I expected that iPhone 3G service from AT&T would be more expensive compared to the original iPhone - $30 per month for data on top of voice service, a $10 increase), but the telco slipped in a poison profit pill by removing SMS text messaging from the plan.

Instead, you can pay $5 per month for 200 messages (the amount included in the original iPhone plan); $15 per month for 1500 messages, or $20 per month for unlimited messages. If you sign up for a FamilyTalk plan, your choices are either $30 per month for unlimited or $0.20 per message.

Well instead of paying money to send text messages you can do it with using AOL’s downloadable instant message client for iPhone 2.0, which is free. Just like the full-blown AOL IM system, you can add buddies that are the phone numbers of cell phones you want to send SMS to, and you establish a two-way conduit. The recipient still pays for SMS (if they have a fee) on their end, but if it’s another iPhone user, you could coordinate with them via SMS to use instant messaging instead.”

Apple Inc.’s new iPhone went on sale Friday to eager buyers worldwide, but there were problems getting the phones to work.

Kenny Pichardo, 24, was the first to buy an iPhone 3G at an AT&T store in the New York borough of Queens, but he said it took the store half an hour to get the phone working.

That boded badly for the approximately 70 people after him in line. Pichardo had camped out overnight to be first.

A spokesman for AT&T Inc., the exclusive carrier for the iPhone in the U.S., said there was a global problem with Apple Inc.’s iTunes software that prevented the phones from being fully activated in-store, as had been planned.

Instead, employees are telling buyers to go home and perform the last step by connecting their phones to their own computers, spokesman Michael Coe said.

Apple Inc’s latest iPhone will be more profitable than any other product in its popular iPod line of music players, despite a price tag that is half of the previous iPhone, according to a study.

Helped by lower component costs, margins for the new iPhone are expected to exceed the 50 percent level achieved by Apple’s most popular media players, according to a preliminary study by research firm iSuppli Corp, released late on Tuesday.

“Apple’s iPod and iPhone products typically are priced about 50 percent more than their (materials and manufacturing) costs,” iSuppli said. “With the new iPhone sold at a price of $199 and the estimated subsidy of $300, Apple will achieve an even higher … margin.

Wireless phone carriers are expected pay a subsidy of about $300 to Apple for each of the new iPhones, iSupply said.

ISupply estimates manufacturing costs for Apple’s new high-speed iPhone totaled $173, compared with $265 for the original iPhone, released one year ago for about $500 with no subsidy. After what it called “component price reductions,” the initial iPhone carried a cost of $226.

“At … $173, the new iPhone is significantly less expensive to produce than the first-generation product, despite major improvements in the product’s functionality and unique usability, due to the addition of 3G communications,” said Dr. Jagdish Rebello, principal analyst for iSuppli.

According to our sources at O2, Brits who want to buy a 3G iPhone are going to have to sign up to a contract before they can get their hands on one, wherever they buy it. This is seriously bad news for people eager to unlock their new iPhone, as you’re not going to be able to buy one for the discounted contract price and then unlock it.

If you don’t want to get tied to a contract you’ll have to choose the pay-as-you-go option, which hasn’t been priced yet but is likely to be more than a couple of hundred quid. Either way, unlockers are going to be stuck between a hard place and a rock. The choice is clear: sign up to a contract or splash some cash on a pay as you go handset.

It’s been a long, leak-filled wait, but Apple finally took the wraps off its 3G iPhone. Thinner edges, full plastic back, flush headphone jack, and the iPhone 2.0 firmware — Apple’s taking a lot of the criticisms to heart from the first time around. Obviously 3G is at the forefront, but they’re also making sure it’s available all over internationally, works with enterprises, runs 3rd party apps… and does it all for cheaper. Apple claims its 3G speeds trounce the competition, with pageloads 36% faster than the N95 and Treo 750 — and of course it completely trounces the old EDGE data speeds.

Battery life isn’t getting put out to pasture though, with 300 hours of standby, 8-10 hours of 2G talk, 5 hours of 3G talk, 7 hours of video and 24 hours of audio. GPS is also a go. Apple is using A-GPS, which supplements regular satellite GPS data with info from cellular towers for faster location. (WiFi data is also worked into the mix, which should give users a pretty solid lock on where the heck they are on this planet.) Unfortunately, as expected there’s no front-facing cam, and while its edges are thinner than before it’s still about a millimeter thicker at the center (12.3mm over 11.6mm before). Apple hopes to launch in 70 countries this year, with the black 8GB going for $199 and 16GB for $299 in black or white. (Both price points require a contract, of course.) Apple will be hitting the 22 biggest markets, including the US, on July 11th. More info after the break.

According to ZDNet.de, Intel Germany CEO Hannes Schwaderer confirmed that Apple would be using the Intel Atom processor in a future version of the iPhone. The new model will reportedly be a larger model with a larger display, correlating with circulating rumors about a mini-tablet (720×480) device rumored to be coming from Apple.

June has arrived and for Apple fans and investors that means just one thing — a new iPhone.

The encore to the original iPhone, which launched nearly a year ago amid unprecedented industry buzz, is widely expected to be the main attraction when Chief Executive Steve Jobs takes the stage at Apple’s developers’ conference next Monday.

The new iPhone will be accompanied by support for corporate e-mail and a slate of new programs that could help boost sales of the devices, which sport a touch-sensitive screen, wireless Internet access and iPod-style media functions.

“The thing for Apple is to be able to leverage the iPhone for further innovation, or they run the risk of being the next (Motorola) RAZR, which was iconic in its own way, but for which innovation did not come fast enough,” Shiv Bakhshi, director of mobility research for market research firm IDC.

A benchmark test for rich internet application (RIA) frameworks claims Apple’s OS X lags Microsoft’s Windows XP on Intel when rendering HTML, being just over half as fast.

Sean Christmann, an experience architect at user interface specialist EffectiveUI, released the GUIMark benchmark following concerns over the lack of a proper test to compare RIA frameworks and technologies such as Adobe Systems’ Flex and Flash, Java’s Swing, Microsoft’s Silverlight and good, old HTML.

EffectiveUI specializes in building RIAs and numbers eBay, Ford, Discovery Channel and United Airlines among its clients.

Christmann, an experienced user interface designer who led the development team for eBay’s Desktop, tested a range of RIA frameworks on an Intel-based MacBook Pro under Windows XP and Mac OS X 10.5 and found that XP consistently outperformed OS X.

A US hardware manufacturer is taking Apple and broadcasting corporation CBS to court over the Mighty Mouse name.

Man & Machine has, since 2004, sold its Mighty Mouse - a waterproof and chemical resistant optical mouse for medical, industrial and marine applications. The firm has filed suit in Maryland, US alleging that Apple’s Mighty Mouse, on sale in wired and wireless forms since 2005, infringes a trademark owned by M&M for use of the name Mighty Mouse.

Apple licensed the right to use the name Mighty Mouse from US broadcaster CBS, which owns the name through its rights to the 1940s cartoon show - Mighty Mouse.

So Apple is in the clear, right? Not so according to M&M, which argues that CBS has no right to license the cartoon show’s name to a computer mouse.

French wireless operator Orange said Friday it has signed a deal with Apple Inc. to sell its iPhone in the Middle East, Africa and several European countries.

France Telecom’s Orange said in a one-sentence statement that it will sell the handset in Austria, Belgium, the Dominican Republic, Egypt, Jordan, Poland, Portugal, Romania, Slovakia, Switzerland and African markets later this year.

France Telecom spokesman Bertrand Deronchaine said Orange will be the exclusive iPhone provider in Belgium and Romania, with co-exclusive or non-exclusive deals in other countries. He declined to offer more details about the arrangement.

Apple Inc. has scooped up Time Warner Inc.’s HBO to feed television shows to its online iTunes store, reeling in one of the last holdouts among major channels and agreeing to a rare pricing concession to land hit shows like “The Sopranos,” “Sex and the City” and “The Wire.”

The Cupertino, California-based company said HBO programming began appearing on iTunes Tuesday and the shows cost either $1.99 or $2.99 per episode, making HBO the only channel allowed to charge above the standard $1.99 for their episodes on iTunes.

Eddy Cue, Apple’s vice president of iTunes, said the higher prices for some of HBO’s shows - in particular “Deadwood,” “Rome” and “The Sopranos” - are still cheaper than buying the DVD sets of the full seasons of those shows, which translates into prices two or three times higher per episode.

Apple Inc. said Monday its online stores in the U.S. and U.K. are sold out of the iPhone, a sign supplies are being winnowed ahead of the launch of the device’s next generation featuring faster Internet surfing speeds.

The Cupertino-based company confirmed that the iPhone is out of stock online, but added that brick-and-mortar stores run by Apple and iPhone carriers including AT&T Inc. might still have units available. Apple has been known for clearing out its inventory of a certain product ahead of a major upgrade.