On Friday, Apple (AAPL) is launching a second-generation iPhone, called the iPhone 3G, which addresses both of those problems, while retaining the look and feel of the first model’s hardware and software.

The base version of the new iPhone costs $199 — half the $399 price of its predecessor; the higher-capacity version is now $299, down from $499. Yet, this new iPhone is much, much faster at fetching data over cellphone networks because it uses a speedy cellular technology called 3G. And it now sports a GPS chip for better location sensing.

The company also is rolling out the second generation of its iPhone operating system, with some nice new features, including wireless synchronization with corporate email, calendars and address books. And there’s a new online store for third-party iPhone programs that Apple hopes will make the device usable for a wider variety of tasks, including gaming and productivity applications. This new software and store will also be available on older iPhones, through a free upgrade.

I’ve been testing the iPhone 3G for a couple of weeks, and have found that it mostly keeps its promises. In particular, I found that doing email and surfing the Internet typically was between three and five times as fast using AT&T’s 3G network as it was with the older AT&T network to which the first iPhone was limited.

Apple’s new iPhone operating system includes an ‘App store,’ where you can browse for, and download, third-party software.

The iPhone 3G is hardly the first phone to run on 3G networks, and it still costs more than some of its competitors. But overall, I found it to be a more capable version of an already excellent device. And now that it’s open to third-party programs, the iPhone has a chance to become a true computing platform with wide versatility.

There are two big hidden costs to the new iPhone’s faster speed and lower price tag. First, in my tests, the iPhone 3G’s battery was drained much more quickly in a typical day of use than the battery on the original iPhone, due to the higher power demands of 3G networks. This is an especially significant problem because, unlike most other smart phones, the iPhone has a sealed battery that can’t be replaced with a spare.

Second, Apple’s exclusive carrier in the U.S., AT&T Inc. (T), has effectively negated the iPhone’s up-front price cut by jacking up its monthly fee for unlimited data use by $10. Over the course of the two-year contract you must sign to get the lower hardware prices, that adds $240, overwhelming the $200 savings on the phone itself. If you want text messaging, the cost rises further. With the first iPhone, 200 text messages a month came free. Now, 200 messages will cost $5 a month, or another $120 over the two-year contract.

The iPhone 3G still has a couple of features that made the first version unpalatable to some potential buyers. It uses a virtual on-screen keyboard instead of a physical one. While I find the virtual keyboard easy and accurate, not everyone does. Also, in the U.S. and in many other countries, the iPhone is still tied to a single exclusive carrier, whose coverage or rate plans may be unacceptable to some.

Here is a rundown of the changes in the new model.

Design: The new iPhone looks almost exactly like the old one. It is the same length and width, has the same big, vivid screen, and has the same number and layout of buttons. The main difference is the back, which is now plastic instead of mostly metal and curved instead of flat. It’s very slightly thicker in the middle, with tapered edges, and weighs a tiny bit less.

The new iPhone 3G (left) delivers much higher Internet download speeds over cellular networks than the original iPhone (right).

Like its predecessor, the iPhone 3G comes in two models distinguished only by storage capacity: 8 gigabytes and 16 gigabytes. The top model is available in black or white.

Apple has greatly improved the audio on the new iPhone. I found the speaker was much louder, for music and for the speakerphone. But the new phone produced an echo when used with the built-in Bluetooth system in my car. Also, the headphone jack is now flush with the case instead of recessed as on the first model, so it can accept any standard stereo earphones.

The camera, however, is still bare-bones. It can’t record video and has a resolution of just two megapixels. The power adapter is now tiny, at least in the U.S., but Apple no longer includes a dock for charging, just a cable.

Software: The basic software is similar. The biggest addition for some users will be full compatibility with Microsoft’s (MSFT) widely used Exchange ActiveSync service, which many corporations use. In my tests, I was able to connect the iPhone 3G to my company’s Exchange servers in a few minutes, and my corporate email, calendar and contacts were replicated on the phone. Any changes I made on the iPhone were reflected almost instantly in Microsoft Outlook on my company PC, and vice versa. Email was pushed to the phone as soon as it was received on the company’s servers.

One drawback: While you can have both personal and Exchange email accounts on the new iPhone, if you synchronize with Exchange calendars and contacts, your personal calendar and contacts are erased.

The new iPhone and upgraded older iPhones also will be able to use a new Apple consumer service, MobileMe, which offers synchronized push email, calendars, photos and contacts.

There are other improvements. You can now delete multiple emails at once, set parental controls and search your contacts. You can also save photos in emails or from Web sites. You can also now open Microsoft PowerPoint files sent as attachments, though I found in my tests that opening larger PowerPoint files crashed the phone.

Some software features missing from the first iPhone are still AWOL on the new one. There’s no copy and paste function, no universal search, no instant messaging and no MMS for sending photos quickly between phones.

Network: Like the old iPhone, the new one can perform Internet tasks using either Wi-Fi wireless networking or the cellphone networks. But the addition of 3G cellular capability makes the new model more useful for Web surfing, email and other data tasks when you’re not in Wi-Fi range. In my tests, in Washington and New York, I got data speeds mostly ranging between 200 and 500 kilobits per second. By comparison, the original iPhone, tested in the same spots at the same time, mostly got cellular data speeds between 70 and 150 kbps on AT&T’s old EDGE network. The new iPhone typically was between three and five times as fast as the old one.

While AT&T now has 3G networks in 280 U.S. cities, and aims to be in 350 by year end, it is converting its cellphone towers gradually, so not all areas of included cities have 3G coverage. The new iPhone falls back to EDGE speeds when 3G isn’t present.

One side benefit to 3G is that in some areas, voice coverage improves. At my neighborhood shopping center, where the first iPhone got little or no AT&T service, the iPhone 3G registered strong coverage. But I still found that calls regularly broke up on some major streets. In New York City, riding in a taxi along the Hudson, one important call was dropped three times on the new iPhone. Finally, I borrowed a cheap Verizon (VZ) phone and got perfect reception.

Battery life: Apple claims that over 3G, the new iPhone can get five hours of talk time, or five hours of Internet use. Talk time is twice as long on the older EDGE network, and Internet time is an hour better with Wi-Fi.

I ran my own battery tests using the phone’s 3G capability. Although I left the Wi-Fi function on, I didn’t connect it to a network, so the phone had to rely on 3G. In my test of voice calling, I got 4 hours and 27 minutes, short of Apple’s maximum claim and nearly three hours less than what I recorded in the same test last year on the original iPhone. In my test of Internet use over 3G, I got 5 hours and 49 minutes, better than Apple’s claim, but far short of the nine hours I got using Wi-Fi in last year’s tests.

More important, in daily use, I found the battery indicator on the new 3G model slipping below 20% by early afternoon or midafternoon on some days, and it entirely ran out of juice on one day. I overcame this problem by learning to use Wi-Fi instead of 3G whenever possible, turning down the screen brightness and even turning off 3G altogether, which the phone permits.

The iPhone 3G’s battery life is comparable to, or better than, that of some other 3G competitors. But they have replaceable batteries. The iPhone doesn’t.

Third-party software: If things go as Apple hopes, third-party software could be the biggest attraction to the new iPhone 3G, and to upgraded older iPhones. By some estimates, there will be hundreds of these programs, some free and some paid, almost immediately.

Apple didn’t supply me with programs for testing, but I managed to try several on older devices upgraded to the new operating system. I tested a game that used the phone’s motion sensors to control the action, and I tested several programs from America Online (TWX), including AOL Instant Messenger; AOL Radio, which streams music from the Internet; and AOL’s Truveo video search engine. All worked very well.

Among the programs Apple has publicly previewed were a sales automation program from Salesforce.com, a game called Super Monkey Ball from Sega and a program for bidding on eBay (EBAY). Also made public were a news reader from the Associated Press, a program for following live games from Major League Baseball and several programs for doctors, including the Epocrates drug reference.

Bottom line: If you’ve been waiting to buy an iPhone until it dropped in price, or ran on faster cell networks, you might want to take the plunge, if you can live with the higher service costs and the weaker battery life. The same goes for those with existing iPhones who love the device but crave faster cellular data speeds. But if you already own an iPhone, and can usually use Wi-Fi for data, you probably should hold off and get the free software upgrade before deciding whether it’s worth getting the new hardware.

Find all of Walt Mossberg’s columns and videos online, free, at the All Things Digital Web site, walt.allthingsd.com. Email him at mossberg@wsj.com.

In fact, your boring old cellphone has enormous potential. Here is a guide to checking your email, looking up information and updating your calendar, just by sending text messages. You can use any cellphone, but you’ll need a generous text-messaging plan.

For email, I tested TeleFlip, a free service that lets you send and receive email via text messaging. TeleFlip works with any email account that doesn’t require a secure connection to the Web. That applies to all the major Web-based email providers, including Yahoo Mail, Hotmail and Gmail.

Signing up for TeleFlip took me under five minutes. All I needed to enter was my Gmail email address and password, my cellphone number, and a confirmation number that TeleFlip sent to my cellphone — via text message, of course. TeleFlip then had me build a “whitelist” of contacts, by importing my address book or manually adding email addresses. If I receive an email from someone not on that list, I don’t get it on my cellphone — an annoying quirk. (TeleFlip has plans to let users access all of their emails, beginning around August.)

TeleFlip does what it promises — but it’s neither fast nor pretty. It took from three to 35 minutes for TeleFlip to text me my emails after Gmail received them, averaging about 10 minutes. Because cellphone carriers typically limit text messages to 160 characters, TeleFlip chops each email into snippets, sent in successive text messages. You can decide how many snippets you want to receive. I thought three was enough to get the gist of the messages.

You can also instantly send email. TeleFlip assigns a nickname to each of your contacts — the first six characters of their email address. To send email, text TeleFlip at 33715 and type the recipient’s nickname and the message — for example: “walt.m Thanks for your email. I’ll get back to you soon.” It will appear to the recipient as if it came from your email, not your cellphone.

One turnoff: Each time I received an email via TeleFlip, the company sent a one-time email to the sender telling them about TeleFlip. I found that intrusive. TeleFlip says it will let users disable those emails starting around August.

To search the Web, I tried services from Google (GOOG), Yahoo (YHOO) and 4info. Google can be reached by sending a text message to 466453 (”Google”); for Yahoo, text 92466 (”Yahoo”); for 4info, text 44636 (”4info”).

To find information, it’s useful to know some shortcuts: For a stock quote, text message a ticker symbol. For sports scores, type a team’s name. For local information, type “weather,” “movies,” or the name of a local business, along with a ZIP Code or the name of a city. In my tests, all three services responded accurately to my text messages in under 10 seconds.

Each service has unique features. To find local businesses, I liked Yahoo because it includes cross streets. For instance, when I searched for a certain Indian restaurant, Yahoo gave me its phone number and address, as well as the text, “Near the intersection of Valencia St and 21st St.”

I liked that 4info lets you set up customized alerts to your cellphone — texting you, say, when Target’s stock falls by more than 5% (4info.net/alerts/add/stock) or when a Red Sox game ends (4info.net/alerts/add/sports).

Google, meanwhile, sends you driving directions if you text it this: “directions from (address, city or ZIP Code) to (address, city or ZIP Code).” You can also do rudimentary searches by texting Google: “web” plus the search term.

In response to Web-search queries, Google typically sends back text messages with words from the top search results. So, be extra-precise with your search terms. While parking my car, I couldn’t remember what a blue curb meant. I texted Google, “web blue curb” and got an unhelpful result from a university Web site. Next, I typed, “web parking blue paint curb” and received a message telling me that a blue curb designates parking for the disabled.

With Google Calendar, you also can check and update your calendar using text messaging. To start, visit calendar.google.com. Click “Settings” in the top corner and then click the “Mobile Setup” tab to register your cellphone for notifications. Click the “Calendars” tab. Next, click “Notifications” and follow instructions.

You can receive text-message reminders for events. You can also ask for a daily agenda, or even get reminders on the fly at 48368 (”Gvent”). Texting “day” got me the day’s schedule, texting “next” got me my next event and texting “nday” got me the following day’s schedule.

My favorite part: You can add events to your Google Calendar by texting “Gvent.” To add a dinner date for the following week, I simply wrote, “dinner Tuesday 7 pm.” When I visited Google Calendar online a few minutes later, the event was already listed.

• Send email to Vauhini.Vara@wsj.com. Walter S. Mossberg returns on June 5.

That may sound like Apple’s heavily publicized iPhone, which runs on the AT&T wireless network, but it’s not. This phone is called the Voyager, and it’s made by LG and runs on the rival Verizon Wireless network.

Despite their superficial similarities, the two devices are very, very different. In fact, Verizon’s public-relations people are at pains to say the Voyager isn’t intended as an “iPhone killer” or even a “smart phone.”

Still, the Voyager is worth a close look, if only because it is one of the first competitors that attempts to mimic Apple’s touch interface, and many of its functions overlap the iPhone’s.

The Voyager beats the iPhone in certain respects. Unlike Apple’s product, it runs on a fast, 3G data network. And my experience has been that Verizon’s network has better coverage than AT&T’s in many cities, especially on the East Coast. It also costs less: $299, after a rebate, with a two-year service contract, compared with $399 for the iPhone.

In addition, the Voyager has GPS and thus provides real-time navigation, a capability the iPhone currently lacks. And the Voyager can even receive live TV programs for an extra monthly fee of $15, though it gets only eight channels and its TV function works only in certain cities.

A big advantage of the Voyager for some people is that it has a physical keyboard for typing in addition to the kind of virtual onscreen keys that are the iPhone’s only method for entering text. This keyboard is revealed by opening the phone, which then resembles a little laptop with a display that’s separate from the outside touch screen. I found that typing worked pretty well. For folks who insist on a physical keyboard, this is a big deal.

Finally, LG has enhanced the Voyager’s touch screen with feedback: When you tap an icon or scroll through a list, you get a light physical sensation.

But the Voyager is bulkier than the sleek iPhone — about 50% thicker and 40% larger overall — even though it’s a tad lighter. And it lacks the iPhone’s ability to use Wi-Fi hot spots and home networks, which are often faster than Verizon’s 3G network. It also has only about half the battery life; a smaller, lower-resolution screen, and just a fraction of the Apple’s internal memory. (Unlike the iPhone, the Voyager lets you add memory cards, but it doesn’t come with any.)

Most importantly, the Voyager suffers badly in the area where Apple’s phone shines: software. Whether Verizon considers it a direct iPhone competitor or not, the LG product tries to do many of the same things, and it generally falls short.

This is the true challenge that the iPhone poses to established phone makers like LG. Apple has managed to build into its phone a real PC-grade operating system with a breakthrough user interface and elegant programs, something that has eluded the major cellphone makers.

As with so many of the new feature-packed mobile phones, the Voyager’s user interface is clumsy and confusing, requiring too many steps to perform simple tasks. And its applications, such as the photo organizer, music player, Web browser and email program, are primitive compared with the iPhone’s.

In fact, the Voyager, bafflingly, has several different user interfaces — two on the outer touch screen and an entirely different one on the inner screen above the keyboard that doesn’t work by touch at all. Some functions work only with the inner screen.

Scrolling through lists with the Voyager’s touch screen is a halting, frustrating process compared with the smooth, slick scrolling on the iPhone. Its touch functions are old style and basic compared with the new “multitouch” approach that Apple built into the iPhone. Unlike the iPhone, the Voyager doesn’t allow you to “flick” through photos or other screens, or to use two fingers to enlarge or shrink photos or Web pages. It also doesn’t automatically change photos or Web pages from portrait to landscape view by just turning the phone.

In addition, while the Voyager’s Web browser can show real Web-page layouts, I found it to be far inferior to the iPhone’s browser, which shows entire pages and then zooms in on the parts you want to read with a couple of finger taps.

Apparently because the Voyager isn’t considered a business tool or smart phone, its email function isn’t included on any of the main menus or even located under the envelope icon labeled “messaging.” To find it, you have to wade through multiple menus with unhelpful names like “Tools on the Go.”

Even doing something as simple as entering flight mode — which turns off a phone’s internal radios for use on a plane and takes two steps on the iPhone — requires five steps on the Voyager.

Verizon is promising to improve the Voyager, but right now it’s a classic example of how the leading cellphone makers are going to have to step up their games, especially in software, to match Apple’s upstart device.

• Email me at mossberg@wsj.com. Find all my columns and videos online free at the new All Things Digital Web site, http://walt.allthingsd.com.

Yes, more cars are making it easy to connect wirelessly with Bluetooth-equipped cellphones so drivers can make hands-free phone calls — but not hands-free text messaging. And that results in the dangerous practice of texting while behind the wheel.

And, yes, you can pipe the sound from your portable music player into the car’s speakers. But you usually have to control the song selection and skipping by handling the player itself, and that’s another dangerous distraction.

Some car makers solve this music problem with integration kits that transfer control of the music player to the dashboard or steering-wheel controls and display song information on a dashboard screen. But this option is most common in luxury cars and is typically designed only for Apple’s iPods.

Now, Ford Motor, working with Microsoft, has come up with a system that’s a big step forward in integrating cellphones and portable music players into cars. It’s highly versatile and works with numerous devices on a wide range of Ford models.

I’ve been testing the $395 option, called SYNC, with multiple cellphones and music players. It’s quite good and indicates that the digitally backward auto industry finally may be getting it.

SYNC combines the often separate cellphone and music-player functions into one unified interface that can be controlled by a voice-recognition system that works well. You can command it by voice to play a single song out of thousands on your iPod or other music player. With some phones, it will even read your incoming cellphone text messages to you, and properly pronounce text-message shortcuts such as LOL (Laughing Out Loud.)

Ford isn’t limiting this system to luxury cars. It’s available on a dozen models — including the company’s least-expensive car, the Ford Focus. I tested SYNC on a Focus.

SYNC simultaneously handles multiple cellphones and music players from a variety of companies. It imports and remembers the address books and song information for up to 12 phones and four players, so that as you connect and reconnect a remembered device, wired or wirelessly, it is ready to go. It doesn’t have a hard disk and doesn’t store your music.

Unlike other approaches, the Ford system doesn’t require a special cable or proprietary connector. It uses a standard USB port and the cable that came with your player. SYNC will even play music directly from a USB thumb drive. There’s also an audio-in jack for players that don’t support USB, or which require both.

SYNC can even stream music wirelessly, over Bluetooth, from the cellphones that support this feature. However, due to limitations in Bluetooth, it doesn’t transfer song selection controls, or the song information display, to the dashboard in this scenario. The same limitation applies if your player can be connected only with the audio-in jack.

I tested SYNC with two music players and four cellphones and the system handled them all effortlessly. I used a year-old iPod and a new Samsung P2 as my test music players, and SYNC quickly transferred their song information and allowed me to select playlists, artists, albums, genres and individual songs by voice command.

I tried the cellphone functions with an Apple iPhone, a Motorola RAZR, a RIM BlackBerry and a new HTC Shadow phone and, again, all worked properly. While phone calls and address-book imports were handled easily on all the phones, some of SYNC’s advanced functions, like the reading of text messages and the streaming of music, aren’t widely supported on all phones. For example, only the RAZR worked with the text-message feature.

The iPhone test was especially interesting because it is both a Bluetooth-equipped phone and a full-fledged iPod. The SYNC treated it as both, simultaneously.

I found the voice-command system surprisingly reliable. In four days of testing, I encountered only a few instances in which my commands were misunderstood.

SYNC has some limitations. While it can read text messages on compatible phones, Ford didn’t build in the ability to dictate and send text messages. You can send only canned messages, like “Be there in 20 minutes.”

But there are a lot of advanced features — too many to list here. And Ford plans to add others, which owners will be able to install at home. Detailed information on the system is available at syncmyride.com.

Alas, I did discover one glitch. Twice during my testing, SYNC mistakenly declared that a music player had been unplugged when it hadn’t been. The system recovered with a little fiddling, but Ford needs to fix this.

Still, SYNC is a very well done method for integrating digital devices into a car, and in a model that most people can afford.

Email me at mossberg@wsj.com. Find all my columns and videos online free at the new All Things Digital web site, http://walt.allthingsd.com.