Apple's new iPhone 3G: Still not perfect, but really close...

Price: $199 for 8 GB or $299 for 16 GB. Requires two-year AT&T contract for U.S. customers. Unlimited 3G monthly data plans for consumers costs $30, on top of monthly voice plans that start at $40.

Faster and cheaper. Business-friendly. Access to third-party applications. GPS. Improved contacts search. Parental controls. Better sound. Still great browser, photo viewer and iPod. Visual voice mail.

Slow network when 3G or Wi-Fi are out of reach. Lacks video camera, voice calling, memory expansion slot, removable battery. Doesn't support Adobe Flash and some other Web video standards. Some older accessories won't charge device.

Extra, extra: iPhone 3G: The Sequel, is worth the wait.

It's cheaper, faster and a lot friendlier for business. Apple's blockbuster smartphone already had nifty features such as visual voicemail, a splendid built-in video iPod and the best mobile Web browser I've ever used. With GPS newly added to the mix, this handheld marvel has no equal among consumer-oriented smartphones.

I reach that verdict after having tested the new iPhone for more than two weeks.

The iPhone's successor arrives a full year after the mind-boggling hype and hysteria surrounding the first iteration's debut. Whatever your opinion of that first iPhone — and I've been a lot more positive than negative — its impact far outweighs the 6 million units that have been sold to date.

Apple's presence has re-energized the handheld computing category, practically begging smartphone rivals for a response: Witness the Samsung Instinct from Sprint, and LG's Voyager from Verizon.

In my first review, I wrote, "iPhone isn't perfect, or even the most ideal smartphone for every user."

The statement holds true with iPhone 3G, though frankly, the list of reasons the device doesn't make sense for a certain class of users is shrinking fast.

Start with buyers on a budget who might have loved an iPhone but couldn't afford one.

Apple has already announced that an 8-gigabyte iPhone 3G costs $199 with a two-year AT&T service contract, down from $599. A 16-GB model fetches $299.

Next are business customers. Many companies were hesitant to cozy up to iPhone for corporate e-mail and other services. They fretted about security.

But I've been using iPhone 3G to access my USA TODAY mail, calendar and contacts. Messages and calendar entries are "pushed" to the device, so they show up right away, just as they do on other computers. With your employer's blessing, set-up is a relative cinch.

Meanwhile, for all the hoopla involving AT&T's speedier, third-generation network, I couldn't access 3G in parts of my northern New Jersey neighborhood and elsewhere. When the fast network isn't available, the phone automatically reverts to the pokier and oft-maligned Edge network.

IPhone 3G still lacks a physical keyboard, too. You'll have to get comfortable with "tapping," "flicking," "pinching" and other finger-typing tricks with its virtual keyboard, which only appears on the screen as required — when you are entering a Web address, for instance, or typing a note.

With practice, I've gotten pretty good at it. A big challenge is learning to trust it as it makes predictive auto-corrections on the fly. But it's not for everybody.

Even the old phone gets a makeover with new iPhone 2.0 software. Among other features, it supplies layouts for several international keyboards. You can even use your finger to draw Chinese characters.

You can also more easily search through your address books when locating contacts to call or message. The phone now supports PowerPoint attachments; and you can move or delete multiple e-mail messages at once.

Another change (on older and newer iPhones): You no longer receive a pop-up offering to remove a downloaded movie after watching it, to free up space.

One thing that made the first iPhone so much fun was its motion sensor or "accelerometer," which orients the screen from landscape to portrait, as you admire photos or surf the Web.New cool stunt: You can switch from a basic calculator to a scientific one, by rotating the screen.

Those who bought the first iPhone had to activate the device on a PC or Mac in their home or office. That's when you received an AT&T phone number and chose your voice and text-messaging minutes.

The practice also cracks down on folks who want to "unlock" the iPhone so they can switch to another carrier.

You still sync up all your music, pictures and more through iTunes software back at your computer.

Apple's claims that 3G speeds are twice as fast as Edge were confirmed by my own download tests. It generally took 10 to 30 seconds to load popular websites through 3G, a lot zippier than when I accessed the sites on Edge. Oddly, parts of the pages sometimes showed up first on the older iPhone screen. But pages always finished loading on the 3G device first, often by a half minute or more. Wi-Fi, if available, is still the fastest method for downloads.

AT&T says its 3G network is now in 280 major metropolitan markets, with 350 planned by the end of the year. But as I discovered in my own greater New York City neighborhood, there are still holes in 3G coverage areas.

The physical size and shape of the new iPhone hasn't changed much. There's the same lovely 3 1/2-inch multi-touch display. The new device is a bit curvier on the back than the first one.

The metal backing of the initial device has been superseded by a sturdy glossy plastic. The phone feels perfectly comfortable in my palm. The ringer switch and other physical buttons are now metal. My test unit came in black, though Apple will be selling a white version, as well.

The design changes aren't merely aesthetic. They're a nod to iPhone's 10 internal wireless radios. Plastic, unlike metal, is impervious to radio waves, improving reception, Apple says.

The headphone jack is now flush so it can accommodate any standard (3.5-mm) headphone, a welcome development to those of us who needed a clumsy adapter to use our favorite non-Apple headphones.

You can use iPhone's internal microphone to talk if your own headphones don't have one. Just be sure to really snap in your headphones; otherwise, sound comes through the iPhone's own speakers, not the headphones.

By "triangulating" signals from Wi-Fi and cellphone towers, the iPhone could previously determine your general location. GPS adds live tracking and may deliver more precise results.

I was pretty impressed by the accuracy on the new device as I drove along in my car, searched for nearby pizza places, and requested directions.

IPhone remains a fabulous photo viewer. But Apple hasn't done much to improve its 2-megapixel camera. You still can't zoom, shoot video or use a flash. Taking pictures is a tad clumsy.

But the presence of GPS means pictures can be "geo-tagged" with the location in which they were taken. After syncing images with a computer, you might plot their location on a map. Geotagged pictures ought to work well with social-networking applications.

A nice new feature built into the iPhone 2.0 software lets you easily save a Web image to your phone or a picture that arrives via e-mail. You can use the image as the phone's "wallpaper" or sync it to your computer.

Apple has improved overall audio quality of the device. The speaker phone sounded better, as did music played directly through the phone's speaker.

Of course, it all still sounds better wearing headphones.

A new "restrictions" feature (found in Settings) means Mom and Dad can prevent the kids from downloading any applications, or from accessing the Safari Web browser, YouTube, or iTunes.

Turn on the YouTube restriction, for example, and the icon for the video site disappears from the iPhone home screen.

There's a new small, easy-to-travel-with power adapter. Apple says you'll get five hours of talk time on a 3G network, double on Edge, and up to 300 hours of standby.

You can turn off 3G to preserve the battery. I started receiving low battery warnings toward the end of a busy work day; I found myself charging the device overnight, the same as with the older iPhone.

But I couldn't juice up the latest device using my Bose SoundDock or Belkin car kit. Apple says there will be adapters to permit charging with certain older accessories.

Technical explanation: The new iPhone only supports USB circuitry, not another method known as FireWire.

As with its predecessor, iPhone 3G doesn't support popular Web browsing standards such as Adobe Flash, Windows Media Video or Java. And there's still no removable battery.

I'd have also loved Apple to add a slot for expandable memory. It did not.

While not everything on my wish list made it onto the new device, Apple has raised the bar with iPhone 3G. To which I offer an enthusiastic thumbs up.

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