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Canadians will finally be able to get their hands on an iPhone, just over a year after Apple Inc. launched its advanced smart phone. The popular touch screen phone officially arrives on July 11, even though it's estimated upward of 100,000 have already been brought into the country and unlocked.

Yet while Apple fans may cheer its arrival and the fact the latest generation will not only be more powerful but half the price of the first iPhone, the launch sets the stage for a summer showdown between Apple and BlackBerry maker Research In Motion Ltd., which is preparing its own 3G device – the BlackBerry Bold – for launch this year.

Steve Jobs, Apple's chief executive officer, said yesterday the new 3G iPhone will run on the fastest available wireless networks, allowing users to browse the Internet at speeds comparable to a WiFi connection, and will be half the price of existing models, with Apple dropping the price of the eight-gigabyte version to $199 (U.S.) from $399.

Analysts said that despite its faster Internet speeds and new software designed for businesses – including Microsoft Corp.'s Exchange push e-mail technology – the new iPhone will still have trouble eating into RIM's market share lead for corporate clients.

“Apple will continue to penetrate the small and medium business market much more heavily and aggressively than it has been able to do so previously with this Exchange integration, but as far as larger enterprise, we still see RIM as the standard,” said Mike Abramsky, an analyst with RBC Dominion Securities.

When Mr. Jobs first announced the iPhone at the Macworld Conference in January, 2007, he made specific references to RIM and how Apple's new device would eventually top its rival's BlackBerry devices.

Yesterday, however, when Mr. Jobs talked about the downloading speeds of the upgraded iPhone, he compared them to Nokia Corp.'s N95 and Palm Inc.'s Treo devices; there was no mention of the BlackBerry Bold.

Canaccord Adams analyst Peter Misek said there may be a reason for that. “The reality is that if you compare the new 3G iPhone download speeds to RIM's Bold, the Bold will be able to download a website like Marketwatch.com in under five seconds, whereas the 3G iPhone will take 21 seconds.

“With 3G, RIM is going to showcase just how its technology is so much better,” he said. “They [Apple] specifically avoided mentioning the BlackBerry Bold. … What [Mr. Jobs] has realized is that he hasn't dented RIM at all.”

Still, the iPhone faced five challenges in its first year on the market, Mr. Jobs said. Those included a lack of support for 3G networks, poor enterprise support, no support for third-party applications, a limited international footprint and a high price tag. When the devices made their debut in the United States on June 29 last year, the 8 GB model cost $599, however that price tag was slashed to $399 in the run-up to Christmas.

Slashing the price of the 3G iPhone from $399 to $199 is a big change for Apple at a time when more mainstream consumers are looking to upgrade from regular cellphones to smart phones, said Kaan Yigit, a consultant with Solutions Research Group in Toronto. “All of a sudden, they've turned the iPhone from a much-loved and admired device, but not owned by many, into a mass-appeal and attainable mainstream device,” he said.

Only about 12 per cent of Canadian cellphone owners are using smart phones, which means the growth potential for all companies selling Internet-enabled mobile devices is ready to explode, now that the devices are in their price range, he said.

“The headroom is just enormous, since every second phone that comes out of a retail store going forward will be a smart phone,” he said. “There's room for everybody.”

Canada is one of 22 countries that will receive the new iPhone on July 11 as Apple ramps up its international expansion to capture a bigger slice of the market for Internet-enabled cellphones. The iPhone is currently available in six countries – the United States, Britain, France, Germany, Ireland and Austria – but will reach 70 countries by the end of the year.

The new “3G” iPhone is thinner than its predecessor, incorporates GPS capabilities, and improves on the audio functions of the previous model.

Although Canadians have been unable to purchase the iPhone from Apple or other legal channels in Canada, that hasn't stopped some die-hard fans from scooping up illegal, unlocked devices. Some analysts say there are anywhere between 100,000 to 130,000 unlocked iPhones currently in use in Canada.

In April, Rogers Wireless Inc. announced it would be the exclusive Canadian carrier to offer the iPhone. Yesterday, Rogers said that the eight GB iPhone will cost $199 (Canadian) on a three-year plan while the 16 GB model will be priced at $299.

Analysts contacted by The Globe and Mail said users will probably spend $80 a month minimum, considerably more than the $72.39 average that Rogers cellphone customers currently pay, according to Solutions Research Group.