(CBS) The new Apple 3G iPhone has received a lot of attention, but the more important story isn't the new hardware, but Apple's application store and the many programs that run on the new phone.

Thanks to a few of those programs there's an even larger story - the iPhone may fundamentally change the way people listen to the radio when they're in their cars or otherwise on the go.

Two free applications for the iPhone and iPod Touch, and another program that costs only $4.99, make it possible to listen to live radio on the iPhone from anywhere, including a moving car.

Unlike those pre-TV days when families sat around a big radio console in the living room, a lot of people now listen to radio mainly when they're on the move. Internet radio has been around for more than a decade, car radios were introduced in the 1930's and portable transistor radios became available in the 1950s.

Until now, live radio pretty much meant listening to a broadcast station with transmitters relatively nearby. But with the iPhone you can listen to stations from around the world, including some that broadcast only on the Internet and don't even have transmitters.

Over time, this could be as disruptive to the radio broadcast industry as the Web has been to print. That's not to say that major broadcast organizations (including CBS, which owns CBSNews.com and for which I serve as technology consultant) can't survive in the age of mobile Internet radio, but it does mean they will face competition from new players, including startups operating from peoples' spare rooms.

There are at least three "live radio" software applications available, not only for the new iPhone, but for the older iPhone and the iPod Touch that have been updated with Apple's new 2.0 software (free for iPhone users and $10 for iPod Touch users). Two of the programs: AOL Radio and Pandora are free while Tuner costs $4.99.

AOL Radio "Powered by CBS Radio" allows you to listen to more than 150 CBS music, news, talk and sports stations across the United States, as well as customized stations created specifically for online listening. By default, it uses the iPhone or iPod Touch's location awareness capabilities to play stations in your area, but you can also use it for out-of-town stations.

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Podcast: Larry Magid and San Jose Mercury News reporter Troy Wolverton use the new iPhone to listen to live radio from New York and Jamaica as they drive around Silicon Valley, Calif.

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Pandora doesn't carry broadcast stations but allows users to create their own music programming by selecting their favorite artists or genres. It's a very creative concept that can result in programming that is highly customized yet, unlike listening to your own MP3 files, still gives you the serendipity of not knowing which song will come next.

The other program, called Tuner, lets you select from thousands of Internet stations around world or type in the URL of any station that may not be included in its rather exhaustive list.

Assuming you have a good Internet connection, the sound quality from any of these programs is generally quite good.

With San Jose Mercury News technology reporter Troy Wolverton at the wheel, I plugged the iPhone into the auxiliary jack of his car radio while we drove around the San Jose, Calif. area listening to WCBS Newsradio from New York, a radio station from Kingston, Jamaica and a customized channel through Pandora.

Even at 66 miles an hour on U.S. Highway 101, the sound was better than what you'd expect from a clear FM signal. I also tuned into my local KCBS news station where the sound quality was definitely better than the station's terrestrial AM signal.

The iPhone isn't the first device to bring Internet radio to people on the go. There is streaming radio software for Windows Mobile, Palm and Blackberry, but they haven't received widespread recognition.

Given the iPhone's popularity and the fact that you can get these stations free with the AT&T data plan, I expect this to become one of the more popular uses for the iPhone, especially for people who commute by car. And, unless car radio manufacturers and automakers have their heads in the sand, I wouldn't be surprised to see similar technology built into car audio systems.

If this does catch on, it could be incredibly disruptive to both the terrestrial and the relatively new satellite radio industries. With the Internet, stations no longer need transmitters, satellites or hard-to-get-FCC licenses to broadcast to mobile listeners.

Startups can now compete with major broadcast companies. Of course, having a delivery vehicle doesn't mean you have a good product or the ability to market it well but, as we've discovered with blogs and podcasts, new media technologies do enable some creative new players to succeed while giving incumbent players - including CBS and other broadcasters - the opportunity to take advantage of new distribution systems.

Either way you look at it, the landscape will change.