Apple unveils long-awaited iPhone, set-top TV system

SAN FRANCISCO -- Steve Jobs made it official yesterday: His company is no longer Apple Computer Inc. but simply Apple Inc.

Jobs made the pronouncement at the annual Macworld trade show, where the company already better known for iPod portable music players than its Macintosh computers unveiled two devices -- a digital entertainment server for the TV and a radical music player and telephone -- that could complete Apple's transition from computer company to America's leading consumer electronics manufacturer.

"You're looking at the birth of the next Sony," said James L. McQuivey, professor at Boston University's College of Communication. "That's what their ambition is."

In perhaps the clearest evidence of Apple's growing clout, the company said its new products are backed by alliances with some of the world's biggest communications and entertainment companies. When Apple began selling movies online last year, only the Walt Disney Co., where Jobs sits on the board, was willing to play along. Yesterday, Jobs said Viacom Inc.'s Paramount Pictures would make over 100 of its titles available for iPod, iTunes, and Apple TV, and McQuivey predicted other studios would soon hop onto the bandwagon.

But the Apple TV was overshadowed by the Apple iPhone, a single-button touch-screen device which Jobs declared would "reinvent the phone."

"Every once in a while a revolutionary product comes along that changes everything," the company's chief executive 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."

The iPhone will be sold exclusively by AT&T Inc.'s wireless provider Cingular, which worked with Apple to design features such as a displays of voice mail messages that lets the user listen to them in any order.

The chief executive of Cingular, Stan Sigman, was on hand to gush over the new phone. "Every time I see this, it's just wow," Sigman said. "It's really, really cool."

Just as effusive were the chieftains of the most powerful companies on the Internet -- Google Inc. and Yahoo Inc., both of which collaborated with Apple to provide services through the iPhone. Google chief executive and Apple board member Eric Schmidt appeared with Jobs to showcase a service that puts Google's popular online mapping service onto the Apple phone, allowing users to see satellite images of any spot on earth.

And Yahoo cofounder Jerry Yang joined Jobs to showcase a feature that delivers Yahoo Mail messages to users of the Apple iPhone free of charge.

The new products came as no surprise to Apple-watchers. Indeed, Jobs previewed the entertainment server last year under the name iTV. And rumors that Apple was working on a combination iPod player and cellphone have been circulating for a couple of years. Nevertheless, the official launch of the products boosted the company's stock price 8 percent yesterday, to $92.57.

The iPhone bears little resemblance to any other phone -- or to Apple's trademark iPod music players. It has just one pushbutton. Nearly everything else is controlled by touching icons that appear on the phone's large video screen. But there's no need for a plastic stylus used in many other portable touch-screen devices. Apple invented a new technology that accurately recognizes touches from human fingers. "It's far more accurate than any touch display that's ever been shipped," said Jobs. "And, boy, have we patented it." Jobs said Apple has filed 200 patents on technologies it invented for use in the iPhone, which will sell for $499 for a version with four gigabytes of memory, or $599 for eight gigabytes . Jobs said the iPhone will go on sale in June, pending testing and approval by the Federal Communications Commission. He said that Apple has set a goal of selling 10 million by 2008.

The phone has a 2-megapixel camera and is designed to share information with Windows or Macintosh computers -- not only phone numbers, but photos, videos, and of course music, and it has built-in WiFi wireless networking . The iPhone's built-in browser is capable of showing Web pages just as they appear on a standard computer monitor. To zoom in on a particular part of the page, the user just taps it with a finger.

"All of the technical pieces add up to a device that works really well, that's a pleasure to use," said Charles Golvin, principal analyst for Forrester Research in Cambridge, who had a chance to try out the iPhone.

The set-top server, renamed Apple TV, is set to go on sale next month for $299 and resembles Apple's smallest desktop computer, the Mac Mini. The Apple TV box contains a 40-gigabyte hard drive for storing music, movies, and photos. It also has jacks to feed entertainment to a home stereo or TV set, as well as WiFi wireless networking to allow up to five home computers to stream their contents into the box. A user can purchase a movie or TV show on their computer through Apple's iTunes online store, then have it sent automatically to the Apple TV box for viewing on the living room television.

For years, Microsoft has offered Windows Media Center, a system that brings similar features to computers running Microsoft's Windows operating system. And this week at the Consumer Electronics Show in Las Vegas, Microsoft chairman Bill Gates unveiled a new Windows server product that matches the capabilities of Apple TV. Nevertheless, McQuivey said Apple TV "absolutely steals Microsoft's thunder," because of Apple's reputation for making elegant products that are easy to use.

However, analyst Josh Bernoff of Forrester Research was skeptical about Apple TV's prospects. "I think the challenge here is that people don't generally buy a separate set top box unless it has an incredible capability," Bernoff said. Merely relaying Internet music and movie downloads probably won't be enough to make Apple TV a hit, he said.

Hiawatha Bray can be reached at bray@globe.com.