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After changing the way we listen to music with the iPod, Apple now wants to revolutionize the way the world communicates.

Apple Computer Inc. chief executive officer Steve Jobs yesterday unveiled the iPhone, a handheld device that's part phone, part iPod and part wireless computer.

"Every once in a while, a revolutionary product comes along that changes everything," Mr. Jobs said yesterday 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 fortunate that it's introduced a few of those."

If Mr. Jobs is right, the phone of the future will be one that plays music, surfs the Internet and handles e-mail.

The traditional keypad is replaced by a touch-sensitive screen. And voicemail messages can be listened to in any order the user chooses, not just the order in which they were received.

The phone is scheduled to roll out in June.

In the United States, a four-gigabyte model will retail for $499 with a two-year subscription to the Cingular Wireless network, while an eight-gigabyte version will cost $599.

Details weren't available for Canada, but it's likely that the phone would be available here through Rogers or Fido, because it operates on the GSM technology they use.

"I'm ready to replace my current phone with this right now. If it were available today, I would have been standing in line and buying it," said Jeremy Horwitz, editor in chief of ilounge.com, which boasts that it is the world's largest website devoted to the iPod and iTunes.

Mr. Horwitz's only complaint about the iPhone is that it doesn't have a bigger hard drive.

He was amazed, he said, by everything else about the product.

"Any phone company right now selling a phone that will compete with the Apple iPhone is probably quaking, even if they won't admit it. Those who were in denial about this particular device will probably find that they're in more trouble than they can possibly imagine," Mr. Horwitz said.

Investors seemed to agree yesterday, as they pushed up Apple shares by 8.3 per cent and punished rival handset makers. Waterloo, Ont.-based Research in Motion, which manufactures the BlackBerry Pearl, saw its shares fall 7.9 per cent after the iPhone was unveiled.

Despite Mr. Jobs's claims that the iPhone would "leapfrog" past the current generation of smart phones, online chat rooms were raging about whether the iPhone is truly revolutionary or simply an Apple spin on the best that's already available.

"It would be easy to get carried away with the hype, and it does appear to be a highly desirable device, but ultimately the Apple iPhone is not too dissimilar to . . . any number of Windows-based . . . handsets," wrote the Mobile Gazette, an online publication devoted to GSM phones.

"But because this is an Apple device, you can expect a little more polish and a lot more attention to usability."

Nokia, Sony and RIM already manufacture phones that combine the range of features that iPhone will offer, such as music and video players, Web browsers and e-mail tools.

But Mr. Horwitz pointed out that the iPod revolutionized the MP3 market not because it was the first (it wasn't) but because it was so easy to use. As a result, the iPod quickly captured a 75-per-cent share of the U.S. MP3 player market, and gets credited with the revolution that saw consumers shift from buying music on compact discs to downloading it to a portable device.

Still, it will be difficult for Apple to be as dominant in the mobile phone market as it is with MP3 players. That's because most cellphone users are locked into contracts and can't easily switch to the provider that is offering the phone. Many bloggers yesterday were lamenting the fact that there wasn't a version available with all the other features, but not a phone.

Also yesterday, Mr. Jobs announced a set-top television box that will allow consumers to send video from a computer to a television. The company also dropped the word "computer" from its corporate name, signalling its shift into technological gadgets.

With a report from Catherine McLean

Apple says $ 499 ( U. S.) iPhone brings together everything - communications, video, music and computing

1. Uses the entire face as a display, since it has no buttons or keyboard. Consumers interact by using a touch-sensitive screen.

2. Plays music from the built-in 4gigabyte or 8-gigabyte hard drive. Music is automatically muted when a phone call comes in.

3. Displays photos vertically or horizontally. Pictures can be resized by 'stretching' them using the device's touch-sensitive screen.

4. Plays videos in widescreen format and automatically senses whether the screen is being held vertically or horizontally.

5. Makes phone calls using the GSM network used by Rogers and Fido in Canada.

6. Has built-in Wi-Fi wirelss and Bluetooth. It comes with Bluetooth wireless headset and automatically detects Wi-Fi networks.

7. Runs the Mac OS X operating system and the Safari Web browser.

8. Includes free BlackBerry-style 'push' e-mail service from Yahoo.

SOURCE: APPLE