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John Shen

Onlookers marvel at the new iPhone at Macworld 2007 held in San Francisco on Tuesday.

SAN FRANCISCO (AP) - Apple Computer CEO Steve Jobs on Tuesday announced the iPod maker’s long-awaited leap into the mobile phone business and renamed the company just “Apple Inc.,” reflecting its increased focus on consumer electronics.

The iPhone, which will start at $499 when it launches in June, is controlled by touch, plays music, surfs the Internet and runs the Macintosh computer operating system. Jobs said it will “reinvent” wireless communications and “leapfrog” past the current generation of smart phones.

“Every once in a while a revolutionary product comes along that changes everything,” he said during his keynote address at the annual Macworld Conference and Expo. “It’s very fortunate if you can work on just one of these in your career. ... Apple’s been very fortunate in that it’s introduced a few of these.”

He said the company’s name change is meant to reflect Apple’s transformation from a computer manufacturer to a full-fledged consumer electronics company.

During his speech, Jobs also unveiled a TV set-top box that allows people to send video from their computers and announced the number of songs sold on its iTunes Music Store has topped 2 billion.

Apple shares jumped more than 8 percent on the announcements, while the stock of rival smart-phone makers plunged. The run on Apple stock created about $6 billion in shareholder wealth.

While Jobs noted the explosive growth of the cell phone market, it’s not clear that a device as alluring as the iPhone poses a threat to mainstream handset makers due to the price, said Avi Greengart, mobile device analyst for the research firm Current Analysis.

“My initial reaction is that this product actually lives up to the extensive hype, and I’m not easily impressed,” he said. “But the vast majority of phones sold cost way less than $500.” Instead, the rivals most likely to face new competition from Apple’s handset are makers of higher-end smart phones such as Palm Inc.

Tim Bajarin, principal analyst with Creative Strategies, said the iPhone could revolutionize the way cell phones are designed and sold.

“This goes beyond smart phones and should be given its own category called ‘brilliant’ phones,” he said. “Cell phones are on track to become the largest platform for digital music playback and Apple needed to make this move to help defend their iPod franchise as well as extend it beyond a dedicated music environment.”