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Does anyone know if this is 3G compatible or not?
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Yes, it's the workaround for people with 3g. This is a huge problem and all over the Apple forums. We should be seeing a slew of "converters" or "adapters" to hit the market soon. From a business perspective this move to USB only benefits not only Apple, but the vendors that make the accessories.
We, the consumer, always get the sh!t end of the stick...