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The 3G iPhone will be the "first of an impressive wave of new products" from Apple, wrote Citi analysts Richard Gardner and Yeechang Lee. They also expect an updated Mac laptop and iPod lines. The Apple conference is scheduled for June 9-13 in San Francisco.

In addition to a 3G iPhone release in early June, the 2.5G model could have a "minor casing change" and a price drop to between US$299 and $349, compared to the current $399, wrote Shaw Wu, an analyst with American Technology Research, in a research report.

Those predictions are consistent with a February prediction Gardner made that 3G iPhones will be announced by midyear. The 3G iPhone release will help Apple meet its target of shipping 10 million iPhones in 2008, Gardner wrote at the time.

Apple is confident it will sell 10 million iPhones this year, officials said during a conference call on Wednesday to discuss the company's second-quarter earnings.

When asked about the possible release of a 3G iPhone, Apple Chief Financial Officer Peter Oppenheimer declined comment. Apple has new products in the pipeline that the company is excited about, Oppenheimer said.

Apple sold more iPhones than expected during the quarter and iPhone inventories were not enough to meet the strong demand, company officials said. Apple acknowledged that aggregate iPhone inventories were low in the U.S. and Europe, which in the past has led to speculation that Apple is reducing current iPhone supplies to prepare for the release of the 3G iPhone.