Apple Online Film Service, Thin Laptop Create a Buzz

Jan 16, 11:50 AM

Jan. 16--Video: On the scene at MacWorld

SAN FRANCISCO -- Last year's introduction of the iPhone was a tough act to follow. But Apple CEO Steve Jobs isn't one to disappoint.

While Jobs did not have another surprise blockbuster product to unveil at Tuesday's opening of the Macworld Conference & Expo here, he did manage to wow the estimated crowd of 5,000.

The biggest news for consumers: a high-speed online movie-rental service and a new super-thin laptop computer called the MacBook Air.

Jobs, clad in his customary blue jeans and black turtleneck, drew a roar of approval when he announced that consumers can quickly download hundreds of first-run and classic movies from every major Hollywood studio directly to their iPhones, iPods, personal computers and even to their TV sets.

The movie rental service -- up to $3.99 for new releases and $1 more for high-definition versions -- launched immediately via the popular iTunes Web site.

Analysts deemed the iTunes movie rentals an industry-changer.

"This is to the movie industry what iTunes was to the music industry," said Jupiter Research analyst Michael Gartenberg. "It has the potential to really shake things up."

Tim Bajarin of Silicon Valley-based Creative Strategies agreed.

As online downloads grow in popularity, even high-definition DVDs may go the way of CDs within five to seven years, said the longtime Apple analyst. "As we get higher bandwidth and greater storage capacities, Blu-ray and HD DVD will fade in the background," he said. "All of us believe that the way people will access (movies and music) is over the Internet."

Amid a sharp pullback in the stock market Tuesday, Apple's stock slid 5.5 percent, or $9.74, to close at $169.04 Tuesday on the Nasdaq.

To push movie rentals directly to living room TVs, Jobs also unveiled a new version of the Apple TV set-top box.

Introduced a year ago, the first-generation Apple TV has been a dud, Jobs acknowledged during his speech. He touted the 2008 version as a breakthrough, with "an entire new interface centered around the movie-rental experience."

Users can download rented films, podcasts, YouTube videos and photos from Flicker and other .Mac Web sites directly to the set-top box that connects to a TV, with no computer necessary.

The Apple TV's price was also dropped by $70 -- from $299 to $229.

Aside from online movie rentals, what generated the most buzz Tuesday was the MacBook Air, which Jobs touted as "the world's thinnest notebook."

The Air measures a mere 0.76 inches at its thickest point. Weighing about 3 pounds, it includes a full-size keyboard and a 13.3-inch screen. It's priced at $1,799.

Sharing the limelight, Jobs brought onstage Intel CEO Paul Otellini, whose company developed the tiny chip that powers the MacBook Air laptop. Handing Jobs a souvenir chip, Otellini described the challenges of designing the Air's 1.6 gigahertz duocore chip -- the "width of a dime and thickness of a nickel" -- which is 60 percent smaller than a similarly powered Intel chip.

On the Macworld's exhibit floor, a steady stream of people stopped to admire a mobile of five MacBook Air computers dangling from the ceiling in what amounted to a form of modern art. Fans posed for photos with the computers.

And for Apple, that's the point. The Cupertino-based company has a knack for creating consumer products that combine easy-to-use, high-tech functions with stylish design, drawing legions of die-hard fans.

"Apple has gained an understanding of who its audience is and what it wants," said Bajarin.

Inside the Macworld trade show, which is open to the public through Friday, Jim Puskar of Oakland couldn't agree more. "This new laptop is pretty hot stuff," he said. "It's light and very portable."

Puskar, who's been attending Macworld for about 15 years, said he just bought a Macbook Pro laptop last February but nevertheless will take a hard look at the Air.

And the new iTunes movie rental service? "Ah, that movie stuff is not what I'm all into," he said, adding that his wife may well have a different opinion.

Micki Linen of Geyserville also cast a covetous eye on the Macbook Air. "It's a better alternative for travel, absolutely," she said, indicating it would work well for her graphic design business.

Jobs also announced new features for the iPhone, which he said has logged some 4 million sales since last summer's launch. Instead of GPS technology, a new mapping feature uses Wi-Fi hot spots and cellular phone towers to establish a user's current location and map a route to the person's next destination.

Jobs also said new iPhones will be equipped with the ability to send SMS text messages to multiple people simultaneously and allow users to create "Webclips," personalized icons of favorite Web sites. If you already own an iPhone, software for the new capabilities can be downloaded for free.

"iPhone is not standing still," Jobs said. "We're making it better and better and better."

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