Apple iPhone here at last

In one of the most anticipated gadget announcements in recent years, Apple has introduced the "iPhone", a mobile device that CEO Steve Jobs promised will reinvent the phone.

The Mac OS X-based iPhone is most akin to an iPod in design but allows users to listen to music, make phone calls, send text messages and email, surf the web, and take and upload photos, all using a wide touch screen and a single button. Apple plans to make the device available in the US in June, with a 4GB model going for $499 with a two-year service contract, and an 8GB model with the same contract for $599.

The iPhone was announced at Macworld during a two-hour keynote in which Jobs also announced the expected Apple TV, previously known by its code name "iTV", as well as a name change for the company.

He surprised many by continuing to refer to the new mobile device as the iPhone, a trademark that is owned by Cisco Systems. Apple has apparently been in discussions with Cisco over use of the iPhone trademark for some time but it is unclear what Apple's use of the name will mean for either company.

The device is 11.6mm thick - thinner than the Motorola Q and Samsung's BlackJack - and has controls on its side. It incorporates a wide, 160-pixel-per-inch touchscreen, a single "home" button, 2-megapixel camera, wi-fi capability and cellular service. The phone automatically switches from a cellular network to wi-fi if it detects a signal.

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The iPhone also comes loaded with Apple's Safari web browser and fully incorporates Google's search and mapping services. Users can make phone calls directly from Google Maps. Phone service in the US will be provided exclusively by Cingular Wireless.

True to form, the company did not fail to consider consumers' habits with the product's design. A proximity sensor detects when the phone is brought to a user's face and automatically turns off what music might be playing and turns on the phone. An "accelerometer" switches the screen from a portrait to landscape format, allowing for easy toggling between the device's various functions.

The iPhone even reconsiders how consumers listen to voicemail - by allowing people to see all unheard voicemails and select which one to listen to using a technology Jobs called visual voicemail, which Apple developed with Cingular.

But Apple's iPhone isn't cheap, and some people who aren't on Cingular's network might be unable to switch without hefty penalties, said Samir Bhavnani, an analyst with Current Analysis. However, "it's a great first step" toward getting Apple established as a mobile-phone company, he said.

While the price tag might be out of range for many teenagers and their parents, Apple loyalists will probably be interested in the new iPhone, even though Apple has no phone expertise, said Chris Crotty, a consumer electronics analyst at iSuppli.

He said: "Apple has strong brands, and there is a perception that they are an innovator and that they make products that are easy to use."

With companies expected to sell more than one billion mobile phones and more than 200 million portable media players this year, Apple was wise to enter the market, according to Crotty, because "their iPod business is under threat more and more from music-capable phones".

It was unclear what effect the iPhone would have on the market share of existing mobile and handheld providers. Asked to comment on the Apple announcement, a Motorola spokesman said: "There's really nothing to say because the [Apple] phone is not out yet."

A Palm spokeswoman said the iPhone appeared to be targeting the consumer market rather than the business market at which similar products from Palm - like the $199 Treo 680 - are aimed.

Wall Street apparently likes the iPhone. The price of Apple shares increased 8.31 per cent on Tuesday and ended the trading day at $92.57.

Jobs also used his keynote to announce the Apple TV, a home networking device that he first mentioned at a product showcase in September 2006. The device lets users stream content from up to five computers, and "autosync" from one computer.

The $299 Intel-based device will have 720-pixel high-definition video and a 40GB hard drive to store up to 50 hours of video. It will use 802.11n, the new draft wi-fi standard. Apple began taking orders yesterday and will start shipping the product in February.

Finally, Jobs announced that the company is changing its name.

He said: "Today we've added to the Mac and the iPod; we've added Apple TV, and now iPhone. And the Mac is the only one you think of as a computer." To combat that, Jobs said, "we are dropping the 'Computer' from our name, and we will be known as Apple Inc".

CNET News.com's Elinor Mills contributed to this report

Jennifer Guevin writes for CNET News.com