From what we have seen, owners of the original iPhone will also be able to update their phones, though according to Engadget, some features like the advanced Bluetooth functionality and MMS will not work on the original iPhone because the hardware simply doesn't support it.

Overall, Apple will give developers access to over 1000 new APIs. Apple also announced that it sold 13.7 million iPhones in 2008, which is far more than the 10 million Apple itself had predicted.

New Homescreen

The new homescreen will be tightly integrated with the new universal search feature on the iPhone, which will allow you to search through your email, calendar, notes, and iPod library from one single interface. The new homescreen is basically Apple's iPhone version of Spotlight, as it allows you to find and start apps by searching for them.

Highlights

We detailed some of the most interesting additions to the new iPhone firmware below, but here is a summary of the highlights:

• copy and paste (just like Kevin Rose (and others) predicted)
• push notification
• P2P over Bluetooth
• MMS
• embeddable maps
• landscape mode for all Apple apps
• ability to send multiple photos
• tethering is supported by the phone, but carriers get to choose if they enable it
• no tablet

Copy and Paste

As usual, Apple kept some of the best things for last, but, as rumored, the iPhone will now get copy and paste functionality. Users simply have to double click a word, after which a dialog appears that allows you to cut, copy, or paste. A longer press will automatically mark a complete paragraph. If you paste in the wrong thing, you can simply shake the phone to undo your action.

MMS

Apple will also finally support MMS.

No Background Processes - But Push Notifcation is Finally Coming

In Apple's tests, background apps turned out to be a major battery drain, so Apple clearly decided against this. Using background processes, Apple argues that even just a standard IM client reduced the battery life by 80%, while the standby time of the phone only dropped by 23% with push notifications. There will be three types of notifications: badge, audio alerts, text alerts.

Apps that are already open will communicate directly with the third-party server, while closed apps will go through Apple's servers.

New and Better Apps: Calendar, Voice Memos, Stocks

The built-in Apple calendar app will now finally support the CalDAV standard. The stock tracker can now display relevant news stories right in the app, as well as new details like the highs and lows for the day.

Apple also introduced a new app which will record voice memos.

Subscriptions/In-App Purchasing

Besides the new APIs, the most exciting announcement for developers is surely that Apple will now give them the ability to sell subscriptions, extra game levels, and other add-ons from within their applications. Thanks to this, users will, for example, be able to buy a new Kindle book right from within the app, or new outfits for their Sims characters from within the game.

To us, this seems like a smart move, as it will create additional revenue streams for both Apple and the large contingent of iPhone developers.

Bluetooth P2P

Apple will also introduce peer to peer connectivity over Bluetooth, which will, for example, allow game developers to easily create multiplayer games.

At the same time, however, Apple will also allow other third party accessories to communicate directly with the phone. Lifescan, for example, one of the apps that Apple demoed during the announcement, is an app for diabetes patients that can get glucose readings from a medical device and then calculate the necessary insulin doses.

Maps and Directions

Another highlight of the new iPhone firmware is the new Public Maps API, which makes it easy for developers to embed maps into their apps. Maybe even more interesting, Apple will also now allow developers to create GPS-enabled apps that can do turn-by-turn navigation. For licensing reasons, however, Apple's own map application will not feature this function.

APIs

Apple will introduce a large number of APIs in this new release. Among these are APIs for accessing the iPod library from other applications, streaming audio and video, as well as voice chat and a battery API. One interesting feature of the streaming video feature (and presumably also of the streaming audio API), is that it will adjust the video quality according to the connection speed.

One of the first applications to make use of all of this is Meebo's new native iPhone application, which was demoed during the announcement.

Send Multiple Photos

One feature that was always missing from the iPhone oddly was the ability to email more than one photo at a time. In the new version of the firmware, this has finally been rectified.

We would like to thank our friends at VentureBeat and Engadget for their great live coverage of the announcement!