Jobs Unveils 'World's Thinnest' Notebook, iTunes Movie Rentals

Apple chief executive Steve Jobs on Tuesday unveiled the "world's thinnest" sub-notebook and launched a video rental service on iTunes, giving the online store an injection of content after last year's defections from high-profile content providers.

In addition, Jobs introduced at the Macworld conference in San Francisco a backup appliance called Time Capsule, and software upgrades for the iPhone, iPod Touch, and Apple TV. "All of this in the first two weeks [of the year], and we've got 50 more weeks to go," Jobs said.

In unveiling the MacBook Air, Jobs has introduced a three-pound mini-notebook with a 13.3-inch light-emitting diode (LED) display, iSight Webcam, full-size keyboard, and 80-Gbyte hard-disk drive, which is standard. A 64-Gbyte solid-state drive is available as an option. "It's a little pricey, but it's super fast," Jobs said of the solid-state drive.

The notebook comes standard with 2-Gbytes of memory and an Intel Core 2 Duo 1.6-GHz processor, or an optional Core 2 Duo 1.8-GHz chip. It also supports Bluetooth and the fastest Wi-Fi standard of 802.11n, and has a battery life of five hours. "The MacBook Air was built to be a wireless machine," Jobs said.

The notebook's biggest innovation, however, is its size, tapering from three-quarters of an inch at the hinge to 0.16 of an inch at the other side, where the notebook has a magnetic latch. "It's the world's thinnest notebook," Jobs said.

The Air, however, isn't the smallest of notebooks. The Sony Vaio, for example, is available in an 11-inch model.

Apple also added features to the touchpad, such as the ability to tap twice and then move windows around or rotate photos, use three fingers to pan across pictures, or move a finger diagonally to zoom in and out of a photo.

In reducing the thickness of the notebook, Apple worked with Intel, which reduced the size of its processor package by 60% to the width of a dime and the thickness of a nickel, Paul Otellini, Intel president and chief executive, said in joining Jobs on stage.

"When we started this product, we didn't think it was possible," he said. "There were times when we sweated over it, but in time we did what we do best, which is innovate."

One item missing from the notebook is an optical DVD drive. Instead, Apple has added software called "remote disc" that can recognize an optical drive on a PC or Mac computer through a wireless network. Tapping into those machines, an Air user can install software from a CD or DVD. For an additional $99, Apple is selling an external DVD drive that plugs into the Air's USB 2.0 port.

The Air is scheduled to ship in two weeks and will cost $1,799. On the green front, the machine has a recyclable aluminum case and a mercury-free display with arsenic-free glass. In introducing a video rental service on iTunes, Jobs injected more content into a store that saw its inventory thin last year. Universal Music Group, the world's largest record label, refused to renew its contract to supply music to iTunes, choosing instead to sell music at will, meaning it could withdraw its songs from the online store on short notice. In addition, General Electric's NBC Universal decided to pull its TV shows from the online store after a spat over pricing with Apple.

With video rentals, however, Apple managed to sign up all the major studios, including 20th Century Fox, Warner Bros., Disney, Paramount Pictures, Universal Studios, and Sony Pictures. The service launched Tuesday, and is expected to have more than 1,000 films by the end of February. New films would be available 30 days after the DVD release, which should make DVD retailers such as Wal-Mart Stores happy.

Rented films must be played within 30 days, and once a person starts watching a movie, he has 24 hours to finish. Movies can be transferred to a Mac, PC, iPod Touch, or iPhone. The cost is $2.99 for an older title, and $3.99 for a new movie. High-definition versions are available for a $1 more.

In a show of support for the new service, Jim Gianopulos, chairman and chief executive of 20th Century Fox, joined Jobs on stage. "The real back story is when Steve came to us with this idea, it was a no-brainer," he said. Gianopulos went on to predict that the service would be a "transformable version of the rental model."

The studio head announced that 20th Century DVDs sold in stores would include versions of the movies that can be transferred to an iPod Touch or iPhone.

Apple accounts for 70% of the online music business, and maintains a dominant share of online video downloads. The company, however, is facing increasing competition. Amazon.com, for example, has signed all four major record labels to its music service, which is free of digital rights management technology. This means MP3 files from Amazon.com can play on any device, including the Apple iPod and Microsoft's Zune.

Apparently in anticipation of Apple's rental service, DVD rental company Netflix on Monday said its 7 million subscribers can stream as many movies and TV shows as they want with no additional charge.

With the Apple TV, Jobs introduced a software upgrade that would be available in two weeks, giving customers easy access to the iTunes movie rental service directly from their digital TV. "There's no computer involved here," Jobs said. In addition, users can access on the Web photos on Flickr and .Mac, and video from YouTube

In introducing the upgrade, Jobs acknowledged that the first version of the Apple TV was not a big success with customers or critics. To boost sales, Jobs dropped the price of the device to $229 from $299, and said the software upgrade would be available at no additional cost to current users.

With Time Capsule, Jobs introduced a wireless back-up appliance for Mac notebooks and desktops. The device, which supports 802.11n, comes in a 500-Gbyte and a 1-Tbyte version, and costs $299 and $499, respectively. The appliance starts shipping in February.

The software upgrades for the iPhone and iPod Touch include a maps application that can locate the user, and provide directions to a location. The location software is provided by Skyhook Wireless, which triangulates a person's location based on nearby Wi-Fi hotspots. The iPhone also finds the user based on the cellular network through software from Google.

Other new features in both gadgets include the ability to easily add icons to the home screen that link to Web pages. A user can build as many as nine home screens of icons. The software is available as of Tuesday at no charge for the iPhone, and for $20 to current iPod Touch customers.

In an update on Apple sales, Jobs said the company has shipped 4 million iPhones in the first 200 days it's been available, and 5 million copies of Leopard, the latest version of the Apple Mac OS X that shipped in October. With the iPhone, Apple expects to ship at least 10 million units in its first year. The device shipped last June.