"They can't sell it for the same price as the iPhone," said Gottheil. "The US$199 for the iPhone 3G is a subsidized price." Apple, said Gottheil, is getting at least US$400 for an iPhone 3G from its carrier partners.
In other announcements, Jobs demonstrated iTunes 8, the newest version of its iconic music player and online music mart, spending the most time showing off a new feature dubbed "Genius."
Similar to the community-based Pandora music recommendation service, Genius can create on-the-fly playlists based on songs it -- and users -- think go together, as well as make purchasing recommendations based on selected tunes. Its community aspect is opt-in -- users must explicitly enable the feature -- and anonymous, Jobs said.
Jobs briefly mentioned the expected iPhone 2.1 firmware update, saying that it would address "a lot of bugs," including dropped calls, poor battery performance and frequently-crashing applications bought from the App Store. Apple will issue the update Friday.
At the beginning of the hour-long event, Jobs even joked about a recent snafu by the Bloomberg financial news service, which accidently posted a revised obituary of Jobs on its wire service. "I just wanted to mention this," Jobs said, then stepped back while Mark Twain's famous line, "The reports of my death are greatly exaggerated" was displayed on the venue's screen.
Jobs' health has been a matter of concern by some Wall Street analysts, who after his last public appearance in June commented on his gaunt appearance and wondered if he was again ill. In August 2004, Jobs announced he had had surgery to remove a cancerous tumor in his pancreas. Apple officials explained his appearance earlier this year by saying he had been recovering from a "common bug" at the time.
Although Jobs still appeared thin today, he was energetic while on the stage.
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