Last night Hong Kong time (10:00 US PST) Apple announced the next generation iPhone, the "iPhone 4", and renamed its OS from "iPhone OS" to "iOS 4", during Steve Jobs' keynote speech at their WWDC '10. During the keynote Jobs highlighted 8 of the new features in iPhone 4. These are:

  • FaceTime
  • Retina Display
  • Multitasking
  • HD Video Recording
  • iMovie for iPhone
  • iBooks
  • Gyroscope
  • 5-Megapixel Camera with LED Flash

Aside from these 8 features mentioned there are a few more that worth mentioning.

  • External antenna
  • Front facing camera
  • 7 hours of talk time on 3G

I will leave the summary of these features to Apple's excellent web pages for the iPhone, what I will do instead is explain how these features should or should not affect your purchasing decision of the iPhone 4.

Feature Benefits

Before we understand how these features should effect your purchasing decision, we should understand how these iPhone 4 features will benefit you.

FaceTime

This is simply video chat on the iPhone. Unfortunately, it currently works only between iPhone 4's and only if these iPhones are connected via WiFi to the Internet.

Fortunately, FaceTime is based on open standards: SIP, h.264, AAC, STUN, TURN, ICE, RTP and SRTP. Apple will submit FaceTime to the standards body to get it accepted as a standard, like they did with QuickTime for MPEG-4.

The important point to note here is the SIP standard used in FaceTime. This means that other SIP video chat service can potentially work with FaceTime. One such service is Gizmo5, now a Google property, but Google has yet to integrate it with Google Voice or shut the service down. One popular video chat/VoIP service that FaceTime will not work with is Skype, because Skype uses proprietary technology to establish connections between users.

Due to the current limitations of FaceTime, this feature should not have much value in your decisions to purchase an iPhone 4. Also in the near future, if you do not know anyone who has an iPhone 4 and is significant enough to want to video chat with, this definitely will be one feature you will not use.

The Camera

In the new iPhone 4 there are two. A 5-Megapixels camera with 5X digital zoom on the back with built-in LED flash, and a VGA quality front-facing camera on the front. Both of these cameras are capable of capturing still photos and videos up to 30 fps. The former is capable of also capturing HD videos at 720p.

You may notice these capabilities do not appear to be new for smartphones, and you will be right. Apple isn't always the first to implement a particular technology, but they usually do it better than most competitors. In the case of the 5-Megapixels back side camera, unlike other manufactures, Apple achieved this megapixels not by reducing the size of the pixel, therefore the captured image is a true 5-Megapixel image.

If you are the type that always like to have a high resolution camera with you this feature will be great. Or if you are a parent with a young child this will be perfect for those special moments you like to capture for prosperity.

Retina Display

This brand new LCD display technology has 4 times as many pixels compared to previous iPhone models, paceked inside the same 3.5" LED-backlit display, hence producing a display of 960 x 640 pixels display with 326 ppi pixel density.

Again Apple did not do what it's competitors have done, they invented a new way to fuse the LCD to the Multi-Touch screen, therefore removing any possibility of air leaking into the gap between the two layers. This produced an effect as if the pixels are painted directly on the glass surface, with a superb viewing angle. This display also has the same IPS technology used in the Apple LED Cinema displays and iPad, as a result the screen has a 800:1 contrast ratio, producing the darkest darks and whitest whites.

If you read a lot of documents or images this Retina display will be perfect for that. Almost like looking at real printed paper or glossy printed photos.

External Antennas

The iPhone 4 has strips of stainless steel which make up the edges surrounding the phone, aside from serving as structural rigidity and mount points for internal components, they are also part of the GSM/UMTS and Bluetooth/WiFi/GPS.

This new design produces a very thin phone and better reception compared to the previous iPhone models.

The iPhone 4 also has 802.11n WiFi support at 2.4 GHz only, but this will also improve the speed of WiFi connectivity when 802.11n access point is available. Although, due to the lack of 5 GHz support this will not improve the WiFi range of the iPhone 4.

Gyroscope

The iPhone 4 has a built in 3-axis gyroscope, along with the accelerometer it will provide a 6-axis motion sensing.

This addition sensor will help application developers produce even more imaginative applications. During the keynote game control was demonstrated using these 6-axis motion sensors, but I believe there will be many usage in the area of augment reality applications.

Last Friday Read Write Web reported that Google may release Google Goggles iPhone app. With the additional sensor it will greatly improve the accuracy and user interface of Google Goggle.

Conclusion

Now you have some ideas how these new features in the iPhone 4 can be use, I will begin to help you with the decision of choosing the right iPhone. What I will not do is get into the discussion of whether to get an iPhone. I will assume you have already made the decision to do so.

First I need to separate the readers into two groups: ones who already own a model of iPhone, and ones who do not own iPhones.

Do Not Yet Own an iPhone

Your decision right now should be whether to choose the new iPhone 4 or an iPhone 3GS.

This decision should not include the iPhone 3G; even if you can find a store that still carries it. Therefore, second handed iPhone 3G and first generation iPhone (aka. iPhone 2G), should also be avoided.

The main reason for this is because Apple has discontinued future OS supports for the iPhone 3G and iPhone 2G models. The last iOS that fully supports these iPhone models is iOS 3.1.3. So these models will not be able to take full advantage1 of the features and enhancements from iOS 4 onwards.

I will assume you are not the type that wants the latest greatest gadgets, since it took you over 3 years before you decide to purchase an iPhone. Also because doing so with any technology is an endless uphill battle. Having said that, I believe a new or used iPhone 3GS can be a good choice for you. Especially when Apple has lowererd its price.

You Already Own an iPhone

Among these users there are three types:

  • iPhone 2G (first generation iPhone) users: it is definitely time for you to upgrade to iPhone 4. You had waited 2 years and you had been missing many of the modern features of the iPhone. While your iPhone may still worth something in the 2nd hand market, you should sell your iPhone.

  • iPhone 3G users: like the iPhone 2G Apple has discontinued future OS support for this model, and you may have notice your iPhone is a bit slower than your friends using the iPhone 3GS. You may have correctly thought that the iPhone 3GS was a minor upgrade to your iPhone 3G. You did not care about the faster processor, better battery life and digital compass back then. This time the iPhone 4 will be a much better upgrade in the same three areas.

  • iPhone 3GS users: for you you may want to hold off on upgrading to the iPhone 4. Yes the new features may be nice, but will you be able to fully utilize it? Plus iOS 4 will give you many of the same features, which you can upgrade your iPhone 3GS to when it becomes available. So I will recommend you upgrade the iOS on your iPhone to iOS 4, use it for a while and see if the iPhone 4's additional features are worth the upgrade. Remember though, the longer you wait the less your iPhone 3GS will be worth in the 2nd hand market.

In the above analysis I mentioned the 2nd hand iPhone market. At the moment, the largest market for iPhones is mainland China, but the "officially" sold iPhones do not have WiFi support. Therefore, gray market iPhones from around Asia; particularly Hong Kong due to its officially fully unlocked versions, and 2nd hand iPhones are still in great demand. This should always be a consideration when you are planing to upgrade to a newer model of iPhone.

1 You can install iOS 4 onto the iPhone 3G but most of the features will not be available. Most evident will be the Multitask feature.