A peek into the all new iPhone

SAN FRANCISCO: June has arrived and for Apple fans and investors that means just one thing -- a new iPhone.

Rumours are rife that Apple iPhone is all set to get an update on June 9, the opening day of Apple's Worldwide Developers Conference. News sites and blogosphere are buzzing with speculation and anticipation about the second-generation iPhone. In fact, according to reports, Apple has been cutting down on manufacturing, as it readies a new model. Although, AT&T stores in US still have phones in stock, the supply has largely dried up in the Apple's retail outlets. Phone's current model has been out of stock at the company's online US and UK stores since early May. Here's looking into what all new the iPhone 2 will have in terms of looks and features. Also, why Apple needs to revamp its hot selling phon

A new look





The encore to the original iPhone, which launched nearly a year ago amid unprecedented industry buzz, is widely expected to be the main attraction when Chief Executive Steve Jobs takes the stage at Apple's developers' conference next Monday.

The new iPhone will be accompanied by support for corporate e-mail and a slate of new programs that could help boost sales of the devices, which sport a touch-sensitive screen, wireless Internet access and iPod-style media functions.

"The thing for Apple is to be able to leverage the iPhone for further innovation, or they run the risk of being the next (Motorola) RAZR, which was iconic in its own way, but for which innovation did not come fast enough," Shiv Bakhshi, director of mobility research for market research firm IDC.

Apple has declined to comment on what Jobs will announce, but analysts are betting he will show off a long-rumored phone running on a so-called 3G, or third-generation, network.

That would address one of the chief complaints about the current iPhone: the speed at which it calls up Web pages on AT&T Inc's pokey EDGE network.

That is a particularly important concern in Europe, which is ahead of the United States in building new networks and where sales of the iPhone have lagged.

"I see 3G as important for the U.S. but essential for overseas," analyst Avi Greengart of Current Analysis said of a faster iPhone.

"It will be appreciated by technology enthusiasts and anybody who wants to get fast Web browsing outside the hot spots."

A new iPhone may be a catalyst for Apple stock, which has risen 50 percent over the past three months, to a close of $186.10 on Monday. Investors have regained confidence that demand for the company's Macintosh computers and iPod media players is holding up amid fears the U.S. economy is headed for recession.

Thomas Weisel analyst Doug Reid raised his price target on Apple shares on Monday to $225 share from $195, citing strong demand for its laptops and sales of up to 16.5 million iPhones next year.

There is also speculation Apple could bow to a cellphone industry practice and offer a subsidized iPhone, an arrangement where AT&T could kick in a couple hundred dollars to make the devices more affordable. AT&T already gives Apple a slice of the monthly service fees it gets from iPhone subscribers.

"We think that actually Apple could talk about a very disruptive business model, or a change in their business model, embracing subsidies where necessary, multiple carriers to help get the iPhone into more hands," Lehman Brothers analyst Ben Reitzes told a conference call last week.

But more important than the actual hardware will be new services and programs that can tap the increased power.

Some reckon that will include the ability to download songs from iTunes using the cellular network. IPhone users now have to be connected to a Wi-Fi network to get music from Apple's online store.

Apple will also roll out its highly anticipated support for corporate e-mail, a capability it showed off earlier this year and that is expected to give iPhone a push into business, which now overwhelmingly use Research In Motion Ltd's Blackberry devices.

Apple will also launch its iPhone "applications store" that will sell programs made by developers outside of Apple. The service marks an about-face for Jobs, who initially blocked third-party software from the device.

"That's important for developers who can now build this out as a critical platform for Apple," said Michael Gartenberg, an analyst with Jupiter Research. "The potential here is sort of unlimited."