Apple CEO Unveils iPhone, Apple TV

Apple Computer CEO Steve Jobs on Tuesday made the company's long-awaited jump into the mobile phone business and renamed the company to just "Apple Inc.," reflecting its increasing focus on consumer electronics.

The iPhone, which starts at $499, is controlled by touch, plays music, surfs the Internet and runs the Macintosh computer operating system. Jobs said it will "reinvent" the telecommunications sector and "leapfrog" past the current generation of hard-to-use smart phones.

"Every once in a while a revolutionary product comes along that changes everything," he said during his keynote address at the annual Macworld Conference and Expo. "It's very fortunate if you can work on just one of these in your career. ... Apple's been very fortunate in that it's introduced a few of these."

He said the name change is meant to reflect the fact that Apple has matured from a computer manufacturer to a full-fledged consumer electronics company.

"I didn't sleep a wink last night," he said. "I was so excited."

Apple TV, as the company's latest product is known, is designed to bridge computers and television sets so users can more easily watch their downloaded movies on a big screen. It will allow users to buy movies and TV shows from iTunes, download them from the Internet and view them on big screen high-definition TV, reports CBS News correspondent John Blackstone.

Apple TV will come with a 40-gigabyte hard drive that stores up to 50 hours of video. It features an Intel Corp. microprocessor and can handle videos, photos and music streamed from up to five computers within the wireless range.

A prototype of the gadget was introduced by Jobs in September when Apple announced it would sell TV shows and movies through its iTunes online store.

The product could be as revolutionary to digital movies as Apple's iPod music player was to digital music. Both devices liberate media from the computer, allowing people to enjoy digital files without being chained to a desktop or laptop.

"It's really, really easy to use," Jobs told the crowd at San Francisco's Moscone Center before demonstrating the system with a video clip of "The Good Shepherd." "It's got the processing horsepower to do the kinds of things we like to do."

Apple has partnered with Disney for several months, offering about 100 movies on iTunes. Jobs announced Apple will also sell digital movies from Paramount, which will add another 150 titles available for downloading on the site.

In introducing Apple's highly anticipated button-less iPod cellphone, Jobs says it will "leapfrog" past the current generation of hard-to-use smart phones.

The iPhone, capable of downloading and playing music — really a computer running Apple's OS X operating system, running full desktop applications like the Safari web browser — is thinner than almost any phone on the market today: 11.6mm. It will be a widescreen iPod and Wi-fi Internet access device with a 3.5-inch diagonal screen, as well as cell phone with a 2 megapixel camera built into the back, as well as a slot for headphones and a SIM card.

"It's just like an iPod," Jobs said, "charge and synch."

iPhone uses a patented technology Apple is calling "multi-touch," a blank screen that users configure with easy-to-use software so they can touch the monitor with their fingers.

"We're going to use a pointing device that we're all born with," Jobs said. "It works like magic. ... It's far more accurate than any touch display ever shipped. It ignores unintended touches. It's super smart."

The phone automatically synchs the owner's media — movies, movies, photos — through Apple's iTunes digital content store. The device also synchs e-mail content, Web bookmarks and nearly any type of digital content stored on your computer. Users can also manipulate photos on screen just by touching and dragging.

"Basically, phones that do everything the Apple phone does and more — smart phones — are all over the Consumer Electronics Show. But Apple does things with panache," CBS News technology analyst Larry Magid said.

With a few finger taps, Jobs demonstrated how to pull up a Google Maps site and find the closest Starbucks to the Moscone Center. He then prank-called the cafe and ordered 4,000 lattes to go before quickly hanging up.

"My initial reaction is that this product actually lives up to the extensive hype, and I'm not easily impressed," said Avi Greengart, mobile device analyst for the research firm Current Analysis.

"Many of the devices on the market today have Internet access and play music, but they are difficult to use, so sometimes people don't use them," Magid said. "This appears to be an intuitive device that tries to adapt itself to what the user tries to do. And it is pricey, but a lot of Apple products are pricey, and people still buy them."

Yahoo will provide free email service to all iPhone users. The phone will work with most e-mail and with Google Maps. The exclusive iPhone service provider will be Cingular.

Jobs demonstrated the phone's music capabilities by playing "Lovely Rita, Meter Maid," from the Beatles' album "Sergeant Pepper's Lonely Hearts Club Band."

Jobs says Apple has applied for more than 200 patents for technology in iPhone, which will cost $499 for model with 4Gb of flash memory and $599 for an 8Gb version, and will be shipped in June.

Apple will begin taking order Tuesday for Apple TV ($299), and the devices will be available in February.

In his opening remarks to the annual Jobs said that iTunes has now sold 2 billion songs. That makes Apple — which sells 58 songs per second, or 5 million songs a day — the 4th largest music seller, ahead of Amazon.com and only behind WalMart, Best Buy and Target.

Jobs also said that iPod has 62 per cent market share in music players.
"We couldn't be happier with the growth rate of iTunes," Jobs said at the start of his annual keynote at the Macworld Conference & Expo here.

Apple's shares were up as much as 8.5 percent on the news.

Sam Rahman, a portfolio manager at Baring Asset Management Inc., which owns Apple shares, said the iPhone and AppleTV could prove to be big boosts for the company.

"Right now the stock is trading on product announcements," he said. "It could drive additional growth for Apple at a time when they need to find another hit beyond the iPod."