Following Apple’s second quarter earnings report on Wednesday, American Technology Research analyst Shaw Wu remains confident that the company is preparing to launch a 3G version of its popular iPhone during the World Wide Developer Conference in June. Along with the new 3G version, Apple could also launch an updated version of the current iPhone model, too.

"What gives us higher conviction in this timetable is that iPhone inventory levels remain fairly lean, which is consistent with Apple’s tendency to wind down inventory ahead of an update," Mr. Wu said. "We believe Steve Jobs will likely unveil these new iPhones at his WWDC keynote in early June."

If Apple rolls out revisions to the current iPhone model, it will likely make some minor changes to the unit’s case and also lower the price point from $399 down to the $299 to $349 range.

The launch of the 3G iPhone, however, could hit some snags considering AT&T is still working on its broad 3G rollout in the United States -- a process that could take longer than expected.

AT&T is also dealing with the heavy burden iPhone users are putting on its EDGE data network. "We have been told that iPhone users are consuming ’well over’ 100MB per month, compared to Blackberry around 10 MB. The relative economics to the carrier is unfavorable with actually lower net revenue while using considerably more network resources," he said.

Looking forward, Mr. Wu thinks Apple is still on track to sell 10 million iPhones by the end of 2008. In fact, he is modeling above Apple’s expectations at 11 million because of new iPhone features that are on the way.

He commented "We believe we will likely see an acceleration in iPhone adoption in [the second half of 2008] and beyond with native Exchange support, more carriers, 3G, and lower-cost models. iPhone is a relatively minor contributor today at only two to three percent of revenue, but we believe has the potential to become a very significant driver over the next two to five years."

Mr Wu is maintaining his "Neutral" rating and $175 target price for Apple’s stock. Apple is currently trading at $164.7938, up 1.9038 (1.17%).