A little over a year after shipping the first iPhone, Apple—in partnership with AT&T in the U.S and many other carriers worldwide - in 21 countries, including in a number of markets gett their first (official) taste of iPhone fever—has delivered the iPhone many wished it'd released last year.

At last, there's Wi-Fi-like cellular-wireless networking for e-mail, Web access, and other data services, vast improvement over the first-gen iPhone's 2.5G EDGE technology, and integrated GPS for location-based services. With 3G, you can surf the Web and speak on the phone at the same time. Something you couldn't do with iPhone 1.0's EDGE connection.

The iPhone 3G is also a little slimmer and lighter than first iPhone. Slightly rounded and less smooth in the back, the new iPhone is easier to get a good grip on and keep a hold of too, we've found.

A with iPhone 1.0 - since Apple nixed the 4GB model last fall - the new smartphones comes in 16GB and 8GB editions. Both in black, with a white casing option available for those who choose to go with the higher storage capacity.

Although the cost of the data plan has jumped to $30 from $20, the new iPhone sells for several hundred dollars than the first. The 8GB iPhone 3G costs $199, whereas that capacity model sold for $599 at launch last year. The new 16GB iPhone is $299.

While the hardware refinements in the iPhone 3G are welcome, it is the new software capabilities that ship with this year's model that really set it apart from last year's. These include major changes, such as the much-touted enterprise capabilities (i.e. push e-mail through Microsoft Exchange server) and many more-modest - but still welcome - alterations, such as the ability to access Contacts from the Home Screen and not just from within the iPhone's Phone application.

The most important improvement brought to the iPhone with the new model is the ability buy and download (through iTunes or on the iPhone itself) and install official native software. The iPhone App Store, both on the device and in iTunes, is intuitive and easy to use.

And with 125 or so apps (out of the more than 500 titles already available) free, no one should lack for new software to try with their iPhone. While we expect the unofficial iPhone application market to continue (the iPhone 3G has reportedly already been unlocked and jailbreaked), there's the open question - in the face of so many official titles making its way to consumers through the App Store - as to whether it'll be as strong or as exciting to follow as when it was the only game in town.

All the software improvements arrive courtesy of iPhone firmware update 2.0, which ships with the iPhone 3G, but must be downloaded and installed the first iPhone. Unfortunately, Apple hasn't made this update officially available to those with the first-generation iPhone yet.

That hasn't stopped some folks from giving it a try through a direct download links that, it turns out, may have not been meant for iPhone 1.0 users. While some report the whole process going fine, others (see here and here) have run into considerable trouble - ranging from some features not working to total bricking of their iPhone. Our suggestion is to wait to install iPhone 2.0 until iTunes makes it available to you upon a synchronization. That way you'll know it is the version intended for your device.

Up & Running?
The first few rounds of AT&T and Apple iPhone activations, from most reports, went smoothly this morning. Unfortunately, the same cannot be said as the day went on.

Last year, customers activated their iPhones at home, which lead to folks quickly walking out of Apple and AT&T stores after purchase. This time around, the plan was to activate the iPhone 3G in the stores. The point of the change was to make sure users signed on the dotted line before exiting the store. That way, in theory, Apple and AT&T wouldn't see the same rampant unlocking and shipping abroad of iPhone 3Gs as with first-gen model.

This procedure has proved too much for Apple's iTunes registration servers, resulting in folks being sent home without their iPhones activated. Told to complete activation at home, customers have been running into the same trouble as the AT&T and Apple store employees, leaving them frustrated and without a working iPhone.

We spent our morning at an AT&T store in the St. Louis region, the very same one we covered during the initial iPhone launch in June 2007. The store opened at 8:00 a.m.



Line for iPhone 3G wraps around AT&T store.

The line this time around seemed longer at first. But we weren't seeing the same level of newcomers after the first hour and half of opening as last year

At least 40 people were waiting patiently in the rain for their chance to buy the iPhone 3G this morning. Many of the faces were familiar from last year. In fact, the first person online this go around - a young man in his early twenties - was second online last year. He started the line at midnight.


First few customers on line await iPhone 3G activation.

It took only about 15 minutes from him entering the store to him walking out with a fully-activated iPhone 3G. The next people in line, a couple, were still there a half-hour later, however.

By around a quarter after nine, the store had sold out of 16GB iPhone 3Gs. All that was left was 8GB models. An AT&T representative told us that more iPhone would be arriving at the store in the evening.


Apple's iPhone 3G in hand at last.

Fortunately, you didn't have to stay on line and wait in the heat to get one of these. Customers could come in and order one. AT&T would call them to come in and pick their iPhone 3G when it arrived.