The Day My iPhone Died

My iPhone is doomed. Apple (Nasdaq: AAPL) CEO Steve Jobs just said so. "Sorry, no," Jobs apparently wrote to a customer asking about future support for 2G iPhones like mine.

Call it the end of an era. The original iPhone sold mightily upon release and helped produce billions in free cash flow for the Mac maker. Now, with the forthcoming release of the 4.0 version of Apple's iPhone operating system, the 2G appears retired from active service, never again to receive a major OS update. Its big brother, the 3G, will get a limited upgrade that doesn't include multitasking.

"I feel robbed by this latest OS upgrade," says my Foolish colleague Joe Magyer, one of our top analysts for Motley Fool Inside Value and Motley Fool Special Ops. "I think I'm just going to buy the next one that rolls out. Steve Jobs has me wrapped around his bejeweled pinky finger."

On Twitter, Mac enthusiast Joel Burdeaux expressed similar feelings. "It's pretty uncool that we early adopters of the iPhone, who have taken care of [and] still use our 2G/EDGE phones will be unsupported in June."

I agree in principle. I'd love to keep my 2G iPhone fresh with new software. But neither I nor anyone else can claim to be surprised by Apple's choosing to focus on new, improved hardware. History says this is exactly what we should expect from the Mac maker:

• In 1994, Apple replaced 68k chips with PowerPC processors designed in concert with what is now Freescale Semiconductor and IBM (NYSE: IBM).
• In 2001, four years after acquiring Jobs' NeXT, Apple introduced OS X in an attempt to better compete with Windows.
• In 2005, Apple once again switched chipsets -- this time from PowerPC to Intel's (Nasdaq: INTC) x86 design.

An A4 effort
Evidence of Apple's latest platform shift appeared a month ago, with the introduction of the iPad, a device whose brain wasn't outsourced from Intel but rather designed internally. It's a reasonable bet that the next iPhone and iPad will sport not just a new OS but also a new chip. Apple doesn't move slowly when it comes to migrating platforms. It never has.

If history holds, users may find the shift worthwhile. Among iPhone 4.0's new features will be multitasking, whereby applications meant to run in the background -- such as Sirius XM's (Nasdaq: SIRI) streamed programming -- will do so, even as users check mail, Twitter, or Facebook, or perform other more meaningful tasks. Palm (Nasdaq: PALM) received well-deserved kudos for building multitasking into its Pre smartphone when it was first introduced.

Where this feature gets really interesting is with Skype and other VoIP services. AT&T (NYSE: T) has already said it would allow Skype calls over its data network; iPhone 4.0 will make that process easier.

Other innovations include a unified inbox that seems designed to make Apple mail on the iPhone more like Gmail, and Folders, which will allow users to digitally stack categorically similar apps into folders and save screen space.

But wait, there's more!
But iPhone 4.0's most disruptive quality comes in the form of iAd, Apple's answer to Google's (Nasdaq: GOOG) AdMob.

The differences are striking. Whereas Google's efforts appear more closely aimed at carriers looking to get a slice of mobile pie, Apple is courting app developers and ad agencies. Like iTunes, they'll receive the majority of revenue their iAds generate with a cut going to Apple.

Call it the mobile equivalent of the infomercial, with Jobs acting the part of Ron Popeil.

Seriously. Jobs had his own "but wait, there's more!" moment during his iAd demo. "This is a new kind of mobile ad. Have you ever seen a mobile ad like this? Anything even close?" No, I haven't, and that's Jobs' point. Apple's going around rather than at Google in this first salvo of what's sure to be a prolonged mobile device war.

My 2G iPhone is just the first casualty.

Will you upgrade to iPhone 4.0? Why or why not? Discuss in the comments box below.