(Agencies)
Updated: 2008-04-01 10:05

The much-awaited iPhone with 3G is coming in May, according to a report by the Bank of America. Both Apple and AT&T, its exclusive carrier partner in the US, have said a higher-speed version of the popular device is coming, but they haven't set a date. The BOA's research report was authored by analyst Scott Craig and cited Friday by the Reuters news service.

A man holds the Apple iPhone outside the Apple store on New York's 5th Avenue in this June 29, 2007 photo. [Agencies]

Three Million in May

Craig said that there will be "an initial small build in May," and "significant production" in June. Despite the report, AT&T and Apple declined comment. But June would be a good time for the release, as there is an iPhone developers' conference that month, as well as the release of new firmware.

Craig added that he expects production volume to be higher than earlier estimates, even his. He predicted the production run in May will be more than three million iPhones, with another eight million in the third quarter. Previously, he had projected eight million iPhones for all of 2008.

Michael Gartenberg, an analyst with JupiterResearch, said he expects Apple to refresh the iPhone sometime this year, but he doubted outsiders know exactly when that might be. "Apple keeps it own schedule," he noted.

A refresh of any sort could help Apple meet its target of selling 10 million iPhones by the end of this year. As of January, Apple has said it had sold about four million.

3G on the iPhone "would be a nice addition," Gartenberg said, but the real question is what Apple or third-party developers would do with the additional bandwidth that they haven't already done with, for instance, AT&T's EDGE.

Websites, Business Users, Europe

The faster cellular bandwidth could give users more reliable access to media-rich websites. It could also enable third-party developers to create applications that assume some consistent access to high-speed connections. Recently, Apple released the second beta version of its iPhone software developers kit, and a variety of developers are working on applications for the popular device.

One of those companies is Microsoft. Some observers have noted that extending its portfolio to the iPhone would be, in part, a defensive move for Microsoft, since it has been a leading provider of Mac-based applications, most notably Microsoft Office for Mac.

Microsoft's interest in application development is also related to Apple's plans to provide Microsoft Exchange support for the iPhone. If users send Microsoft Office documents as attachments, it's in Microsoft's interest to make sure everything works as it should. With 3G capability, the iPhone takes another step toward becoming a respectable tool for business users exchanging large file sizes.

Finally, 3G would make the iPhone more competitive in Europe and elsewhere, where 3G is more common than in the US.