"In 2010 we're going to take the biggest leap since the original iPhone," Jobs said. "This is really hot."
iPhone 4 will be "the thinnest smartphone on the planet" at 9.3 mm thick -- 24 percent thinner than the iPhone 3GS, the company's current model.
The device will have a front-facing camera for video conferencing, and the camera on the back will have an LED flash, Jobs said.
The iPhone 4 will be redesigned with glass back and metal around the sides. "Just gorgeous. And it's really thin," Steve Jobs said.
Jobs also cited some statistics about mobile browser usage in the U.S. The iPhone has 58.2 percent of that market -- 2.5 times as much as Android's 22.7 percent.
"This may help you put things in perspective," he said, to some laughs. More than 5 billion apps have been downloaded from Apple's App Store, Jobs said. He drew cheers when he said that 70 percent of app sales goes to developers -- a total of $1 billion to date.
The company does not allow live video of its Worldwide Developers Conference, but you can follow the minute-by-minute action on our Twitter account, @cnntech.
Most of the anticipation about Monday's announcement has focused on new iPhone hardware.
Apple is known for its secrecy, but some tech bloggers have potentially spoiled the biggest reveal of this event by publishing details about a prototypical iPhone.
The phone may be available as early as this summer.
Blogs also report that the new iPhone could be called the iPhone 4 or the iPhone HD.
The new iPhone comes as Apple faces increasing competition from other smartphone makers. In many ways, the company has set the standard for what Internet- and app-enabled phones are capable of. But the Motorola Droid, Google Nexus One and Palm Pre all have proved to be decent competitors to the Apple iPhone in recent months.
In the first few months of 2010, phones running Google's Android operating system were more popular with consumers than those from Apple, according to CNET.
The BlackBerry, made by Research In Motion (RIM), is still the top-selling smartphone on the market. It is geared toward business clients and doesn't have all of the features that the touch-screen phones do.
The iPhone probably won't be the only topic of discussion at WWDC.
Expect the company to provide new details about the operating system -- or OS, in geek-speak -- that manages applications on the iPhone and iPad.
It's rumored that Apple could announce a breakaway from AT&T, the company that provides exclusive mobile service to the iPhone.
And, as Wired writer Brian X. Chen suggests, Apple may make an announcement about a new streaming-video functionality, which would make it easier and faster to view movies and online video on the go.
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