The newest version of the Apple's iPhone went on sale Friday in Canada, with new customers and some owners of the previous model being offered substantial discounts.

The iPhone 3G S began selling across Canada at Apple stores at 8 a.m. local time, one hour after they went on sale in the United States. Rogers and its discount brand, Fido, began selling the new phones at their stores at 10 a.m.

The introduction of the latest iPhone comes with less fanfare than when the first 3G iPhone arrived in Canada in the summer of 2008. That summer, consumers lined up to be among the first to get their hands on the popular devices.

The lack of fanfare is in part because this is more of an update than an entirely new device, as the original iPhone was when it first appeared in the United States in 2007.

But the market for web-browsing and multi-media capable mobile phones — dubbed smartphones — has also matured in the last year, as competitors such as Palm and Research in Motion as well as mobile phone mainstays such as Nokia, Samsung and HTC battle for market share.

Palm's Pre smartphone debuted on June 6 in Canada while Waterloo-Ont.,-based Research in Motion has launched a number of consumer-friendly BlackBerrys in the last year. Google Inc.'s Android operating system is also now available on phones in Canada and around the world.

Market analyst IDC Canada said last week that smartphone shipments rose 38 per cent in the first quarter of 2009 compared to the same period a year earlier while traditional mobile phones without high-level operating systems fell 37 per cent during the same period.

Three-year contracts for new iPhone

New Rogers customers can expect to pay $199 for the 16 gigabyte iPhone 3G S and $299 for the 32 GB version with a three-year cellphone contract. U.S. consumers, on the other hand, only have to sign up for a two-year contract.

Rogers also announced Friday that 3G S users can subscribe a data plan that allows users 6 GB of data per month for $30. That is a promotional price that will only be available until July 31.

The lowest discounted price for the phone also applies to those who bought an iPhone 3G — the older model — before Sept. 30 and who also subscribe to service plans that cost more than $100 monthly.

There's a partial discount for those who spend less than $100 on their monthly plan and purchased their iPhone 3Gs after Sept. 30 but before the end of 2008. For this group, the 16 GB 3G S will cost $449 and the 32 GB version will cost $549.

That pricing has been put in place to reward people who bought the iPhone early, Rogers said.

For people who don't fit into any of the discount categories, the 3G S retails at $680 for the 16 GB model and $780 for the 32 GB version.

Software update, new features

Apple also released its software update for previous customers two days early. There were only scattered reports of problems with that upgrade.

According to the new iPhone 3G S website, the new phone is as much as two times faster and more responsive than the original iPhone 3G. It also includes features such as:

• Internet tethering, which allows the iPhone to share its 3G wireless network connection with a laptop computer.
• Video-recording ability.
• A three-megapixel camera with built-in autofocus and the ability to focus on individual objects by tapping their image on the screen.
• Voice control.
• A digital compass.
• A larger keyboard that can be accessed by rotating the phone into the "landscape" orientation.
• Cut, copy and paste text capability between programs.