With the world's geeks hanging on his every utterance, Steve Jobs, Apple's chief executive, announced details of the much anticipated 'next-generation iPhone' - which will be faster than the earlier version, and capable of satellite navigation.
Early adopters who bought the first device – a phone, web browser, and music and video player, rolled into one - when it went on sale in the UK seven months ago may also feel short-changed.
The new 8GB iPhone will cost $199 (£100) in the US – a third of what the equivalent device cost when it was launched in June last year – though this may be made up for by more expensive contracts with operators. A 16GB version will sell for $299.
Carphone Warehouse and O2 - the exclusive distributors of the device in the UK - said they would release details of price plans tomorrow.
Mr Jobs said that the new device would be available in 22 countries - including the UK - in a month, and 70 countries later in the year.
"The No 1 reason people didn't buy iPhones is because they just couldn't afford it," he told an audience of software developers in San Francisco.
Aside from being cheaper, the most significant improvement in 'iPhone mark II', is that it works on the high-speed 3G network, which will mean it can download content such as videos from the internet much more quickly.
Many gadget-lovers held off buying the previous version because its most innovative feature – a web browser which enables owners to zoom in and out on web pages by making pinching gestures on the screen - was impaired by slow networks.
The new phone also has GPS, which means it will be able to locate itself more accurately via satellite, and will offer more services tailored to the owner's location, such as the ability to find nearby restaurants and businesses.
The device has a more curved look, with thinner edges, and replaces the existing brushed metal back with black plastic. It also has better tools for synchronising work an owner's work e-mail and calendar, which has been the staple of its more entrenched rival, the BlackBerry.
Apple has come under increasing pressure to sell more iPhones, particularly in Europe, where 3G networks are more widespread than in the US and where demand for the slower version has been disappointing.
The iPhone was hailed as revolutionary when it went on sale in the UK in November, but in April O2 was forced to cut the price from £269 to £169, apparently because of mediocre sales. In Germany T-Mobile made an even more drastic cut from €399 euros to €99.
Sales have also been hampered by Apple's strategy, which has been to sell the device at full price to customers before they sign a contract. This has meant that the phone has cost significantly than handsets which are similarly advanced but subsidised by operators.
Apple's competitors, meanwhile, have also been ramping up their offerings for the summer, which will turn put greater pressure on iPhone to make an impact in Europe with its new device.
RIM has announced the latest version of the BlackBerry, the favoured tool of professional workers, which will also have speedier internet access and allow faster downloading.
HTC, the Taiwanese manufacturer, meanwhile, will release its new Diamond handset - another 3G handset which offers a similar, touchscreen browsing experience to the iPhone.
