Rumors Swirl of 3G Apple iPhone

Speculation is rife that Apple's Steve Jobs, during a speech on Monday in San Francisco, will unveil a 3G version of the hot-selling iPhone

The rumour mill is dizzy with speculation about what 'cool new stuff' Apple's iPhone will shortly be sporting, ahead of CEO Steve Jobs' keynote at the annual Worldwide Developers Conference (WWDC) in San Francisco on Monday.

Rumoured tweaks include a front-facing camera for video calling, variations on form factor (fatter or, heck, thinner) and GPS capability. There have even been reports doing the rounds on the internet of Apple filing a patent for solar cells that could be installed under the screen, opening up the possibility of an iPhone part-powered by green energy in the future.

But as consultancy Analysys Mason associate Mark Heath says, Apple knows how to keep its iPhone secrets fresh 'til D-Day: "People talk about having GPS capability in there, perhaps a slightly changed device to make it more suitable, more robust for some users; it's all speculation at the moment so we'll just have to wait and see what it looks like."

One thing analysts and commentators are agreed on, however, is that a 3G device is coming.

Peter Cunningham, senior analyst at analyst house Canalys, told "I'd be very surprised if it wasn't the 3G iPhone."

But the analyst is also holding out for a little extra from Jobs: "Apple has got a track record of being very innovative and a habit of surprising people so I'm certainly expecting it to be more than just a 3G iPhone—I'm certainly expecting something a little bit special."

Many industry watchers—and Mac co-founder Steve Wozniak—expressed disappointment when Apple chose to launch its mobile gambit via a mere Edge device, rather than going straight to the mobile superhighway of 3G.

Already speaking as if the second coming of iPhone has occurred, Dr Windsor Holden, principal analyst at Juniper Research, told "One of the key drawbacks of the old iPhone was you had this wonderful device for accessing the mobile internet but the speed at which it could be accessed once you moved away from the cloud was very limited indeed.

"And now you have the UMTS capabilities within that device I think it's got quite enormous potential to do very, very well."

A 3G iPhone might even help improve the prospects of mobile TV in the short term, according to Analysys Mason's Heath, who points out that iPhone users have already been sideloading content and utilising wi-fi to watch video on their handsets.

"3G is absolutely critical to give that extra distribution channel [to stream video outdoors] and allow you to offer a compelling service. And this is way before broadcasting networks and things like DVB-H come along, so we think that the iPhone could have a significant impact in the mobile TV market in the short term," he says.

According to Holden, the clearest sign a 3G device is imminent comes from an announcement today by Japanese mobile operator Softbank that it has signed an iPhone distribution deal with Apple.

He explains: "That's probably the biggest indication yet we're going to see the 3G iPhone very, very shortly. There was just no opportunity at all for them to offer a 2G iPhone in Japan—given that 70-odd per cent of people in Japan have a 3G handset."

Shipping a 3G device therefore does more than just improve Apple's mobile hardware street cred—it opens doors to more markets worldwide. As Canalys' Cunningham points out: "Edge across the GSM networks or GSM operators is still pretty limited—predominantly it's 3G or HSPA networks now being rolled out now—so what 3G does it provides compatibility with a far greater range of operators."

Other sure-fire tweaks on the way for iPhone 2.0 are firmware updates Apple announced back in March when it said it would be licensing Microsoft's ActiveSync protocol.