Apple confirms rumours with iPhone

It's official: Apple has the iPhone.

With the comment: "We have reinvented the phone," Apple chief executive Steve Jobs unveiled one of its most hotly rumoured products yesterday during his keynote speech at Apple's annual MacWorld conference in San Francisco.

The ultra-slim handset, a cross between an iPod and a mobile handset with an extra-large 3.5-inch screen, runs on a touch system rather than a keypad - and can surf the internet.

The iPhone - a term Apple has acquired from Cisco, which owned it for many years - can utilise either GSM or Edge mobile networks, and has built-in WiFi and Bluetooth capabilities. It runs Apple's Macintosh operating system, OSX, and will come in 4GB ($499 (€386)) and 8GB ($599) models. The handset will be available in the US in June, and in Europe by the end of the year, Apple said.

Mr Jobs also gave more details on Apple's upcoming television set-top box product which he had previously referred to as iTV, but is now officially called Apple TV.

Apple TV will have built-in WiFi and users of the box will be able to stream video from a PC or Mac to a television screen. Apple TV will use the new 820.11n WiFi standard.

Mr Jobs said that like the full line of Mac computers, Apple TV would run on Intel chips and would have a 40GB hard drive for storing up to 50 hours of video. It will cost €299 including VAT and will be available next month.

"Apple TV is like a DVD player for the 21st century - you connect it to your entertainment system just like a DVD player, but it plays digital content you get from the internet rather than DVDs you get from a physical store," he said.

Apple Computer will henceforth be known as Apple Inc, said Mr Jobs, reflecting the company's steady expansion beyond computer manufacturing into other media, including music, with the iPod and iTunes music store, and now television and mobile phones.

Apple shares rose 6 per cent on the announcements.