There’s a theory favored by savvy Apple watchers that the first generation iPhone — greeted with such hoopla last year — was not actually the real thing.

That iPhone – the one that hundreds of thousands of Americans queued up to buy for up to $599 apiece, the one that Time magazine named the Invention of the Year, the one that six million people purchased before Apple finally stopped making them in May – was just a trial balloon floated by Steve Jobs to test the airwaves.

According to this theory, the real iPhone – the one aimed at the broadest possible market here and abroad — would start at $199, the magic price point at which consumer electronics devices seem to take off and become mass market phenomena. It would have built-in GPS location tracking, “push” e-mail, and wireless syncing with corporate enterprise networks. Most important, it would run hundreds of third-party applications available through an online App Store and operate over so-called third generation (3G) cellular networks that are two to five times faster than the one used by that first, prototype iPhone.

If this theory is true, then the real iPhone era begins on Friday, July 11, at 8:00 a.m.

That’s when the iPhone 3G goes on sale at Apple (AAPL) and AT&T (T) outlets in the United States and at the stores of Apple’s cellular partners in some 20 other countries around the world. (Strictly speaking, the era begins early Thursday, when the device goes on sale at 12:01 a.m. New Zealand time. Given how the Earth turns, that corresponds to 8:00 a.m. July 10 at Apple’s New York City flagship store and 5:01 a.m. at its Cupertino headquarters.)

Some things about the new iPhone haven’t changed. Physically, it’s almost identical to the first. Same touch screen, same dimensions — except for the back, which is slightly bulgier and made of black plastic instead of metal.

Conceptually, it’s still one device that combines three of today’s most popular technologies — cellular communications, portable digital music and wireless access to e-mail and the World Wide Web.

And the fundamental breakthrough is the same: unlike most devices that combine several functions and do none of them well, the iPhone puts together three must-have functions and does at least two of them better than they have ever been done before.

Early reviews suggest that the one thing the first iPhone was not particularly good at — telephony — is much improved in the second version, thanks to a redesigned audio system and, perhaps, improvements in AT&T’s network.

There’s still no physical keyboard, so devotees of RIM’s (RIMM) BlackBerry who were turned off by the lack of tactile feedback when dialing or texting on the first iPhone are not likely to be turned on by the second. The battery is still not user-replaceable, a shortcoming that may be even more important this time given the power demands of operating at 3G speeds. (One early reviewer who was getting nine hours of Internet use on the first iPhone clocked less than six hours on the second. See here.)

The built-in camera is the same under-2 megapixel device that can’t do video. There’s still no way to cut and paste text. And you are still married to AT&T’s cellular network for the life of a two-year contract, at least in the United States. In fact, the bonds of that matrimony may be even stronger this time around, given the way AT&T has set up the in-store activation procedure, and will cost U.S. customers at least $10 a month more.

There are many small improvements. You can search address books, delete e-mails en masse, set parental controls and save e-mailed photos. (These improvements will also be available to owners of the original iPhone as part of a free software upgrade.)

Investors will note that Apple has made major changes in its business model. Rather than testing the waters with a handful of exclusive contracts — first with AT&T, then with O2 (TEF) in England, T-Mobile (DT) in Germany and Orange (FTE) in France — Apple has gone global this time, with deals in six of the seven continents and more than 70 countries. To do this, however, it has had to largely abandon the arrangement — unique among cell phone manufacturers — by which carriers sold the iPhone for full price and kicked back a share of their monthly revenue to Apple, which was accounted for in monthly increments over the life of a cell phone contract (usually 24 months).

Steve Jobs was able to dictate these terms — quite advantageous to Apple — because the carriers recognized that being first to sell the iPhone would win them thousands of new customers. In most of the new markets Apple is entering this year, it is acting more like a conventional cellphone manufacturer, taking its (sizeable) profits upfront and letting the carriers subsidize the device with voice and data plans as costly as local market conditions will allow. (See Canada’s Rogers Communications (RCI), here for example, to see what kinds of problems this can lead to.) The price of the iPhone itself also varies widely, from as much as $888 for pre-paid phones in Italy to $75 in Mexico and free with certain data plans in the U.K.

Except for those costs, none of this affects the experience of the users.

For them, what will really distinguish this iPhone from the one that preceded it — and from every other smartphone out there — is the flood of software expected to be unleashed when the App Store opens on Friday. Apple has already demonstrated more than a dozen third-party programs for the iPhone, and over the next few months you can expect to hear about hundreds more: business apps that take advantage of the iPhones ability to “push” data down the network when it’s available (rather than when it’s requested); games that use the device’s accelerometer to navigate virtual space; shopping and social networking programs that use satellite tracking to tell you what shops or restaurants and which of your friends (or enemies) are near the spot where you are, right now.

In the end, every successful computing device is ultimately a software “platform,” a vehicle for the programs that give it its true value. This is where the real iPhone will stand out, and judging from the interest among the 4,000 third-party developers who have already signed up to write for it, it’s got a good headstart.

Even as Canada’s Rogers Communications and Germany’s T-Mobile compete to offer the worst voice and data plans for the iPhone 3G, Hutchison Global Communications on Monday unveiled what may be the best.

Hutchison (HTX), which stuck a deal with Apple (AAPL) in May to bring the iPhone to Hong Kong and Macau, will be offering customers a choice of two pricing plans:

• 8GB iPhone for HK$2,938 ($377) plus HK$188 per month ($24/month) for 500MB voice and data
• 8GB iPhone for free plus HK$498 per month ($64/month) for 2,200 minutes airtime and unlimited data.

“We believe the (minimum price) plan is comfortable enough for average data users,” a Hutchison spokesperson told the Dow Jones Newswire, adding that 500 megabytes will allow users to send 250,000 emails or browse Apple’s Web site 2,000 times. (link)

Bottom line in U.S. dollars: Including the cost of the phone, Hong Kong residents will pay between $955 and $1,532 over the life of a 24 month contract.

Some comparisons (all expressed in U.S. dollars for the equivalent of a 2-year contract):

• Hutchison in Hong Kong: $955 (500MB voice and data) to $1,532 (2,200 min., unlimited data)
• O2 (TEF) in the U.K.: $1,698 (75 minutes, unlimited data) to $3,588 (3000 min., unlimited data)
• AT&T (T) in the U.S.: $1,879 (450 min., unlimited data) to $3,318 (unlimited voice and data)
• T-Mobile (DT) in Germany: $1,366 (500MB data) to $3,374 (5GB data)
• Rogers (RCI) in Canada: $1,624 (150 min., 400 MB data) to $2,932 (800 min., 2GB data)

Last week, Steve Jobs announced that in “almost every one” of the 22 countries selling the iPhone 3G on July 11, the maximum price in would be $199 for the 8G model.

AT&T (T) went with the maximum. Some of Apple’s (AAPL) international partners are going with the minimum or close to it.

O2 (TEF), which carries the phone in the U.K., announced last week that the iPhone would be free for customers who sign up for one of its higher monthly tariff plans.

And on Monday, T-Mobile (DT) said that it is doing something similar in Germany, selling the iPhone for 1 euro to customers who select its highest monthly plan.

All three carriers are subsidizing the phone, of course, planning to take back in monthly fees more than they give away at point of purchase. In T-Mobile’s case, it turns out, a good deal more.

The chart below shows how much customers who buy the 8GB model end up paying at the end of a two-year contract for unlimited data in the U.S., U.K. and Germany. We’ve used the minimum tariff that yields the maximum subsidy in each country and converted everything into dollars. And we’ve chosen a two-year period in the U.K., although O2 offers an 18-month contract as well. (E-mail subscribes, click here.)

It should come as no surprise that these European carriers know what they are doing. T-Mobile’s 1 euro iPhone may look cheap compared with AT&T’s $199, but by the end of their contract, its customers have paid nearly 74% more.

O2’s free iPhone, by comparison, is a relative bargain; after two years, it’s only 12% more expensive than AT&T’s.

Hard on the heels of a 75% price cut in Germany and 100 pounds (37%) off in the U.K. comes a report out of Paris that two high-level executives at Orange, the iPhone’s wireless carrier in France, have flown to Cupertino to figure out what to do about the excess inventory piling up on their shelves.

Under a headline that reads “L’échec de l’iPhone pousse Orange et Apple à renégocier” (”The iPhone’s failure forces Orange and Apple to renegotiate”), Les Echos reports that Orange executive director Louis-Pierre Wenes and marketing director Alice Holzman met with Apple COO Tim Cook earlier this week to hammer out a deal that could lead to a French price cut in the next few weeks.

The sticking point in the negotiations, according to Les Echos: Apple wants Orange to subsidize the cost of the device, as it does all its other models; Orange wants Apple, in return, to sharply reduce or drop entirely the cut it demands of each sale.

The meeting was the latest attempt to sort out the trans-Atlantic inventory imbalance has developed in advance of the second-generation iPhone (or iPhones), now widely expected to arrive in June. While the first-generation continues to sell briskly in the U.S. and has been in short supply in Apple stores for several weeks, European sales are reported to have slowed significantly in advance of the so-called 3G model.

On Friday, the London Times quoted Kathryn Huberty, an Apple (AAPL) specialist at Morgan Stanley, saying that the European carriers had become over-excited by iPhone hype last June, ordered too many, and are now facing “significant” losses on unsold stock.

Apple sold 3.71 million iPhones in the U.S. last year. According to Strategic Analytics, its European partners sold 350,000 through December, considerably less than the 500,000 to 600,000 they had hoped to sell, and only 300,000 in the first quarter of 2008.

Why Apple can’t just re-balance its inventory by redirecting Europe’s unsold iPhones to Apple stores in the U.S. that could use them is a mystery that has even Apple analysts scratching their heads.

“It remains puzzling that iPhone availability has been very scarce in Apple’s US stores, yet seemingly plentiful everywhere else,” Stanford Bernstein’s Toni Sacconaghi wrote earlier this month. “One explanation might be that because iPhone’s supply shortage came at quarter’s end, Apple chose to ship most of its iPhones to the channel, where units would be recognized as sold during the quarter, rather than re-building inventory in its US stores.” (see here)

Is he right? Is Apple manipulating its shipments to dress up its Q2 report? We’ll likely find out on Wednesday, when Apple reports its quarterly earnings and releases numbers on its domestic and overseas iPhone sales.

Catching up on late week Apple (AAPL) news…

Beatles on iTunes in 2008. We’ve heard stories like it before, but this one has a twist. The London Evening Standard reported Saturday that Paul McCartney, who is said to be worth more than $1.65 billion, will begin releasing the Beatles catalog on iTunes in the coming months to help defray the $40 to $60 million it may cost him to get out of his four-year marriage to Heather Mills. A final divorce hearing is set for March 17. But the Standard goes on to say that Mills could could argue that the deal, said to be worth an estimated $400 million, should be included in her settlement. So Sir Paul is going to release a 40-year-old catalog to raise money to pay a settlement that gets bigger as a result of the sale? (link)

iPhone Software Roadmap video. For those who couldn’t make it to Cupertino for the March 6 event, Apple has made the entire presentation — all 1 hour and 18 minutes — available in Quicktime and HD. See Steve Jobs present U.S. smartphone market shares in a pie chart tilted to make the iPhone’s slice look bigger. See Phil Schiller demo push e-mail and remote wipe. Watch EA’s Travis Boatman play a preliminary iPhone version of Will (The Sims) Wright’s Spore. (link)

iPlayer on iPhone. As promised (after getting pressured by Mac fans), the BBC has introduced an iPhone and iPod touch version of its iPlayer, which makes BBC shows available for download over the Internet. (link) It’s still in beta and is only for British residents and for programs within seven days of broadcast. As Saul Hansel points out in Bits, the Beeb got around the fact that the iPhone doesn’t support Flash by reformatting its video into the QuickTime version of H.264 — which is what Google does to put YouTube videos on the device.

End-of-year sales figures for Apple’s (AAPL) iPhone in Europe are trickling in, but not in any form that can be definitively pieced together.

That latest news comes from Germany, where the head of Deutsche Telekom’s T-Mobile division said in an online interview Saturday that it had signed on 70,000 customers in the 11 weeks since the device went on sale. (link)

What’s not clear is whether that number represents iPhone sales or iPhone activations — an important distinction in T-Mobile’s case because for 2 of those 11 weeks it was required by court order to sell unlocked iPhones. Despite the stiff 999 euro ($1,460) price tag it set for unlocked iPhones, the company reported at the time that “many sold.” Assuming those buyers activated their iPhones with other carriers, they cannot be counted as T-Mobile customers.

France Telecom’s Orange division, meanwhile, reported in early January that it sold 70,000 iPhones in just four weeks. But Orange did say how many iPhones it had activated — sure to be less than 70,000 because Orange was required by French law to sell unlocked iPhones during the entire period.

O2, the exclusive carrier of the iPhone in the U.K., hasn’t issued any sales figures yet, but the Financial Times, citing unnamed “people familiar with the situation,” claims sales in the first 8 weeks came in at 190,000. (link)

Four weeks, 8 weeks, 11 weeks. Activated, sold. Locked, unlocked. There’s no logical way to sort those number out.

But that hasn’t stopped U.S. analysts. When trying last week to unravel the discrepancy between Apple’s iPhone sales (3.7 million in 2007) and AT&T’s activations (less than 2 million), Bernstein’s Toni Sacconaghi and Piper Jaffray’s Gene Munster both seem to have toted up those numbers, added a fudge factor, and come up with 350,000. (See The case of the missing iPhones.)

Is 350,000 good or bad? It’s hard to tell. O2 said it was “happy” with its sales figures, although they seem to have come in below O2’s initial target of 200,000 units. Similarly, France Telecom said its 70,000 sales were well within its target range of 50,000 to 100,000, although as Wired points out, CEO Didier Lombard told Europe 1 radio he hoped to sell 100,000 iPhones before the end of the year, not 50,000 to 100,000. (link)

Deutsche Telekom, perhaps wisely, doesn’t seem to have issued any public sales target. What Philipp Humm, head of T-Mobile Germany, did say in that online interview yesterday, according to Reuters, is that “the iPhone is by far the most sold multimedia device in T-Mobile’s portfolio.”

That I believe.

Employees at Carphone Warehouse, the U.K.’s largest cellphone retailer and the main distributor of Apple’s (AAPL) iPhone in Britain, have been caught trying to mislead customers about what is and isn’t covered by the purchase agreement, according to the BBC.

Responding to viewer complaints, undercover researchers from BBC One’s Watchdog unit visited five Carphone Warehouse stores. In three out of the five, a salesperson told BBC staffers posing as customers that if they lost their iPhone, they would have to buy both a new phone and a new 18-month contract at a minimum cost of 630 pounds ($1,300 at today’s exchange rate).

That’s not true. Customers who lose an uninsured iPhone have to buy a replacement, but can still use their existing contract. Apparently the salespeople were trying to convince customers to buy coverage they did not need from the store’s own insurance policy.

In a fourth Carphone Warehouse store, BBC One was told that the iPhone insurance policy offered by O2, Apple’s other U.K. partner, provided less coverage than theirs. That was also untrue.

The story is reminiscent of some of the problems that surfaced when Apple partnered with AT&T (T) to sell the iPhone in the U.S. Shortly after the iPhone was introduced — and when the devices were still in stort supply — several AT&T stores reportedly wouldn’t let customers buy an iPhone unless they also bought a bundle of AT&T accessories. See Gizmodo’s report here.

A spokesperson for Carphone Warehouse acknowledged to the BBC that there could be “some element of confusion among an isolated number of sales consultants,” but added that the company did not believe the small number of complaints were a “fair reflection” of the experience of thousands of iPhone customers.

The BBC report points out that Carphone Warehouse was fined 245,000 pounds ($500,000) last year for breaking British rules about selling insurance.

Is O2’s network to blame, or Apple’s (AAPL) iPhone?

That’s the question posed by more than a few British iPhone owners who purchased the device in the past two weeks and have been struggling ever since to get decent telephone reception on it.

The problem surfaced two days after the phone went on sale in the U.K. when “Matlock” in Derbyshire started a discussion thread on Apple’s support board entitled “UK 02 (poor signal strength/reception problems)”:

My iphone can barely pick up even the slightest signal, although on occasion can pick up 3 [b]ars, only for it to drop out again. I have two other 02 phones, a Sony Erricson and a Nokia n95 with no reception problems at all. Is anyone experiencing same problem with their iphone, I would like to hear from you. (link)

Two weeks later, Matlock’s query has received more than 100 replies (and 3,723 pageviews), most of them registering similar complaints. Some users found that reinstalling the software made a difference. When others returned their phones for new ones, the problem went away (although some reported that the new phones were no better).

Definitive U.K. sales figures are not available, but O2 reported that “tens of thousands” of iPhones were sold the first weekend it was available.

Several posters on the Apple discussion board volunteered that unlike the complainants, they were getting great reception on their iPhones. And many owners with signal problems expressed pleasure with how well the device performed its other functions.

But unlike American iPhone owners, who tend to blame any reception headaches on AT&T’s (T) cellular network, the assumption in the U.K. seems to be that the signal problem is Apple’s. That impression is reinforced by O2, which has been referring callers directly to the manufacturer.

One clue is that many British iPhone owners can, like Matlock, compare the signal strength on their iPhone with other cellphones using the same network (one user even posted photos showing the phones side by side). Another is that the indicator on the iPhone tends to jump to five bars as soon as it is placed in the charging dock, which suggests that the problem is battery related. As user Richard Catledge points out:

It says in the manual that phone signal is adjusted to the minimum power when not in use, just enough to detect the incoming pings, then it will power up to get the best quality call. It is digital, so as long as the signal power is strong enough to reconstruct at the other end, more power is pointless. I suspect this is what you are seeing, or a slightly flakey implementation.

Meanwhile, the consensus on the discussion board is that unhappy owners should let Apple know. Writes one user who posts as ::…SAM…::,

The only way to get anything done about it is if people that have poor signal problems is to take your phone back and get it replaced. The more phones they get back, the sooner they will do something to fix the problem. Emails and complaints are fine, they can be put in a folder, high handset return numbers cant be so easy to hide under the rug.

Thanks to InformationWeek’s Alexander Wolfe for the link. See his report here.

Britons snapped up Apple (AAPL) iPhones at a healthy clip over the weekend, according to sales estimates that appeared in the British press this morning.

The Guardian and The Times quote Peter Erskine, CEO of O2 UK, estimating that “tens of thousands” of the devices were sold at Apple, O2 and Carphone Warehouse stores over the weekend. The Mirror, citing an unnamed O2 spokesperson, put the number at 70,000, according to Macworld U.K.

Erskine went on to call the iPhone the fastest-selling device his network has ever seen. He said 2/3 of the iPhone customers were new to O2, which suggests that they were lured away from Vodafone (VOD), Orange or T-Mobile. (link)

The sales figures went a long way to countering early suggestions — including one here — that the iPhone might be getting a tepid reception in the U.K. A thinly reported story in The Register went so far as to call first night of sales a “flop,” and Apple stock fell on Monday in part reacting to such perceptions.

But Apple’s partners in both the U.K. and Germany, where the iPhone went on sale Friday at midnight, insist that sales met or exceeded their expectations. The U.K. cellphone market is particularly tough to crack because it is so saturated; there are more cellphones in Britain than people.

When population size is taken into account, however, U.K. sales may even have exceeded those in the U.S.

The U.S. population is roughly 300 million. Germany’s population is 82 million; the U.K.’s is 60 million.

T-Mobile, which carries the iPhone in Germany, hasn’t released weekend sales figures, but said that it sold more than 10,000 iPhones that first day. In the U.S., Apple sold 270,000 iPhones during the first weekend of sales; as many as 200,000 may have been purchased that first day. Piper Jaffray analyst Gene Munster did the math for Germany’s first-day sales and calculated that Apple sold 1 iPhone for every 8,200 Germans compared with 1 iPhone for every 1,510 Americans.

If the 70,000 figure for U.K. sales is accurate, Apple may have sold 1 iPhone for every 860 Britains in 2 1/2 days as opposed to 1 iPhone for every 1,111 Americans.

For the faithful, waiting long hours in line for a new Apple (AAPL) product has become one of those formative experiences they’ll be retailing to their grandchildren.

It’s “a bit like going to a rock concert,” Paul Waite told the London Times after sitting in the bitter cold outside Apple’s Regent Street store for 12 1/2 hours on Friday for a chance to buy an iPhone on its first day of sale.

For Apple, the queues have become an important marketing tool — one they carefully nurture and stage manage for maximum effect. The lines of eager buyers generate buzz, build customer loyalty and produce a flood of free publicity in the local media.

And they are totally unnecessary.

Rumors planted by Deutsche Telekom (which owns T-Mobile) of possible holiday shortages in Germany notwithstanding, there were plenty of iPhones in stock when the device made its European debut Friday at midnight. According to the AP, a crowd of 350 braved wind and rain to buy the phone at the Deutsche Telekom shop in Cologne, despite the fact that there were iPhones to be had without a wait at nearly empty T-Mobile shops across the country.

Likewise, a hardy band of a half-dozen hard-core fans shivered through the night outside London’s flagship Regent Street store — the advance party of a much-photographed and interviewed queue that grew to 300 by the time doors opened at 6:02 PM. (The time was a nod to Apple’s British carrier, O2 U.K.) Meanwhile, iPhones were in stock at more than 1,300 other Apple, O2 and Carphone Warehouse shops.

The fans, for their part, were stroked and coddled through the night by Apple and its corporate partners. Third in line (and first out the door with an iPhone, having waited 26 hours for the honor) was Tomek Jasinski, 20, an architecture student in London. He kept a running diary of his experience in his blog, where he reported that Apple employees provided free coffee (in free Apple mugs), Apple umbrellas and plastic bags to keep dry. The Cloud, whose network will provide free Wi-Fi for the iPhone, was even more generous, providing hoodies and hats and plying Jasinski and his fellow queue-holders with pizza, donuts and Starbucks hot chocolate.

As the crowds grew and the deadline approached, the media gathered in force — at one point, Jasinski counted 25 cameras. The BBC’s Rory Cellan-Jones described the scene at the end as “mayhem.” Just before the doors opened, he said, Apple staffers walked up and down the lines of people, “whipping them into a frenzy.”

Deutsche Telekom says it sold 10,000 iPhones in Germany between midnight and 5 p.m. Friday (link, in German). Apple sold 270,000 in two days after its U.S. debut.

UPDATE: Reader Jasper from L.A. helpfully points to dial-a-phone’s Mobile phone blog, which posted photos of deathly quiet O2 and Carphone Warehouse shops around London as Fleet Street zeroed in on the Apple store on Regent Street. There are nice photos of the mob scene inside that store at AppleInsider. For Fake Steve Jobs’ take, see his Secret Diary here.

[Photo of Jasinski, left, and friend © 2007 Tomek Jasinski. Reposted with permission.]