{Reason 3}
Apps for everyone: Because you don’t need 3G, or even 2G, to shop the App Store.

Just to be clear, the iPhone 2.0 firmware update, which includes the App Store, is free and available on all iPhones—you don’t need the new iPhone 3G. In fact, if you don’t want to be saddled with a monthly AT&T bill, you could buy an iPod touch, upgrade to the 2.0 firmware for $10 if needed, and hit up the App Store over Wi-Fi. An 8GB iPod touch is $299, just $100 more than a subsidized 8GB iPhone 3G, but after two years the iPhone will cost almost two grand in phone bills.

If you stick with the iPod touch, you’ll miss out on any apps that require the iPhone’s camera (the touch has none), but if you opt for the original iPhone 2G over the new iPhone 3G, the biggest hardware upgrade that’s missing is the GPS. But no real-time navigation applications that would rely on the GPS chip were announced in the first several days after the App Store launch. Apple could be planning its own, of course—“real-time route guidance” apps are forbidden by the SDK license agreement. Navigation services often charge monthly fees for access to updated maps and data, and the App Store is set up for one-time payments only.

Plus, the iPhone 3G uses A-GPS, rather than pure GPS to determine the phone’s location. For A-GPS to get a location lock, the unit needs signals from at least three satellites, which can be tricky if you’re indoors and/or surrounded by tall buildings. 
The iPhone 3G uses uses GPS satellites plus cell towers and Wi-Fi access points to determine your position. Since the original iPhone also uses cell towers and Wi-Fi hot spots to find your position (see “iFaux GPS Put to the Test,” Apr/08, p18), location-based recommendations and social-networking apps work pretty well on either phone.

One more note: If you performed a jailbreak on your iPhone 2G, don’t upgrade to the iPhone 2.0 firmware without first restoring your phone to its non-jailbroken state. We’ve got friendly directions online at www.maclife.com/article/how_to_restore_your_hacked_iphone.

{Reason 4}
Let Freedom Ring: Because the 2G iPhone is more easily jailbroken.

If you’re a card-carrying Libertarian, or you just feel that once you’ve purchased a gadget with your hard-earned cash, no one should be able to tell you what to do with it, you might think three times before stepping up to an iPhone 3G. The original 2G iPhone remains a known quantity when it comes to jailbreaking, not to mention the fact that if you want to remove your GSM SIM card and use the iPhone solely as a portable Internet device (or use a card from a service provider other than AT&T), you maintain those options. In the United States, iPhone 3G buyers are required to activate the phone in-store—or sign a binding contract requiring them to activate a new two-year service contract within 30 days. 

{Reason 5}
Who Needs Speed: Because in the age of Wi-Fi, 3G isn’t always necessary. 

Obviously, the 3G networking is the biggest new feature of the new iPhone—so big, in fact, it’s the No. 1 best reason to buy one. 3G Web access takes your iPhone from Net-connected smartphone to 3G Net-connected super-smartphone. But is it worth the added cost? Owners of the original iPhone—and new owners of hand-me-down iPhones—are able to keep their cheaper data plans, and for many users, that may be a better option.

iPhone 3G owners in 10 states will pay a premium for 3G data service they can’t even use.

Currently, AT&T touts 3G-network availability “in 280 leading metropolitan areas” and plans to reach 350 metros by the end of the year. Sounds good, unless you happen to live where there is no 3G service. Currently, that means that iPhone 3G owners in 10 states will be paying a $120 yearly premium for 3G data service that they can’t even use. Residents of Alaska, Iowa, Maine, Montana, Nebraska, New Hampshire, North Dakota, South Dakota, Vermont, and Wyoming—we’re talking about you. And states where 3G is available still have huge swaths where coverage isn’t built out yet. There’s a reason AT&T’s website won’t (easily) display a 3G-coverage map the same way it shows voice coverage: the 3G network is almost comically spotty.

Aside from network gaps, consider your average day. For a lot of people, that means going from home (where there’s Wi-Fi) to work (where there’s Wi-Fi), and back again. And even when you’re out and about, finding an open Wi-Fi network isn’t too difficult. If you’ve got Wi-Fi access nearly everywhere, how much time will you spend utilizing AT&T’s 3G network anyway?

GPS is Apple’s other big feature for the iPhone. But remember, reasonably good “faux-GPS” triangulation already exists in first-gen iPhones. Using cell tower and Wi-Fi network data, the old iPhone can already give you a pretty good idea of where you are. And then there’s the old stand-by: looking up at the street signs. Between the location services and Google Maps, you should be able to figure out where you’re going. You might not get pinged instantly when your friends show up at the bar around the corner, but you could always—gasp!—call them and find out where they are.  

AT&T Customers: Are you eligible to upgrade to iPhone 3G?

No one could accuse AT&T of being straightforward about its iPhone upgrade policy. If you already have a first-gen iPhone, you’re in the best position. Existing iPhone customers can buy an iPhone 3G at the fully subsidized $199/$299 price points—with a two-year service contract, of course. AT&T will also charge an $18 upgrade fee to existing iPhone customers. At that point, you can pass on your original iPhone to a friend or sell it on eBay. The original (non-3G) plans will remain in effect for first-gen iPhones.

If you’re an AT&T customer using anything other than an iPhone, things get a bit more complicated. Depending on the amount of time remaining on your original contract and your payment history, in addition to some other factors AT&T is keeping mum about, you might be eligible for an upgrade at $199/$299. Check your upgrade eligibility by logging in to your AT&T account and clicking on Check Upgrade Eligibility under Phone/Device.

If it turns out you aren’t eligible yet, AT&T will be happy to sell you an iPhone 3G…for $399 for the 8GB and $499 for the 16GB model. And if that offer doesn’t float your boat, you can always just bide your time for a few more months. By the time you qualify for an upgrade, there will be a newer 3G anyway.

And then there’s the “no contract” version of the iPhone 3G. AT&T has announced that the 8GB version will sell for $599, and the 16GB for $699. It’s not going to be an unlocked iPhone, so you’ll still need AT&T service, but even AT&T customers ineligible for an upgrade could buy an 8GB iPhone 3G for $399, then cancel their contract and pay the $175 early termination fee, making their total cost $574—$25 less than AT&T’s “full-fare” iPhone 3G.