Apple captured the hearts of many phone users last year with the release of the iPhone, but many felt that the phone was lacking.

This week Apple anounced the release of the iPhone 2 (or the iPhone 3G). The iPhone 2 does at first glance seem to answer many prayers of its followers, with much faster downloading of music, GPS tracking and faster innards. It will also quite surprisingly allow third party applications, allowing you to customise your iPhone 2!

The downsides slowly seem to be piling up though, in a quick flash back to Apple doing a U-Turn over the restrictions on their DRM software they will no doubt soon suffer when people buying an iPhone have to sign up to a 2 Year Contract, and will have to pay with er $30 or $45 per month for the privilage of owning the iPhone 2. The iPhone 2 also still seems to lack some basic phone functions such as Multimedia messaging.

The biggest draw back though does have to be the contract costs, implemented due to a large number of iPhones being unlocked from their parent networks (AT&T in the US and 02 in the UK). This was a joint decision by AT&T and Apple, who receive a share of profits from the iPhone users data usage.

The lack of network choice is however really going to grind the wrong way against a lot of people, especially many hardcore iPhone users who have threatened to Boycott the new iPhone!

Dispite all this though I do not doubt Apple will sell a huge amount of iPhone 2 3gs when they are released on 11th July!