Apple plans to introduce a new version of the iPhone in July that comes equipped with support for faster 3G networking. And the new version of the popular smartphone will be available for a dramatically lower price.

The 3G iPhone, unveiled by Apple CEO Steve Jobs at the end of his Worldwide Developers Conference keynote Monday, will sell for $199 for the 8GB model and $299 for the 16GB model. That's a $200 discount from the previous $399 and $499 prices for the 8GB and 16GB iPhones, respectively.

Shipping July 11 in 22 countries, the 3G iPhone will enable faster data downloads over AT&T's 3G network. The handset will also include built-in GPS.

UPDATE: Gruber says today's iPhone announcements are all about grabbing up market share, at the expense of technical wowzerism. And that's ... well, I'm not saying it's not right, but it's hilarious in a way:

The iPhone 3G seemingly only has two major hardware additions: 3G networking and GPS. The battery, I suspect, might be stronger (and, given the shape of the back of the iPhone 3G, perhaps a stronger but bigger battery. No front-facing camera. No video from the rear camera. Instead of building a better $400 iPhone, they worked on halving the price of last year’s phone.

Apple punditry in this day and age is founded on the principle that whatever we can dream up that Apple might do, they've got something cooking that will confound all of our predictions, founded as they are on yesterday's technology and today's assumptions. We've observed wave upon wave of "iPhone killers" hit the market, touting (purportedly) iPhone-competitive features along with (purportedly) iPhone-beating speed/flexibility/cheapness. We've shrugged them all off with the blithe presumption that Apple would bring out an iPhone this summer that would be so far beyond the current one in concept and features that it would leave all the other guys looking like the companies that are still falling all over themselves trying to produce a cheaper clone of the 5G iPod. We've presumed that Apple would forgo the easy path of market domination, steer clear of price subsidies and Yalta pacts with strategic devil-partners, and stick to the path of forging sexy new ground with undreamed-of technology, and allow the market to come to it.

So... now Apple has essentially done the opposite of what everyone expected: they didn't bring out any unexpected features. They went for market share. They bargained with AT&T. They stuck with last year's phone, with the bare minimum set of upgrades to placate the plaintiffs in the audience, and they braved the onslaught of a million billion clone makers who will seek ever harder to catch up to where the iPhone was last year, now that the target—to our great surprise—isn't moving after all.

How's that for an unexpected move?

Yet, if Gruber is correct that this is all about building entrenched support for the iPhone platform rather than wowing people with can't-get-it-anywhere-else features, those clone makers will still do little else but dash themselves to pieces—just as even a perfect iPod cloner can't offer the iTunes Store, and even a perfect OS X-on-PC vendor can't offer a legitimate support or upgrade path, fat lot of good a perfect iPhone 3G clone will do the likes of LG or Samsung if they don't support the apps made possible by the iPhone platform.

Now that platform had better knock our socks off, huh?