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– Check out our exclusive hands-on video review of the iPhone 3G

It’s fair to say that the arrival of the second iPhone has caused a bit of a fuss. Interestingly, the new features it has – 3G, GPS, the ability to run third-party applications – only just bring it up to the level at which most mobile manufacturers have been running for some years.

But we’re not going to get bogged down in industry implications of the iPhone 3G, just get on with reviewing the hardware, and the new features of iPhone software 2.0.

Familiar face
From the front, the iPhone is largely unchanged. It still uses solid-state memory in 8GB or 16GB capacities. It gets a new curved back panel that comes in shiny black plastic or, with the 16GB version, the choice of a white finish.

Don’t be alarmed by the word ‘plastic’: typically for an Apple product, it feels solid and classy, and nearly all the people we polled preferred it to the old matt silver metal finish. On paper, the new iPhone is not thinner than its predecessor, but the curved back makes it feel so nonetheless.

The recessed headphone socket is gone so you can use any headphones, without an adaptor. Great news, even if a little of the jack is exposed due to the curved back.

Impressive GPS
As you’d expect, the inclusion of GPS doesn’t mean any unsightly external aerial. It locked onto satellites quickly, taking between 30-45 seconds from ‘cold’ (when started up in an entirely new location).

A blue marker shows your position on the familiar Google Maps application, and it will do visual and text – but not spoken – directions to a location. It uses A-GPS, which means that it gets (A)ssistance from the network provider to maintain a good fix even in built-up areas. It dropped out in a couple of London’s alleyways, but quickly recovered once you got back to wider streets.

Supercharged web browsing
So, to the headline: 3G, or, more accurately, 3.5G, as there’s support for O2’s HSDPA network too. Unsurprisingly, it’s all good. Clearly, download speeds over are greatly improved over its EDGE-only predecessor.

But there’s more good news. We raced it against a Nokia N-series mobile running on Vodafone’s HSDPA network, and the iPhone was first nearly every time. Whether this is down to the network, or Safari’s superior rendering, is unclear, but the benefit is: your webpages and downloads, faster.

There’s more. Wi-Fi reception seems to be improved over the previous iPhone. In one part of our office, the new iPhone showed full wireless signal; the old iPhone only one bar.

Music and video playback are excellent. You still need a Wi-Fi network to connect to the iTunes Store, so you can’t threaten the data usage policy by downloading videos.

Well juiced
Battery life seems to be close to Apple’s claims: five hours of phone action, seven hours of video, and 24 hours of audio. All figures aside, it passed the real-life test – we haven’t been able to keep our hands off the thing, and it still had battery left at the end of the day.

Other iPhone 3G highlights come courtesy of the new 2.0 software. Microsoft Exchange support we’ll be handling as part of our review of the new third-party apps. The ability to delete and move multiple messages is a boon – although copy and paste is still absent. Support for PowerPoint and Office documents is welcome, and the new scientific calculator is a nice touch.

The downsides
Drawbacks? The camera remains just 2megapixel, with no flash or auto-focus. Thankfully, the camera software works well to overcome these failings, adjusting for low light admirably. Some people still find the on-screen keyboard tricky – yes, it auto-corrects in body copy, but web addresses and map searches can be a pain.

Time for the big question. Should you buy, or upgrade to, an iPhone 3G? Yes. It’s a faster, cleverer version of an already remarkable phone, and one that’s about to be buoyed by the arrival of a load of retail apps.

But we’ve saved the best for last: the price. At the very most, you’ll pay £160 for a 16GB iPhone with the cheapest contract. More than most high-end mobiles, yes, but worth it for the entertainment, connectivity and productivity the iPhone gives you.