SAN FRANCISCO, California (AP) -- Apple Computer CEO Steve Jobs on Tuesday made the company's long-awaited jump into the mobile phone business, unveiling a gadget that's controlled by touch, plays music, surfs the Internet and runs the Macintosh computer operating system.

Jobs also renamed the company "Apple Inc." to reflect its increasing focus on consumer electronics.

The iPhone, which starts at $499, will "reinvent" the telecommunications sector and "leapfrog" past the current generation of hard-to-use smart phones, Jobs said. (Watch Jobs make a call on the iPhone Video)

"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."

Jobs also unveiled a TV set-top box that allows people to send video from their computers to their televisions.

Jobs demonstrated the phone's music capabilities by playing "Lovely Rita, Meter Maid," from the Beatles' "Sergeant Peppers Lonely Hearts Club Band," as the album's psychedelic album art graced a wide-screen monitor.

IPhone uses a patented touch-screen technology Apple is calling "multi-touch."

"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 your media -- movies, music, photos -- through Apple's iTunes Music Store. The device also synchs e-mail content, Web bookmarks and nearly any type of digital content stored on your computer.

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

The phones, which will operate exclusively on AT&T Inc.'s Cingular wireless network, will start shipping in June. A 4-gigabyte model will cost $499, while an 8-gigabyte iPhone will be $599, Jobs said.

IPhone is less than a half-inch thin -- less than almost any phone on the market today. It comes with a 2-megapixel digital camera built into the back, as well as a slot for headphones and a SIM card.

In a demonstration Tuesday, Jobs slid his finger across the display to reveal a home screen and then scrolled through a list of songs.

To make a call, users can tap out the number on an onscreen keypad or scroll through their contacts and dial with a single touch.

Apple is also introducing what it calls "visual voicemail," so users can jump to the most important messages rather than have to listen to all of them in order.

The phone supports Wi-Fi and Bluetooth wireless technology and can detect location from Global Positioning System satellites. It also can send and display e-mail and text messages. Apple is partnering with Yahoo Inc. on Web-based e-mail and Google Inc. on maps.

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.
Apple TV

Jobs also said the company will begin taking orders Tuesday for $299 video box, called Apple TV. It will be available in February.

The gadget is designed to bridge computers and television sets so users can more easily watch their downloaded movies on a big screen. A prototype of the gadget was displayed 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 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.

Jobs also said Apple has sold more than 2 billion songs on its popular iTunes music download service, catapulting the company into the top ranks of music sellers worldwide.

Apple, which sells 58 songs per second, or 5 million songs a day, sells more songs than Amazon.com and ranks behind only Wal-Mart, Best Buy and Target as a music retailer.

"We couldn't be happier with the growth rate of iTunes," Jobs said.

He said Apple will sell digital movies from Paramount. Apple has partnered with Disney for several months, offering about 100 movies on iTunes. With Paramount's selection, it will have 250 movies available for downloading on the site.

With Tuesday's launches, it remains to be seen whether the leading seller of digital music players can colonize an entirely new category of gadgets. Apple could use a megahit along the lines of its iconic iPod to divert investors' attention from the stock options-backdating scandal that has tainted its reputation.

The backdating of stock options, which has been widespread among Silicon Valley companies, involves pegging stock options to favorable grant dates in the past to boost the recipients' award. It isn't necessarily illegal, but securities laws require companies to properly disclose the practice in their accounting and settle any charges that may result.

In a December filing with the Securities and Exchange Commission, Apple said Jobs was aware of, or recommended the selection of, some favorable grant dates but he neither benefited financially from them nor "appreciated the accounting implications."

I wonder how long the battery life would be..

I'd be scared to drop it LoL

a lot of my friends have said they want one, but I dont think I'll be spending my money on it. what about you guys?

I wouldn't buy it right when it comes out b/c there'll probably be so many bugs and things wrong with it like all the ipods.

^ditto! i'll be buying the 2nd gen version.

looks like a pretty awesome phone...the only thing is, they might have to change the name because it's already trademarked in the US to Cisco who just recently announced a Skype-compatible Voice over IP phone under that very name.

For more info:

thus apple is getting sued over this name.......i wonder who will win.....

I was talking to ym friend about this and it's an touch screen...and we both agreed, Screen gets broken YOUR SCREWED. I skimmed through the tech section on 24, and i THINK it said that Rogers is the only company that will get the Iphone because of the compadability? I could be wrong since i skimmed through it...

I also learned that the cheapest one is going to start at $500 USD and the modle that's one up is $600 USD. That's a pretty pricey phone!

For more info on this phone check out this informative video brought to you by our good friends at SNL

500$USD doesnt seem THAT bad to me.
considering i spent 540$CAD on a USED sony ericsson w900i a month ago. and its so chunky too, regret it

I heard it's only going to be available on a Rogers contract in Canada. That sucks!!! I wonder if they will allow Fido users to have one since they are the same company.

The 3g iphone is coming to canada july 11 2008, and it's only going to cost 199$-8gb 299$-16gb!! Rogers and Fido will have them!I am sooo getting one!

wow $199 is good! considering u can use GPS, wi-fi and tons more :D