A year after Apple launched its iPhone in an attempt to take advantage of the very profitable cell phone industry, the company has unveiled an improved and cheaper version of the successful device.

iPhone 3G, as it will be called, will be able to work over the faster 3G-based wireless networks, allowing a quicker downloading of websites, especially those that are rich in graphic images. It will be twice as fast as its predecessor, which runs EDGE (Enhanced Data rates for GSM Evolution) technology to connect to the Internet.

The new generation iPhone was introduced by Apple CEO Steve Jobs during Apple’s yearly Worldwide Developers Conference keynote. iPhone 3G will sell for $199 (8GB model) and for $299 (16GB model). The price is $200 cheaper than the previous 8GB and 16GB iPhone models ($399 and $499 respectively).

Another major improvement to the new iPhone 3G is the addition of GPS (Global Positioning System) technology which will provide users to do real-time mapping capabilities, informing them of their exact location via satellite.

The new iPhone 3G will run an updated software version, iPhone 2.0, that will add significant functionality to the phone. Users will now be able to search for contacts by simply typing the name they are looking for. The software will also include a full iWork document support that let users view pages, numbers as well as Microsoft Office applications (Word, PowerPoint and Excel). Turning the iPhone into landscape mode will convert the Calculator into a scientific Calculator.

Complete list of iPhone 3G Applications:

The Mail application will now offer bulk delete and move capabilities. Mail users will also be able to save images from e-mails into their Photo Library.

iPhone 2.0 supports Microsoft Exchange ActiveSync, delivering push email, calendar, and contacts. And it gives mobile users secure access to corporate resources with Cisco IPSec VPN and wireless network services with WPA2 Enterprise and 802.1X authentication. Support for Microsoft Exchange ActiveSync and industry-standard corporate security standards allows IT professionals to seamlessly integrate iPhone into their corporate environments. [Apple Enterprise]

Updating to iPhone 2.0 software will be free for old iPhone users. iPod touch users will be able to update their software for $9.99.

Apple will start selling iPhone 3G on July 11^th in 22 countries including Canada, Germany, Japan, the U.K. and the U.S. By the end of the year Apple expects to be selling the iPhone in 70 countries.