Apple Faces Cold Christmas

Brace for more disappointments ahead in the Apple (AAPL) iPhone saga.

Fans have been dreaming of a 3G Christmas. But observers are saying Apple probably won't be offering the faster wireless version of the iPhone this year.

"I don't think we'll see it until the first or second quarter of next year," IAG Research's Roger Entner says of the third-generation wireless iPhone, which would provide speedier Web access than current versions.

Apple says it doesn't comment on rumors. But this new slant on the holiday product picture emerges just as Apple is taking some heat over its handling of iPhone pricing.

CEO Steve Jobs gave a presentation Wednesday announcing, among other things, that the company was killing the 4-gigabyte iPhone and slashing $200 off the price of the remaining 8-gigabyte phone. The decision to drop half the iPhone lineup validates rumors reported July 31 by TheStreet.com that Apple was cutting production in half.

Last week's price cut decision was so abrupt that Apple's exclusive wireless partner, AT&T (T), learned of the changes during Job's speech, say sources.

The jarring price cut by Apple and the predictable backlash managed to take management by surprise. Jobs quickly backpedaled, apologizing to customers and offering iPhone buyers a $100 store credit.

So now, after two months of essentially overcharging eager gadget lovers for a 2.5G EDGE phone, Apple will not be able to reward loyal holdouts who had been waiting for a full-speed version of the iPhone this year, say observers.