On July 11 Australians will be able to buy the fastest and most functional Apple iPhone to run on the Optus and Vodafone 3G networks.

New iPhone 2.0 software will run applications from Apple's iWork suite and Microsoft Office, while the phone can download and install third party applications via 3G High Speed Downlink Packet Access (HSDPA) networking that Apple claims will be twice as fast as the first generation iPhone.

The 3G iPhones will arrive with built-in GPS functionality for expanded location based mobile services, and will cost US$199 for an 8GB version or US$299 for a 16GB model in the US.

Details of Australian pricing and plans will be announced by carriers at a later date, but Optus is offering a refundable $50 holding deposit in the meantime.

The battery has been boosted to support an impressive 10 hours of talk-time, double the first generation, with a minimum five hours of continuous browsing time and 300 hours of standby.

Optus CEO Paul O'Sullivan said its 7 million customers will be able to use the iPhone on the 3G network across 98 percent of Australia by the end of the year.

"iPhone 3G is the handset Australians have been waiting for," O'Sullivan said.

But Nathan Burley, an analyst at global consulting firm Ovum, said the iPhone will be inoperable with Vodafone and Optus 3G networks.

"Although Vodafone and Optus are expanding their 3G networks in the 900MHz frequency band, the iPhone 3G will not support these networks," Burley said.

"Coverage will be limited to existing 2100MHz 3G coverage - outside these areas GPRS data performance will leave users more than unsatisfied.

"The device does support Telstra's Next G network but as yet, Telstra has not announced it will be offering the device."

The 3G iPhone will be available in black or white.