As predicted, Apple revealed a new iPhone during its WWDC keynote today: the iPhone 3GS. It will be available through partner operators later this month.

Key new features include HSDPA connectivity, a faster processor, a three-megapixel camera, and the ability to shoot and edit videos. There's also a digital compass, and improved battery life,

The 3GS goes on sale on 19th June in two models - 16GB and 32GB retailing for $199 and $299 respectively in the US. As before, it'll be available in black or white versions. It will be sold alongside the existing iPhone 3G, whose price has dropped to $99 from today.

Apple also announced that its hotly-anticipated iPhone 3.0 software update will be available two days before the 3GS, on 17th June. It will be free for all iPhone owners, but will cost $9.95 for iPod touch users.

During the keynote, games firms Gameloft and ngmoco took to the stage, showing off Asphalt 5 and Star Defense respectively.

There is controversy brewing in the UK around the iPhone 3GS launch, however. Operator O2 has revealed that existing iPhone owners will have to pay to end their current contracts before being able to upgrade to the 3GS.

That means people who bought an iPhone 3G when it launched in July last year face a £200 upgrade cost plus the price of the  new handset.