SHIFT: iPhone 2.0 — everything you need to know

My friend Seiji compared his initial reaction to his iPhone to having a new girlfriend — he couldn't keep his hands off of it. But in the first flush of any rose-colored relationship, we tend to overlook our paramour's flaws. He snorts when he laughs. She doesn't get Monty Python. He won't let you tie him up. As time scrubs the blush off the rose, these flaws magnify. In the case of a human relationship, you have three choices: accept your partner for all his (or her) flaws, dump him, or try to convince him you'll immediately cease whipping upon hearing the safe word.

Fortunately, in the tech world, there's a fourth choice: upgrade. In the case of the iPhone, all evidence points to that choice becoming a reality soon. The new, spiffy iPhone is sure to offer plenty of new features to make you fall in love all over again. To find out what kind of sexy curves iPhone 2.0 will throw at us, follow the Continue link.

Before we get to the what, here's the when. Steve Jobs will address a sold out Apple Worldwide Developers Conference on Monday, June 9, at 10 a.m., at the Moscone Center in San Francisco, focusing on the next generations of the Mac Leopard OS (v10.5.3) and the iPhone software 2.0. Expect Jobs to then reveal the 3G iPhone.

AT&T sent a memo to its employees denying vacations between June 15 and July 12 to enable full staffing for an "exciting Summer Promotional Launch." AT&T employees got a similar memo last year prior to the original launch on the last Friday in June, the 29th. The last Friday in June this year is the 27th, so…

But, there have been reports that the 3G iPhone would be available in Spain on June 18. It's hard to believe Spanish consumers will get the 3G iPhone before the U.S., so perhaps 3G Day will be even sooner.

What It Will Have
First, an 3G HSPA network connection — 7.2Mbps speed, which is roughly twice as fast as EV-DO and around 10 times the top speed of EDGE, which is what the current iPhone rides on. AT&T's 7.2Mbps HSPA network is available in 270 markets, and should be in 350 by the end of the year. Plus, AT&T has announced plans to nearly triple its HSPA network speed next year.

Next, we get iPhone software 2.0. Other cellphones enable some third-party application downloads, but none will compare to the flood of inventive applications being cooked up even as we blog. Once downloaded, you'll be able to add a direct access icon on iPhone's home screen. We could see hundreds of third party apps by Christmas, all vetted by Apple and all listed on and accessible from Apple's Web site (as opposed to the unofficial stuff for hacked iPhones that's been circulating since last summer).

What It Might Have
This is all we know for sure. What follows is a collection of what I consider to be the most reliable Web rumors. As such, each should be taken with a boulder of salt. As such, mentally put the word "reportedly" after every "will."
  • Switchable 3G: That fast Net connection will most certainly tax the new iPhone's battery. To save watts, a settings toggle will enable you to turn off 3G access, a feature we've never seen in any 3G phone from any carrier (OK, there have been enough comments correcting us on this that we give in completely — the feature clearly exists on certain cellphones, ones we sadly have never had an opportunity to play with).
  • Thinner, Lighter: iPhone 2.0 will chuck its sturdy aluminum-magnesium shell for a lighter plastic enclosure. This will reduce iPhone's heft by as much as two ounces from its current 4.8-ounce weight. The new enclosure could further flatten the new iPhone by 2.5mm. Lighter is good, but plastic could make the iPhone feel cheap and more breakable.
  • HSPA iTunes Downloads: Apple is talking to major labels about allowing consumers to download tracks using the AT&T network rather than limiting iTunes access to Wi-Fi, but the labels want more money per track.
  • Real GPS: This would supplement the network-assisted location software iPhone currently uses. This would allow third-party development of voice-assisted turn-by-turn directions.
  • Normal, Non-recessed Headphone Jack: 'Nuff said.
  • Contact Search, iCal Invite Folder: Both of these will be part of improvements in iPhone's Address Book and iCal compatibility.
  • Background Application Support: Third-party apps will run in the background, although it's hard to say how this will manifest itself since we don't know what cool apps may be coming.
  • Web Image Save: You'll be able to save Web images from Safari to iPhone's photo album.

What It Probably Won't Have
What we'd like but haven't heard about is improvements to the iPhone keyboard, the one factor that keeps heavy e-mail users and texters away. What we'd like is a horizontal keypad for e-mail and text mode — in fact, while we're on it, I'd like to be able to read e-mail widescreen — and haptic feedback (where you feel a slight vibration when you touch a screen). Apple is reportedly in discussions with a company called Immersion for vibration response, but it's unlikely to appear in the upcoming model.

What It Will Cost, Hold
As to the most important data: price and memory. Fortune Magazine reported pricing on the 3G iPhones would be $399 and $499 with a $200 subsidy offered only through AT&T stores, which means you'll be able to get an iPhone for $199 with a two-year deal. As to capacity, Fortune reported 8GB and 16GB models, same as the current iPhone. We're of course hoping the rumors of 16GB and 32GB models are true.

Update: What It Will Look Like
A number of pictures and renderings supposedly depicting the new iPhone have emerged in recent weeks. In the gallery below, we've collected the most prominent ones we've seen. Images are from Engadget, Pocket Lint, Apple Insider (and again) and iClarified. I leave it to you to decide which ones, if any, are real.

Why Do We Care So Much?
While expending all this rumor-collecting energy, a rhetorical question floated into my frontal lobe: Why am I and the rest of the blogosphere so excited about this next-gen iPhone? There are a lot of exciting post-iPhone phones — the LG Voyager, the Samsung Instinct, the HTC Touch Diamond, the BlackBerry Bold, for instance — many of which out-iPhone the iPhone in terms of capabilities. What is it about this particular phone that sends chills up and down my spine?

My time and space, however, are up for this month. I leave it to you to answer that question. The comment field awaits below.