While Thursday's launch is likely to lack the same fanfare as the iPhone's original launch in the US last year, its effects could be longer-lasting, both for Apple and its network partners.

"We're probably not going to see the same circus atmosphere, but this is arguably the more important device," says Michael Gartenberg, an analyst at Jupiter Research.

This time around, Apple and its partners are targeting a much broader geographic market.

The new handset is set to launch in 20 major markets compared to the six, including the US, UK, France and Germany, where the first generation handset was sold. For example, it will be sold in Asia for the first time, in Hong Kong and Japan.

Perhaps just as important, Apple is attempting to build on the iPhone's success as the "on-ramp" to the mobile internet.

The original iPhone helped convince sceptics that the market for the mobile internet and more specifically wireless data services is both real and growing.

"The iPhone has been a game-changing device," says Ralph De la Vega, president of AT&T's mobile unit, which is the exclusive iPhone network in the US. According to Mr de la Vega, 95 per cent of existing US-based iPhone owners regularly use the device to browse the web, even though 30 per cent had never done so before owning the handset, and 51 per cent have viewed YouTube videos on it.

Apple and its partners have tried to remove many of the barriers that limited the appeal of the original iPhone.

Most significantly, they have changed the iPhone business model, abandoning a relatively high upfront retail price for the subsidised handset arrangements prevalent in Europe and the US.

Apple is also no longer demanding that network operators hand over some revenue from iPhone customers to the US technology company.

This switch will enable the network operators to offer the iPhone at a starting price of $199 with a two-year contract or less in some of the 20 markets - a price drop that could bring the device one step closer to breaking through as a mass-market handset.

In the UK, the 3G iPhone will be available for £99 ($196) with O2, the mobile network owned by Spain's Telefonica - compared to £269 for the 2G device.

"All of a sudden, in the consumer market, you get a significant degree of the population now experiencing a true internet and true mobile data experience on their mobile phone," says Matthew Key, chief executive of O2 Europe, highlighting how greater use of the wireless internet could fuel the potentially lucrative mobile advertising market.

For the mobile operators, the introduction of hefty 3G iPhone subsidies - estimated by some analysts to be $350 per handset - will hit margins and profits in the short-term.

But most analysts believe the significantly lower up-front cost of buying a 3G iPhone, coupled to the faster web browsing speeds available with the new device compared to the 2G handset, may well tempt consumers who might otherwise have opted for rival products.

Therefore the 3G iPhone should enable Apple to pass its target of selling 10m handsets by the end of 2008.

For Apple, the launch of the 3G iPhone is just one part of a wider strategy designed to create a new type of computing platform with broad appeal to both consumers and corporate users.

Alongside the 3G iPhone launch, Apple will also unveil a software development kit that will allow programmers to create games and other applications to run on the handset.

It will also launch a software update designed to make the iPhone more appealing to corporate users by including support for Microsoft Exchange, a popular business e-mail service.

The update will also include the ability to remotely wipe an iPhone's hard drive - an important security feature for company IT departments.