Apple CEO shows off slim new laptop

SAN FRANCISCO — Apple Inc. Chief Executive Steve Jobs took the wraps off a super-slim new laptop at the Macworld trade show on Tuesday, unveiling a personal computer less than an inch thick that turns on the moment it's opened.

Jobs also confirmed the consumer electronics company's foray into online movie rentals, revealing an alliance with all six major movie studios to offer films over high-speed Internet connections within 30 days after they're released on DVD.

AP Photo/Paul Sakuma (ENLARGE)

Apple CEO Steve Jobs holds up the slim MacBook Air.

• More photos of the laptop, Homer Simpson

Always a showman, Jobs unwound the string on a standard-sized manila office envelope and slid out the ultra-thin MacBook Air notebook computer to coos and peals of laughter from fans at the conference.

At its beefiest, the new computer is .76 inches thick; at its thinnest, it's .16 inches, he said. It comes standard with an 80-gigabyte hard drive, with the option of a 64GB flash-based solid state drive as an upgrade.

The machine doesn't come with a built-in optical drive for reading CDs and DVDs, a feature Jobs says consumers won't miss because they can download movies and music over the Internet and access the optical drives on other PCs and Macs to install new software. They can buy an external drive, however, that will retail for $99.

Trading in Apple stock was heavy Tuesday, the first day of the Macworld Conference & Expo in San Francisco. Shares fell $11.85, or 6.6 percent, to $166.93 in late afternoon trading.

Caris & Co. analyst Shebly Seyrafi said the MacBook Air's price tag "may have been higher than people would have hoped for." Investors also may be "incrementally" concerned that Apple's iPhone was not updated so that it can connect to faster cellular networks, he said.

The new laptop, which has a 13.3-inch screen and full-sized laptop keyboard, will cost $1,799 when it goes on sale in two weeks, though Apple is taking orders now. The company's Web site is already touting the machine. The price is competitive with other laptops in its market segment.

The machine helps fortify Apple's already-sizzling Macintosh product lineup and burnish its polished image as a purveyor of cool.

Apple's Macintosh business hit record sales of 7 million units in the company's fiscal 2007, up more than 30 percent from the previous year.

After hovering for years with a 2 percent to 3 percent share of the personal computer market in the United States, Apple's slice has grown to almost 8 percent, making it the nation's third-largest PC vendor, according to the latest figures from market researcher Gartner Inc.

Other revelations during Jobs' speech reflected the Cupertino-based company's intensifying efforts to push deeper into consumers' living rooms with technologies that blend Internet technology into home entertainment devices.

The movie-rental announcement capped months of speculation that an Apple movie rental service was in the offing. The service launched Tuesday in the United States and will roll out internationally later this year.

Apple will have more than 1,000 movies for online rental through iTunes by the end of February, with prices of $2.99 for older movies and $3.99 for new releases. Users can watch instantly over a broadband Internet connection, or download and keep the movie for 30 days while having 24 hours to finish the movie once it's started.

Apple is partnering with 20th Century Fox, Warner Brothers, Walt Disney, Paramount, Universal and Sony on the service, which will work on Macs, Windows-based machines, iPhones, iPods or Apple TV set-top boxes.

Jobs cut the price of Apple TV from $299 to $229 and announced new software that allows users to order movies through the device and play them directly on their TV sets, eliminating the need to route the content through a personal computer first. The software is free to existing Apple TV customers and will be included in new Apple TV devices shipping in two weeks.

Jobs also unveiled a string of new features for the iPhone, showing how users of the combination iPod-cell phone-Internet surfing device can now pinpoint their location on Web maps, text-message multiple people at once and customize their home screens.

Jobs also said Apple has sold 4 million iPhones during their first 200 days on sale.