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The new iPhone will run on third-generation wireless networks and includes satellite navigation capability, according to Apple CEO Steve Jobs. The new phones will go on sale on July 11th 2008 in 22 countries and regions, expanding to 70 by the end of the year.

"It's amazingly 'zippy'," said Jobs. The new iPhone, which looks similar to the old one but with glossy black or white plastic in place of a metal back cover, loads up internet pages 2.8 times faster than the original, he explained.

While the 8GB model is expected to retail at just over £100, the 16GB model will be available for a little over £150.

Jobs explained the new iPhone is targeted at the mass market, with wireless network companies no longer paying Apple part of the subscription fees they get from iPhone users, but will instead subsidise the devices up front to make them cheaper.

Tim Bajarin, head of consultancy group Creative Strategies believes the price and new features of the iPhone will have a resounding effect on the market. "It changes the game for all smart-phone makers," he said.