January 15 2008: 3:24 PM EST
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Apple unveils movie rentals, thin laptop

CEO Steve Jobs also discloses software for iPhone and wireless backup device in Macworld presentation.


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The audience gathered for Steve Jobs' presentation at Macworld in San Francisco on Tuesday.
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Among the many new products unveiled Tuesday, Apple CEO Steve Jobs presented what he called "the world's thinnest laptop."

SAN FRANCISCO (Fortune) -- Apple Inc. CEO Steve Jobs unveiled movie rentals from iTunes, a superthin notebook computer and new software for the iPhone and iPod iTouch at his Macworld presentation in San Francisco on Tuesday.

Apple (AAPL, Fortune 500) shares fell nearly 7 percent in afternoon trading, signaling shareholder disappointment in the new offerings.

The movie rental announcement was highly anticipated. Jobs said every major movie studio will make its films available at a price of $2.99 each for older films and $3.99 each for new releases. High-definition videos will cost $1 more.

The downloaded rental can be watched for 24 hours after it's initially launched. Jobs said more than 1,000 films will be available by February.

The chairman of 20th Century Fox, Jim Gianopulos, who was brought onto the stage by Jobs, said that the new "Family Guy" DVD will contain a digital copy that can be moved to iTunes and the iPod.

"We're really excited about our partnership, and we look forward to bringing you lots of exciting entertainment in years to come," Gianopulos said.

Jobs said iTunes has now sold 4 billion songs, and set a record on Christmas Day with 20 million songs downloaded. He also said the online store has sold 7 million movies and 125 million TV shows.

Jobs unveiled what he called the "world's thinnest notebook," the MacBook Air, which will join the MacBook and MacBook Pro laptop lines.

He showed that the new computer, which is 0.76-inch at its thickest point, can fit inside an interoffice mail envelope. Jobs said the new computer has a 13.3-inch wide screen, an LED backlit display, a built-in iSight camera and a full-size keyboard.

Jobs said the MacBook Air has 5 hours of battery life and weighs 3 pounds. It runs on a 1.6-gigahertz Intel Core 2 Duo chip, has 2 gigabytes of buffer memory, and an 80-gigabyte hard drive.

The computer will not have an optical drive for reading DVDs and CDs, with Jobs saying that task can be done by iPods and wireless movie rentals. But he said the MacBook Air will have software that will allow it to "borrow" the optical drive of nearby Macs and PCs.

The price will be $1,799, and it will be available in two weeks, Jobs said.

For widescreen TV owners, Jobs unveiled new software for the Apple TV device that will allow the downloading of movies, podcasts, photos and music directly to the screen. He also announced a lowering of the Apple TV device's price to $229, and said a free software upgrade will be available to existing owners.

The Apple CEO showed off new software for the iPhone, including a mapping application that works in conjunction with Google (GOOG, Fortune 500). The application uses a Wi-Fi network instead of GPS software, which Jobs said "works pretty darn well."

There's also a new text messaging feature and a way to put clips of Web pages on the iPhone screen.

Jobs revealed that the company has sold 4 million iPhones in just 200 days. He said the iPhone now has a nearly 20 percent share of the smart phone market, second only to Research in Motion's BlackBerry, which has a 39 percent share.

For the iPod iTouch, Jobs unveiled five new software applications, available for $20 for those who already have the device. The applications are mail, stocks, notes, weather and location.

The Apple CEO also unveiled a wireless Mac backup device, called Time Capsule, as a companion to the Time Machine component in Apple's new Leopard version of its operating system. Time Capsule will be sold in a 500-gigabyte version for $299 and a 1-terabyte version for $499.

As for Leopard, Jobs revealed that 20 percent of all Mac users have adopted the upgraded operating system, which was released in October. He called the 5 million copies of Leopard delivered the most successful release in the company's history.

Jobs also unveiled the first version of Microsoft (MSFT, Fortune 500) Office for Mac computers made with Intel (INTC, Fortune 500) chips. To top of page

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