iPhone 3G Image Gallery Photo by Kim Kulish

Oh, Steve Jobs, how you torment me! You've been teasing me for months with rumors of the upcoming new iPhone. Now, at last, you announce the thing -- but I have to wait another month to buy it. Curse you, Steve!

Apple announced the long-awaited iPhone 3G on Monday, with 3G support for double the network speed of the first-generation iPhone. Apple also slashed pricing. The device starts at $199 for an 8 GB model, and $299 for 16 GB, compared with a starting price of $399 for first-generation iPhone a year ago.

The iPhone supports Wi-Fi, 3G and EDGE networks and will automatically switch between them for the fastest download speeds. Apple beefed up battery life for the iPhone. With the introduction of iPhone 2.0, the iPhone has native support for third-party applications for the first time.

The new iPhone and software will be available July 11. The software will be a free upgrade for existing iPhone customers, and $9.95 to users of the iPod Touch.

Enterprise users will like the added support for Microsoft Exchange, the ability to remotely wipe the iPhone memory (useful if the iPhone is lost or stolen) and remotely install applications to users. Also appealing to enterprise users: Native support for Microsoft Office applications.

The announcement had only two real surprises.

The first surprise is the price cut. The steep discounts were rumored prior to the announcement but never really confirmed. However, don't get too excited -- monthly service charges are increasing, meaning total cost of ownership for the iPhone 3G is actually greater than it is for the current iPhone.

The other surprise is the delayed availability. We didn't expect it today, we expected it June 18. We had an inside source who swore to that date. So much for inside sources.

Location Services: Game-Changer

"What is really going to be a game-changer, though, is the higher speed in combination with the GPS chip, which will open up a whole slew of location-aware apps (some of which we've already seen)," writes Erik Schonfeld on the blog TechCrunch. "That and all the new iPhone apps that will be built for it by outside developers."

TechCrunch is right. While GPS-enabled cell phones are nothing new, the iPhone will offer market penetration and an elegant user experience that competitors lack. The iPhone was the second-most popular phone in the US in the first quarter of 2008, with about 19% market share, second only to Research In Motion, which had 45% market share, according to IDC. And RIM also offers GPS.

Consider: When the iPhone ships, almost two-thirds of the smartphones sold in the US will have GPS, high-speed wireless networking, and support for third-party applications. Location-based applications will become standard on smartphones.

So what do you do with location-aware mobile applications?

Find your nearby friends who also have GPS-enabled smartphones. I expect we'll quickly see apps that are interoperable between different models of GPS-aware smartphones. You'll be able to look at your phone display and see where all your friends, family, and business associates are. Of course, they'll also be able to see where you are. The availability of ubiquitous GPS-enabled smartphones will open a new privacy debate, about peer-to-peer privacy, hiding your location from friends, family, and co-workers. I'm sure this man caught on Google Street View walking into an adult bookstore will be displeased by this development (see #4 on the list).