By Scott Hillis

SAN FRANCISCO (Reuters) - Apple Inc on Monday unveiled a next-generation iPhone with faster Internet access that runs on advanced wireless networks, and cut the price of entry-level units by half.

But shares of Apple, which have gained about 50 percent in the last three months, fell nearly 4 percent as Chief Executive Steve Jobs confirmed the new iPhone’s release.

“It’s amazingly zippy,” Jobs said, showing off the highly anticipated encore to the device that melds a mobile phone, iPod media player and Web browser, which will now come in black and white.

The new entry-level iPhone will cost $199 with 8 gigabytes of memory, compared with the $399 price of the older-generation phone with similar memory. A new device with twice the memory will cost $299 and go on sale in 22 countries on July 11.

The new iPhone will run on third-generation (3G) wireless networks and includes satellite navigation capability, Jobs told developers at a conference in San Francisco, about a year after the original iPhone went on sale.

Apple has sold 6 million iPhones, Jobs said, and analysts say the business could eventually match the size of its Macintosh computer or iPod media player businesses.

Apple shares were last trading at $178.79 on Nasdaq.

(Editing by Maureen Bavdek and Braden Reddall)