Apple unveils cell phone, Apple TV

Let your fingers do the scrolling
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.

"It works like magic," Jobs said. "It's far more accurate than any touch display ever shipped. It ignores unintended touches. It's super smart."

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 San Francisco's Moscone Center, where Macworld is held. He then prank-called the cafe and ordered 4,000 lattes to go before quickly hanging up.

Not so fast, Beatles fans
Jobs demonstrated the iPhone's music capabilities by playing "Lovely Rita, Meter Maid," from the Beatles' "Sergeant Peppers Lonely Hearts Club Band." The audience cheered, spurred by speculation that an announcement was imminent about a deal to sell Beatles songs on iTunes. But there was no such announcement, and Beatles songs still cannot be legally downloaded.

Also Tuesday, Jobs said Apple will begin taking orders immediately for the $299 video box called Apple TV. It will ship next month.

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 iTunes.

Intel inside
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.

Apple also announced Tuesday it will sell movies from Paramount, increasing its online selection from about 100 to about 250.

Meanwhile, Apple's milestone of selling more than 2 billion songs on iTunes catapults the company into the top ranks of music sellers worldwide — more than Amazon.com Inc. and behind only Wal-Mart Stores Inc., Best Buy Co. and Target Corp., Jobs said.

“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.”

Apple shares jumped $7.10 to close at $92.57 on the Nasdaq Stock Market. The stock has traded in a 52-week range of $50.16 to $93.16.

Nearly 120 million Apple shares were traded on Tuesday, more than four times the average daily volume.

Meanwhile, shares of other smart-phone makers slid: Treo-maker Palm dropped 5.7 percent, BlackBerry's Research In Motion Ltd. lost 7.9 percent and Motorola Inc. shed 1.8 percent.

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