Updated: In announcing Apple's first venture into the wireless marketplace, the iPhone, CEO Steve Jobs is also rebranding the company he founded with a name change that reflects its media focus.SAN FRANCISCO—Apple Computer CEO Steve Jobs has rarely failed to dazzle loyal customers during a keynote address.
And, at the 2007 Macworld Expo, Jobs even managed to go one better.
During his nearly two-hour address in San Francisco on Jan. 9, Jobs finally pulled back the curtain on the much-rumored, long-awaited iPhone. Rumors had been of a full-screen iPod, an Apple-branded phone, or some other Internet-aware mobile device. Instead, Jobs revealed a single device that subsumed all three descriptions.
Now with the iPhone to compliment a slate of consumer-driven products that includes a television and multimedia offering, the iPod music player and iTunes stores, Jobs also used this keynote to signal that Apple had now moved far beyond being a mere PC maker.
The companys official name —Apple Computer— is now gone. Instead, Jobs chose a much more encompassing name that signals the company will focus more on its burgeoning multimedia business – Apple Inc.
Indeed, none of the announcements Tuesday involved the companys once signature product, the Macintosh. The focus instead was on the iPhone.
Click here to read David Morgensterns take on the 2007 Macworld Expo.
"Current smart phones are not so smart and not so easy to use," Jobs said. He added that Apple had spent years to develop a phone that offered both advanced features and ease of use.
The device, which will only be 11.6 millimeters thin, will not use a keypad, but instead function through a feature Jobs dubbed a "multi-touch" display. The device will also use Apples own Mac OS X.
The iPhone will feature a 3.5-inch, 160 dot-per inch color screen display. It will also sync with iTunes and allow users to sync content, such as calendars, photos and e-mail, from a Mac or PC to the device. The iPhone will also feature a 2-megapixel digital camera, speaker, microphone and a docking port similar to those on iPods.
For Web browsing, the iPhone will also use Apples Safari browser rather than the WAP browsers featured on most smart phones. Jobs pointed out that this is a full version of Safari, demonstrating how various Web sites loaded identically on the iPhone as on a full computer. Jobs also showed the audience how the iPhone works with Google Maps, complete with live direction finding.
The iPhone will also come bundled with several widgets similar to those in Mac OS Xs Dashboard, providing, for example, live sports scores and weather.
The iPhone is built with quad-band technology and can be operated on either a GSM or EDGE network. Jobs said the company plans on making a 3G phone in the future. The phone will also have Bluetooth 2.0 and built-in Wi-Fi.
Jobs also announced a partnership with Yahoo to use its search engine and e-mail capabilities.
As was first reported in the Wall Street Journal on Jan. 8, Jobs confirmed that Cingular would partner with Apple to provide service. The iPhone will be sold at both Apple and Cingular retail stores, but not at third-party Apple retailers.
Jobs stressed the value of the Cingular partnership, saying that some of the iPhones unique features, such as Virtual Voicemail (which allows listening to voice mail calls out of order) would not have been possible otherwise.
The first of the iPhones will start to ship in June, after a review by the Federal Communications Commission. The 4GB model, with a two-year contract, will sell for $499 and the 8GB model, also with a two-year agreement, will retail for $599, Jobs said.
In the weeks leading up to the show, several analysts predicted that Apple would produce some sort of mobile phone device, although there was some disagreement about the level of detail Job would unveil during his Tuesday speech.
Although Jobs acknowledged that the iPhone would use the Mac OS X, he did not mention the latest version, Leopard, which has been slated to arrive in the spring of 2007. However, in recent years, Apple has held special events to introduce new and updated products.
As expected by analysts and industry watchers, Jobs spent the first part of his keynote talking about Apple TV, which he previewed in September. The device will have the ability to wirelessly connect a Macintosh to a television through HDMI or component video, and analog or digital audio.
In detailing the offering, Jobs said that Apple TV, which has been officially christened Apple TV, will have a USB 2.0, Ethernet, built-in Wi-Fi, HDMI as well as video, audio and optical ports. With a 40GB hard drive, the device will have a 720p display and can store up to 50 hours of video.
The Apple TV will also use 802.11b/g/n standard technology, which will give it a faster wireless connection, Jobs said. He added that the device will able to stream content – movies, television shows, music and digital photographs – from different PCs. It will also automatically sync media with one computer.
Apple TV will start to ship in February with a starting price of $299, Jobs said.
Click here to read a review of VMwares virtualization software for the Mac.
As for the popularity of iTunes, Jobs said Apple crossed a major milestone, with two billion songs downloaded and purchased through the companys music service. On average, Apple sells about five million songs each day through iTunes.
In addition, since Apple announced its partnership with Disney in 2006, more than 1.3 million of the studios movies have been downloaded through iTunes. That goes along with the 50 million television shows that have also been downloaded. Jobs also announced a major partnership with Paramount Pictures, which will give iTunes users access to a total movie library of more than 250 movies and 350 television shows.
In the opening portion of his address, Jobs thanked those developers for what he called "a smooth" transition to Intel processor, which proved to be one of the biggest highlights of the 2006 Macworld Expo and helped drive Apples success through the year.
Jobs also repeated a line used during the companys fourth-quarter financial earnings call that claimed half of all Mac sales were from people that have never used a Mac desktop or notebook.
Although Jobs sent a strong signal this week that Apple has now moved beyond its computer roots, Gene Munster, a financial analyst with Piper Jaffray, wrote to investors that the companys new multimedia direction will continue to have a "halo" effect for the Mac. During the release of its fourth-quarter financial statements on Oct. 18, Apple officials claimed a record number of Mac sales.
"Apple is clearly becoming a consumer digital lifestyle company versus just a computer and music device company," Munster wrote in a Jan. 9 report.
"Ironically, however, these added non-Mac products should only further accelerate the halo effect and increase Mac market share as well," Munster said.
"Critical to Apples past and future success has been that the company control both the software and hardware for its products; this continues with the iPhone and we expect that this will provide a competitive advantage in this market and other future markets that the company may tap into."
Editors Note: This story was updated to include comments from analysts as well as more information about Apples partnerships with Disney and Paramount Pictures.
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