentation before software developers on Monday.


“This is the phone that has changed phones forever,” Mr. Jobs said.


Mr. Jobs said the  new iPhone 3G, to be available in the United States through AT&Tbeginning 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 peoplebuying the phone had been price.


Analysts and industryexecutives said they believed the lower prices would bring in newconsumers who had been put off by its $399 price. “The price is clearlycorrect,” said Mike McGuire, a research vice president at Gartner, amarket research firm based in San Jose, Calif.


As widelyanticipated, the phone will run on so-called 3G wireless networks thatallow much faster Internet connections than the original iPhone. Duringa 110-minute presentation, Mr. Jobs went to some lengths to compare thespeed of the new iPhone 3G to the current phone and to rival phoneslike the Nokia N95 and the Palm Treo 750. He called downloads  “amazingly zippy.”


Thephone, sleeker than the original, will also have built-in GlobalPositioning System capability to allow location-based services. It willalso have a longer battery life in some cases, five hours for talkingon the 3G network and 24 hours for playing music on the phone.


Theannouncements came on the opening day of Apple’s Worldwide DevelopersConference, where several developers showed off software that turnedthe iPhone into a game console and a musical instrument. Othersdemonstrated programs that used the phone’s ability to locate its userson a map.


At one point during his demonstration, Mr. Jobs showed a tracking feature making it possible to watch on a Google map as an iPhone user drove down Lombard Street, the twisty tourist attraction in San Francisco.


Mr. Jobs also indirectly challenged Microsoftwith a mobile Web service call MobileMe, intended to permit a user tosynchronize a phone, calendar and contact information on the iPhone andmultiple devices including PCs and other iPhones. The service, whichwill costs $99 a year and comes with 20 gigabytes of data storage, issimilar to a service offered by Microsoft.


Apple’s obstacle inoffering the new service is that its competitors, like Google, offersimilar services for less. Google offers 10 gigabytes of e-mail storagefor $20 a year.


Apple announced that it would begin selling theiPhone in 70 countries this summer; the current phone is being sold insix countries.
“Given the feature set, ecosystem partners,launch countries and the pricing of the iPhone, they are likely to hitthe 10 million mark by September-October,” said Chetan Sharma, anindependent consultant on the wireless data communications industry.


The company, based in Cupertino, Calif., announced on Monday in aregulatory filing that it would sell the 3G phones under differentbusiness arrangements in the United States. In the past, Apple sharedservice plan revenue with AT&T and other cellular firms. Thesecond-generation iPhone will be sold without the recurring revenuestreams and without the exclusivity arrangements it was previously ableto command.


While trying to convince cellular carriers around theworld that they should carry the iPhone, Apple realized that it neededto change the financial deal that it had with the carriers in the firstsix countries.


“We’ve changed our business model, from getting acut of the future revenues to just a more traditional model,” Mr. Jobssaid in an interview on Monday. “That’s enabled us to roll out aroundthe world much faster.”


AT&T said it would subsidize thephones to attract consumers. Under the plan, unlimited iPhone 3G dataplans for consumers will be available for $30 a month, in addition tovoice plans starting at $40. Business users will be charged $45 a monthfor data.


By giving back the revenue to the carriers, which theymay use for subsidies, Apple is hoping to dramatically increase itsvolume, as well as sell more Macintosh computers to iPhone users.


“It’snot about the iPhone,” said Charles Wolf, a financial analyst atNeedham & Company. “There’s a tradeoff that Apple is making. TheiPhone halo effect will be far more powerful than the iPod halo effect was. It’s going to stimulate Mac sales among iPhone users.”

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