Jobs has admitted that the iPhone's Edge technology is not ideal for web connections.
"Where you wish you had faster speed is on a web browser," Jobs told The Wall Street Journal.
"Edge is good enough, but you wish it was a little faster and that's where sandwiching Edge with Wi-Fi really makes sense because Wi-Fi is much faster than any 3G network."
The iPhone model that starts selling today at 6pm will automatically switch from the Edge network to a Wi-Fi connection when a trusted access point is detected.
Jobs said he chose Edge for the iPhone because every AT&T BlackBerry gets its mail using that connection, and that it works well for " maps and a whole bunch of other stuff".
Jobs blamed the iPhone's lack of 3G connection on the electronics needed to power the service, which use too much power and take up too much space.
"We cared a lot about battery life and we cared a lot about physical size," he said. "Down the road, I'm sure some of those tradeoffs will become more favourable towards 3G but as of now we think we made a pretty good decision."
In the run up to today's launch Jobs has stated publicly that Apple will give every one of its 20,000 employees an 8GB iPhone.
At the retail price of US$599, that comes to US$11.98m in total lost sales of the much sought after phone.
Jobs hints at 3G iPhone
By Matt Chapman on Jul 2, 2007 2:55PM