Apple announces ultrathin laptop, movie rentals

Apple CEO Steve Jobs once again managed to impress a Macworld crowd during his keynote address Tuesday morning by introducing an ultrathin laptop called the MacBook Air, which the company touts as the world's thinnest notebook.

Jobs also introduced a movie rental service (watch the video), which he said has the support of all major Hollywood studios. In addition, he announced Mac Office 2008; a backup appliance called Time Capsule; and new features for the iPhone, iPod Touch, and Apple TV.

Jobs said the MacBook Air has a 13.3-inch LED backlit screen and a full-size keyboard. The computer measures 0.76 inches at its thickest and 0.16 at its thinnest. It's so slender, Job said, it fits into an inter-office mailing envelope.

Most ultraportable notebooks have miniature keyboards and 11-inch to 12-inch screens.

The MacBook Air weighs about 3 pounds, comes with 2GB of standard memory, an 80GB standard hard drive, and 802.11n wireless connectivity. It will cost $1,799 in that configuration, and shipments are expected to start in two weeks.

Other features include Intel's Core 2 Duo processor, a built-in iSight camera, and the ability to move a photo around on the touchpad with two fingers.

As many people expected, Jobs also announced iTunes movie rentals, with participation from major studios including Touchstone, Miramax, MGM, Lionsgate, and New Line Cinema, as well as Twentieth Century Fox Film, Warner, Disney, Paramount, Universal, and Sony.

"We have every major studio," Jobs said. But the company had to make a concession--the films won't be available until 30 days after the movies are released on DVD.

Films cost $2.99 for library titles and $3.99 for new releases. They can be watched on any device, instantly. Renters have 30 days to watch a movie after it's downloaded, but only 24 hours to watch it after it starts playing. The service is up and running now, and Jobs said the library should be built to 1,000 films in February.

Jobs also announced updates to Apple TV, which can now be used directly with a television and access iTunes without the need for a computer to play middleman. Apple TV has a new user interface that allows people to sort through movies in the same way they can with Cover Flow. Users also will be able to view photos from Flickr and Picasa. A free software upgrade delivers those new features, and a new Apple TV with those features will now cost $229.

In other product announcements:

• Time Capsule is a "backup appliance" that looks much like the Mac Mini or Apple TV. It's basically a wireless access point with a hard drive, enabling consumers to back up their notebooks wirelessly. It's expected to ship in February and costs $299 for the 500GB model and $499 for the 1TB model. (Watch a video of Jobs introducing Time Capsule.)

Click for video of latest iPhone updates.

• Some new iPhone features include an application called Maps, which can approximate your location; the ability to customize the home screen; the capability to send text messages to multiple people; and the option to view lyrics for songs you're listening to.

• Apple is adding five applications to the iPod Touch, including Mail, Maps, Stocks, Notes, and Weather, which make the iPod Touch much more like the iPhone.

Apple shares went down more than 5 percent to $169.62 in afternoon trading. And although the overall market was also down on Tuesday, the Macworld announcements didn't exactly seem to wow investors.

CNET News.com's Tom Krazit contributed to this report.

This entry was updated at 3:15 p.m. PST to better explain changes to Apple TV.