Battery Boosts iPhone Life

Apple (AAPL) covered one possible Achilles heel of its iPhone.

The company announced Monday that its engineers have extended the iPhone's ability to sustain active use of its key applications, including making calls, surfing the Web and playing music and videos.

Apple initially said most of these functions would endure five hours of active use. Music playing time was estimated at 16 hours. According to today's announcement, the iPhone will have eight hours of active talk time, six hours of Internet use, seven hours of video playback and 24 hours of audio playback.

Shares of Apple gained $3.73, or 3.1%, to $124.23 midday Monday.

Improving the iPhone's battery life addresses a key weakness that competitors and critics have leveled in the run-up to the device's launch. Apple has touted the pricey iPhone as a multifunctional device that lets users enjoy the best of its iTunes portable music service, view videos on a larger screen and stay connected to the Internet and email when on the go.

A short battery life would undermine these claims and diminish buyers' willingness to pay $499 for the base model or $599 for more memory to store music and video files. This is much more expensive than most multimedia phones available in the U.S. today.

"From our sources in supply chain, there's been considerable concern with battery life for some time," says Shaw Wu, an equity analyst with American Technology Research. "This definitely appeases the fear that battery life would be a hindrance" to performance, customer satisfaction and, ultimately, sales.