It's hard to think of any other device that's enjoyed the level of exposure and hype that Apple found in the launch of the first iPhone. Who could forget it? Everyone got to be a gadget nerd for a day; even those completely disinterested in technology seemed to come down with iPhone fever. But the original device was still far from perfect: its limited capabilities (especially in the 3G department), high price of entry, and the small number of countries in which it was available kept many potential buyers sidelined. Until now -- or so Apple hopes.

The wireless industry is a notoriously tough nut to crack, and it's become pretty clear that the first iPhone wasn't about total domination so much as priming the market and making a good first impression with some very dissatisfied cellphone users. With the iPhone 3G, though, Apple's playing for keeps. Not only is this iPhone's Exchange enterprise support aiming straight for the heart of the business market, but the long-awaited 3rd party application support and App Store means it's no longer just a device, but a viable computing platform. And its 3G network compatibility finally makes the iPhone welcome the world over, especially after Cupertino decided to ditch its non-traditional carrier partnerships in favor of dropping the handset price dramatically. $200? We're still a little stunned.

So now that Apple finally stands poised for an all out war on cellphone-makers everywhere, will the iPhone 3G stand up to the competition -- and higher expectations than ever? Read on for our full review.

Update: Updated with more tests from our battery, MobileMe, and enterprise supplemental.




The hardware
No one will have any trouble recognizing the new device from its face -- it's essentially identical to the original iPhone. Thankfully, the bright, high quality, high resolution 480 x 320 3.5-inch display that's just so easy to love, hasn't been changed a bit. Unfortunately, it's still every bit as much a magnet for smudges and fingerprints -- in fact, even more so now that the rear of the device has dropped its chic matte aluminum in favor of black (or white, optional on the 16GB model) plastic. Hey, at least now it's more symmetrical.

The move to plastic seemed almost inevitable now that the iPhone has so many radios, frequencies, and antenna needs (GSM, EDGE, HSDPA, WiFi, Bluetooth, GPS), but while we do prefer the original aluminum, the plastic does feel pretty solid and not at all flimsy, which is more than we can say for a hell of a lot of handsets. There's no doubt about the fact that we'd have preferred a matte or soft-touch finish to the glossy plastic, but that's all a matter of taste.

The body of the phone is slightly thicker at its center than its predecessor, although the edges are tapered and thinner than before, which is always a good way to make a device feel smaller than it actually is. (Palm learned this a long time ago.) There are a couple downsides to the body shape, though: first, when you're tapping off-center on a hard, flat surface, the phone wobbles (but only a little, oh well).

Second, the new shape means you won't be using it in your original device's dock. This really wouldn't be all that bad if Apple included a dock with the 3G like they did with the first iPhone, but now they want you to buy that separately. Did we mention they're asking $30 for it? Way lame. That absurdly small power adapter kind of makes up for it, but only a little.

One thing Apple was keen to talk up is the vastly improved call quality of the iPhone 3G. Those in the know understand that 3G call quality is often better than regular GSM -- but it turns out Apple made a huge improvement on both sides. iPhone 3G calls made over 3G and GSM both sounded significantly better than calls made on the original iPhone. If you're upgrading your device iPhone you may not necessarily notice it, but on a side by side it was pretty obvious.

Of course, call quality most often depends on coverage, and coverage varies between 3G and GSM networks depending on where you are. 3G calling also requires more battery power. Where are we going with this? Well, despite many of the painstaking measures Apple's taken to preserve battery power, the iPhone 3G doesn't do any real time signal detection to help determine whether you currently have better 3G or GSM voice coverage. If you suspect you might get better coverage either on or off 3G, it's up to you to dig down through a few settings menus to flip the switch. Not a deal breaker by any means, but it'd make for a welcome fix.

Apple's numbers on the iPhone 3G's battery life peg it at 10 / 5 hours talk on GSM / 3G (respectively), 5 hours 3G data, 6 hours WiFi, 24 hours music and 7 hours video. Pretty much everything we've found in our testing jibes with Apple's claims, if not exceeds them. (Our early results testing video early on skewed low because we had mistakenly left on push and fetch data, which dropped the battery life by almost 25%. After re-testing, they're back up to spec.)

All our tests were conducted with 3G on, WiFi on (not connected), Bluetooth off, no data fetching enabled (unless specified otherwise). Media tested with stock headphones, medium volume, and medium screen brightness, auto-brightness disabled.

• Music (continuous playback, large library, occasionally turning on screen): 31h 23m
• Video (continuous playback, no push/fetch data): 7h 5m
• Video (continuous playback, with push and 15 minute fetch data): 5h 24m
• Daily data use (browsing, email, and GPS / maps): ~6h 30m

Those numbers definitely are not bad, but if you're anything like us and you kill time on your phone reading feeds and checking email like a fiend, by 3 or 4pm you'll likely be wondering if you'll even make it home with any power left -- especially if you leave on the 3G data. So be warned, because the kind of prolonged usage you used to get away with on the original iPhone probably isn't possible with the iPhone 3G. For some, this may be an issue. Others may never notice.

There have been a number of other fixes to better the device as well. For example, the phone now has two proximity sensors to better detect when it's held to your ear. We also found that while the camera was essentially identical, we were getting images that were ever so slightly sharper and crisper than the original iPhone on 1.1.4 (check it out below). Still, knowing that HTC's Touch Diamond -- which features a 3.2 megapixel sensor and mechanical autofocus -- could pack such a great camera in an even smaller form factor than the iPhone's left us pining for something a bit more than the same 2 megapixels from the first time around.


What we're probably the most excited about, though, is that two of our biggest hardware-related gripes from the original device have finally been addressed: first, the headphone jack is now flush, which means any standard (3.5mm) headphones will work in the iPhone without the need for an adapter. The new jack has a solid, confidence-inspiring feel that won't leave you worrying about damaging the device or your headphones. To this day we still have no clue why Apple pushed the jack in -- it was kind of funny hearing Steve pitch the flush jack as a feature at WWDC. It's the simple things, you know?

Second, the speaker volume has been jacked up significantly, giving your calls (or music) a much more workable volume level if you're not blessed with superhuman hearing. It's not the loudest speaker we've ever heard on a device, and unlike many Nokia Nseries phones, it's still mono. But it's definitely a step up compared to the first iPhone, which was not only quiet, but also seemed to distort at much lower volumes.


Speed and location
At the end of the day, it's the 3G data that's important enough to become part of the new iPhone's namesake. Speed testing the iPhone 3G hasn't been disappointing in the slightest. We've seen speeds between 300 - 500Kbps in the US (roughly equivalent of other HSDPA devices we've tested), and in networks abroad where the data rates are even faster, we've gotten consistent data rates of over 700-800Kbps. It's pretty clear the iPhone 3G isn't hitting hardware limits right now, so much of what you can prepare to see in terms of speed in the US will depend directly on reception with AT&T's network -- which doesn't have the most outstanding reputation, nor the broadest 3G rollout.

Interestingly, in one test, our iPhone 3G had worse reception on AT&T than a Nokia N78, yet managed speeds of over 100Kbps faster. So ultimately, where 3G coverage is decent, you should be seeing speeds that will no longer have you tearing your eyes out, as was so often the case with little mister sometimes-takes-minutes-to-load-a-small-page first-gen iPhone.

GPS acquisition has also been surprisingly fast for a cellphone. AGPS devices use traditional GPS receivers, but help speed up location acquisition and accuracy by using cellphone towers to triangulate. As far as we know, the iPhone 3G is the only device out right now that not only has AGPS, but takes advantage of Skyhook's proprietary WiFi-based location system, giving it a total of three ways to help find where you're at. We were able to acquire GPS in as little as a second or two, although depending on your location and reception, you might see that take longer. It's important to note, though, that the iPhone's was clearly intended to be a location-aware smartphone -- not a dedicated GPS device. There's a big difference.

That said, there's an enormous amount of interest by people hoping they can add one more to the pile of devices their iPhone has taken over for. It's pretty clear why people might want the iPhone 3G to replace their car's dedicated GPS nav, too. It's not just a location-aware device with a large, bright screen -- it's also connected (with service you're already paying for), thus able to get traffic updates, routing information, and so on. The Google Maps app doesn't provide turn by turn route guidance, though, so while it does provide directions, you can only use it as a stand-in -- and not as a full replacement -- for a proper GPS device. This problem might be solved later by some intrepid 3rd party developer (like, say, TomTom or Telenav), but there's been some confusion as to whether this might actually happen, and what Apple's official stance on GPS nav actually is. And even if this GPS software does eventually come out, the speaker on the iPhone 3G simply won't be loud enough to be heard over most road noise, so you'd also have to make use of a line-out. In other words, don't sell your GPS device just yet, okay?


The software
Anyone that's used the original iPhone knows what a delight the device can be to use -- except when using the old mail app -- but the hardware is only one part of that. An accurate capacitive touchscreen and well optimized mobile processors form the basis of that experience, but the iPhone continues to derives its real power in usability. The iPhone 3G and the second release of mobile OS X have given the device numerous useful new features while keeping in line with expectations that they not slow down the experience, nor overwhelm new or experienced users. So far, so good.

Easily the most significant addition to the iPhone 3G (as well as the original iPhone and iPod touch) is the App Store, which finally enables users to trick out their phone with whatever programs make it through Apple's rigorous developer screening and software testing process. We've got as many mixed feelings about that closed-but-open model as we do about many of the programs that launched with the device -- especially the AIM client, which we were most excited about, but that kind of flopped. (Disclosure: Engadget is owned by AOL / TimeWarner. Sorry gang!)

Although the App Store isn't open to any developer, it's worth noting that Apple's implementation wrests all control from its carrier partners, which typically expect 3rd party applications to be either side-loaded (i.e. more for the power user set), or simply want complete control of sales through their own walled garden. It's easy to argue that the App Store just trades one walled garden for another, but what the hell, we'll happily take Apple's over AT&T's.

The applications themselves vary in price, and are purchased after you've logged in with your iTunes account. (Yeah, you'll need one even if you're only downloading free programs.) Apps under 10MB download over the air, and are immediately deposited in your first available slot, where they can be moved (or removed) as you see fit. As new versions of the apps become available, the App Store notifies you of updates and manages the downloads. Yes, it's a new kind of walled garden, but the App Store is also a category-redefining experience. We've already heard a radically open version will be making its way to Android, and we hope it will eventually find its way to platforms like Windows Mobile and Symbian as well.

Another new addition is character recognition support for logographic-based languages, such as Traditional Chinese, as well as localized keyboards for nearly two dozen languages and markets worldwide. But the touchscreen keyboard can still be a major sticking point for some -- ourselves enthusiastically included -- and Apple hasn't given any more of its default programs (like SMS) the increased ease of typing that comes with using the keyboard in landscape mode. There's simply no question that in terms of efficiency, on an iPhone we're nowhere close to where we can get on a spacious (or even not so spacious) QWERTY keypad. To their credit, though, Apple's made a few tweaks over the last year that have made typing a little faster and easier (like letting you pre-type the next letter before your first finger has lifted). But the fact is this defining feature of the iPhone remains one of its biggest drawbacks.

After nearly a week of testing MobileMe, we still haven't really had a positive experience with it among our editorial team. One editor, who had fewer issues than anyone else, still had difficulty syncing his 1,300+ contacts. MobileMe would choke on sync and require disabling / re-enabling to keep that sync moving. Another problem we saw was that email deletes weren't synced to other devices, requiring the same message be deleted in multiple locations. In some cases, a deleted email that wasn't properly synced would actually repropagate to back out other devices. Nothing better than zombie email.

Another thing we (and a lot of people noticed) is that MobileMe on the desktop is faux-push -- it only gets updates every 15 minutes because it's actually pulling them, unlike the iPhone's proper push. (We're, like, totally sure someone's going to sue.) You can edit a certain .pref file (details here) to make it fetch every minute -- but fetching every minute isn't push, now is it? Apple has since acknowledged this issue (among others). We also noticed on the phone that if you have synced MobileMe calendars, your calendar subscriptions (like, say, shared iCal or Gcal or what have you) are disabled.

All in all, as of the time of this writing, our feeling is that MobileMe still feels like it's in beta -- when it's up -- and is generally falling way short of what was promised by Apple. We believe they're earnest when they say they're trying to get it all up and running to fulfill their commitments, but for the time being we think it's best to steer clear until they work out the kinks.

On the other hand, we found the Exchange support to be simple enough to set up and use that you may not have to bug your IT dude. Some hardcore enterprise users will miss the full Exchange suite, including synced notes and tasks, but the core functionality (email, calendar, contacts) work very well, and if you need to take your iPhone into the locked-down office, we tested and confirmed that it will play fine with your company's WPA Enterprise / 802.1x with PEAP network. But our biggest gripe with Exchange isn't small: the system is unable to let enterprise contacts and calendars coexist on the same device with personal contacts and calendars. (Personal and corp email get along just fine, though.)

When you turn on Exchange-synced contacts and calendars, you're notified that it's a one or the other kind of a situation, and your personal data will be removed from the phone. Though that data isn't purged from your host machine, of course, you do immediately lose the ability to change contact or calendar sync settings. This effectively means that your device can only serve as an enterprise device OR a personal device, but not both at once. Kind of defeats the purpose of convincing your boss to get you an iPhone in the first place, you know? Can't all our calendars and contact lists just play together on the same device? We think they can (and should).

Some other new and noteworthy features:

• As mentioned, Google Maps now shows a pinging blue locator that can track your movement. As of right now there's no way to convert this to KML or anything usable for geocaching.
• The camera will also now ask you permission to use GPS to geotag photos with your current location. Once you grant that permission, it will add the necessary standard EXIF data to your photos. Trés useful, but you can't refer back to those geotags to bring up a location in Google Maps.
• Side note: there's now an option to reset location notifications, if you accidentally granted permission to an app you don't want knowing where you are.
• The iPhone can now read PowerPoint, Pages, Numbers, and Keynote documents. It's still incapable of editing or creating new documents, however, and outside of sending yourself these files via email, there's no accessible file storage.
• You can now save images from the web to your camera roll by tapping and holding.
• The calculator goes into scientific mode when the device is tilted sideways.
• Entering passwords is a little easier -- the last character you entered is temporarily shown at the end of the string. Keeps things safe but makes sure you know if you mistyped.
• One of the very first things we ever requested the iPhone see fixed is finally fixed: calendar colors are now supported, meaning you can finally visually tell your appointments apart based on calendar.
• You can now control email, contact, and calendar fetching from system settings, giving you granular control over push and pull data on your various accounts.
• You can also enable parental controls if you got the device for your kids. Or you just want to curb temptation to constantly watch Charlie the Unicorn on YouTube or buy Lil Wayne tracks on the WiFi Store, weirdo.
• Screen captures can be taken by holding home, then pressing sleep. They're dropped in the camera roll.
• Doing a hard reset now fully purges the device's memory, thereby making it much more difficult to recover the kind of data you don't want someone else recovering. (More on that here.)

We'd also be remiss if we didn't namecheck a few of the things missing from the device, some likely to be inconveniences, others outright dealbreakers:

• Easily-replaceable battery -- especially being that 3G is much more demanding on battery power than EDGE data. We haven't popped the back off, but even if replacing the battery were as simple as unscrewing the two screws at the bottom (and it's not), that's still not what we'd call easily replaceable.
  
• Copy / paste. As if we even needed to mention this.
• MMS. Ditto.
• Expandable memory still isn't in the cards (har). 8 and 16GB capacities are very decent, but the ability to go further with microSDHC would be welcomed by many. As would be a 32GB model.
  
• A2DP (stereo Bluetooth). If this was an unlikely addition before, it's all but written off now. A2DP is a notorious battery hog on devices like cellphones, and the iPhone is already pushing the limits on power conservation and efficiency. It pains us to say it, but we just don't see A2DP happening any time soon.
• Push Gmail. Hey, if Helio can have it on the Ocean, and Samsung on the Instinct, why is Apple stuck with only push Yahoo mail?
• Service-independent device to machine wireless syncing. Exchange and MobileMe are nice, but even nicer would be a way to easily sync data directly to your machine without having to pay or have some kind of service.
• Tethered data. Hey, you're paying $30 a month for data (likely more if you're using it outside the US), your laptop should be able to use some of it too.
• No way to open a link in a new tab in mobile Safari. We also wish the browser was still a bit better about caching data, too -- it'd be nice not to have to do so many reloads when switching between tabs or moving back and forward through history.

And for the enterprise users in the audience, the shortlist of ActiveSync / Exchange bits that didn't make the cut:

• Folder management
• Opening links in email to documents stored on Sharepoint
• Task sync
• Setting an out of office autoreply
• Creating meeting invitations
• Flagging messages for followup

Wrap-up
If you're an avid Symbian, BlackBerry, or Windows Mobile / Exchange user, chances are you might think the iPhone 3G is Apple playing catch-up -- and you're not wrong. 3G, GPS, third party apps, enterprise messaging, these are all old hat. But even the would-be iPhone killers being churned out weekly haven't yet found a way to counter the iPhone's usability and seamless integration of service and software, desktop and mobile, and media and internet.

There are always things that could be improved, features to be added, fixes that should be applied -- but from first to second gen, from year one to year two, Apple has proven itself a relentless upstart in the mobile space, and is showing no signs of slowing down. All those new features give the iPhone even more appeal than ever, but the price is what really seals the deal.

For our money, you're going to have a hard time finding a better device for two hundred bucks -- or maybe even for any price. But that doesn't mean you ought to toss your original iPhone, either. With the release of iPhone 2.0, Apple's given early adopters every possible new feature for free, meaning the iPhone 3G's biggest roadblock to adoption in the US may be its still very worthy predecessor. But as Steve says, "If anybody is going to cannibalize us, I want it to be us." As for the rest of the world? Things are about to get interesting.

More iPhone 3G
iPhone 3G questions answered
The iPhone 3G international launch lineblog!





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