SAN FRANCISCO — In a sign of its growing clout as an entertainment player, Apple Computer Inc. dropped "computer" from its name Tuesday and unveiled two devices that promise further upheaval in the rapidly changing media industry.
The long-anticipated iPhone combines a mobile phone, an iPod and a hand-held Internet device, allowing users to listen to music, watch video, surf the Web and make phone calls from almost anywhere -- potentially changing the flow of information the way the iPod revolutionized the distribution of music.
Analysts who had expected the renamed Apple Inc. to introduce the so-called smart phone nonetheless were impressed by the device's capabilities. They said it was likely to quicken the pace of fragmentation that has beset traditional media and entertainment companies.
Some expressed concern that the price -- the iPhone will start at $499 when it goes on sale in June -- might be a barrier because most people are used to getting their mobile phones free as part of a service contract.
Wall Street drove shares of Apple up more than 8%, shaking off recent concerns about the potential involvement of Chief Executive Steve Jobs in the questionable timing of stock option grants at the Cupertino, Calif., company.
Apple stock closed at an all-time high of $92.57, while rivals such as BlackBerry maker Research in Motion Inc. and Palm Inc. fell sharply.
"They may have created a new category," said Tim Bajarin, president of consulting firm Creative Strategies. "Instead of smart phone, how about 'brilliant' phone? This redefines what a cellphone looks like."
Less than half an inch thick, the iPhone looks like a souped-up version of Apple's signature iPod. Unlike rivals such as the BlackBerry or Palm's Treo, it has no keypad. Instead, it employs a novel touch screen that changes with use. For example, when used as a phone, it features a numeric pad; and when browsing music, it scrolls through digital album covers.
Initially, service for the phone will be sold only by Cingular Wireless. No pricing has been set. The phone will also connect to wireless networks such as those found in airports and coffee shops.
"This is cyberspace in your pocket," said longtime Silicon Valley consultant and futurist Paul Saffo.
"It's going to be the new object of desire."
Apple also introduced a $299 device called AppleTV that wirelessly whisks movies and TV shows downloaded off the Internet to televisions, a key link necessary for online media to grow.
