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The iPhone caused upheaval when it appeared two years ago, changing what people thought they could do with their mobile phones.
The ripples are still coming. It's not as earth shattering as before, but it's still significant - and not just for consumers. A number of companies and industries could be affected by last week's launch of the iPhone 3G S and the upgrade to the software that runs the family of iPhone and iPod Touch devices.

The iPhone's latest evolution could affect sales of navigation devices, camcorders and even its own sibling, the iPod Touch. It's expected to boost YouTube uploads, touch off a wave of new accessories and also affect some of its independent developers.

Last week, Apple released iPhone OS 3.0, a software update for the iPhone and iPod Touch. The update included the ability for developers to integrate turn-by-turn navigation services using the Global Positioning System chip on the iPhone 3G and 3G S.

Analysts believe that should undercut sales of dedicated personal navigation devices, which have slowed considerably in recent months.

"We might see more cannibalization of PNDs at the higher end of the market with devices that offer real time traffic and weather and two-way information," said Ross Rubin, analyst with the NPD Group. "Clearly the iPhone has an inherent advantage because it's a two-way device."

Personal navigation device manufacturers acknowledge that equipping the iPhone with turn-by-turn directions will cut into sales. Some, like Magellan, believe there is plenty of room in the market for robust smart phone navigation services. TomTom, another PND manufacturer, is hedging its bets by developing an iPhone application and an iPhone car kit, which will both be out this summer.

"Naturally, some consumers will opt to use the iPhone for navigation exclusively," said Tom Murray, vice president of market development for TomTom. "But as more consumers demand navigation and want to have that functionality in their smart phones, it only makes sense for TomTom to participate in this opportunity."

With the iPhone 3G S, another significant advancement is the inclusion of a video camera, along with slick editing features that allow users to trim clips right on the phone. Users can capture video and easily upload it to YouTube.

While there are already many cameras and phones that enable easy uploading to YouTube, the iPhone's ease of use and editing functions may spur a wave of video capturing and sharing. That could affect dedicated camcorder sales as well as prompt a whole lot of YouTube uploading, said Avi Greengart, research director for Current Analysis.

"It's no question there are other devices that allow you to upload video to YouTube, and yet as we see on the photo side or with the mobile Web statistics, iPhone users just do things more," he said.

Indeed, a Nielsen study last year found iPhone users were 10 times more likely to view video, five times more likely to surf the Internet and nine times more likely to play games on their iPhone than average mobile users.
YouTube welcomes changes

A YouTube spokesman said the company welcomes anything that helps users more easily share their thoughts and experiences via video.

To be sure, dedicated devices will have their place; witness the enduring success of Apple's iPod line even with the release of successive iPhones. Dedicated devices often offer a fuller set of features or better performance without the hassle of a wireless subscription.

Still, even the iPhone 3G S, with its $199 and $299 price for 16- and 32-gigabyte models, could affect sales of its sibling the iPod Touch, which sells for $229, $299 and $399 for 8-, 16- and 32-GB versions, said Rubin. That is at least until Apple either adjusts the price of the iPod Touch or packs in more storage and features.

"We have seen a price-features gap between the iPhone and iPod Touch before and the iPod Touch has still done very well," Rubin said. "But now, the gap is even larger."

The biggest impact could come with the iPhone OS 3.0's ability to allow developers to create hardware accessories that communicate back and forth with the iPhone. That creates the opportunity for a wide array of devices, sensors and controllers that can easily attach to the iPhone and utilize its hardware.
Monitoring blood sugar

A small attachment can turn the iPhone into a blood sugar monitor, a television remote or a garage door opener. At the recent Worldwide Developers Conference, developers showed off remote patient monitoring apps for doctors and a music editing program.

The improvements to the platform are also affecting some loyal iPhone app developers. Retronyms, a San Francisco software company that rode its Recorder voice memo application to big sales last year, now faces competition from Apple, which included its own free voice memo app as part of the iPhone OS 3.0 upgrade.
Retronyms challenged

Dan Walton, co-founder of Retronyms, said he doesn't begrudge Apple for filling what was a clear hole in the original iPhone offering. He said he hopes to improve Recorder and position it as a premium app with more functionality.

"We feel that Apple has helped us build our company," Walton said. "But this is always the case with any platform whether it's the PC or something else. You have to be concerned if the platform decides to build what you're building."