Touting "well over 100 new features", Jobs said the new product marks the iPhone's biggest leap forward since it launched in 2007. While two years ago the iPhone 3G and the App Store were big news, and last year the iPhone 3GS touted speed as its biggest feature, 2010's new iPhone includes an all-new design, an HD screen, video calling, a gyroscope, a new iMovie app, and countless other upgrades.
Due to go on sale in the UK on June 24, Jobs described the iPhone 4 as "beyond a doubt, the most precise thing and one of the most beautiful things we've ever made. Precision on this thing… it's closest kin is like a beautiful old Leica camera". The iPhone 4 is glass on the front and back and has stainless steel around the edge.
There are new volume buttons, while the Micro SIM tray has been moved to the side. Also new is a noise-cancelling mic on the top. It's also thinner than previous models - at 9.3mm thick, the iPhone 3 is 24 percent thinner than the iPhone 3GS.
As expected, new features include a front-facing camera to enable smooth video calling, and a camera with LED flash on the back. You can use the front or rear camera for the video call and you can switch back and forth.
Meanwhile, the iPhone 4 camera uses a "backside illuminated sensor" that's designed to improve low-light photography. In another big breakthrough, the camera captures 720p HD video at 30 frames per second.
Video enthusiasts are further provided for with the arrival of Apple's video-editing software iMovie for the iPhone. The app promises to provide a full video-editing experience with themes, transitions and titles. Users can record directly into a timeline or choose from existing clips and photos.
One of the big new features is a new retinal display offering 326 pixels per inch - four times as many as on the iPhone 3GS. Jobs said this enables extemely sharp text to be displayed. Its 3.5in provides 960x640 resolution and 800:1 contrast ratio. The screen uses the IPS technology included in the iPad, so should provide great colour and wide viewing angles.
As well as improving the display, Apple has invested much-needed resources in boosting the iPhone's battery life. Talk time increases from five hours to seven hours, 3G browsing is six hours, while Wi-Fi browsing lasts ten hours. The iPhone 4 can also last for ten hours of video, 40 hours of music or 300 hours of standy, according to Apple's figures.
Brand-new to the iPhone 4 is a gyroscope, providing six-axis motion sensing, which should give games developers in the WWDC audience something to play with. The gyroscope joins four other sensors in the iPhone: accelerometer, compass, proximity sensor, ambient light sensor.
Jobs demonstrated the new gyroscope feature by playing Jenga
Jobs also spent some time discussing Apple's position in the smartphone market, referring to recent figures claiming Google Android had overtaken the iPhone in US market share.
He showed Q1 2010 figures from Nielsen that ranked Apple the second largest smartphone maker in the US, behind BlackBerry-maker RIM.
According to Neilen, RIM had 35% of the market, iPhone was second with 28%, Windows Mobile accounted for 19%, and Google Android was fourth with 9%. Jobs said that, according to Neilsen, the iPhone's market share was over three times that of Android and it had an even bigger lead in terms of mobile web usage. Jobs said the iPhone had 58.2% of the entire mobile browser usage in the US - two and a half times as much as Google Android, at 22.7%.
The App Store is another area in which Apple claims market leadership. It now hosts over 225,000 apps, with 15,000 new apps submitted every week, Jobs said. Apple's CEO added that 95% of all submitted apps are approved within seven days and that, as of last week, more than 5 billion downloads have been made from the App Store. New apps on show at the WWDC keynote included Netflix, Farmville and Guitar Hero.
Apple's WWDC is attended by over 5200 attendees, with developers from 57 different countries buying this year's available tickets in just eight days.