Apple has urge to converge

Steve Jobs delivered this year’s Macworld Expo keynote to an overcapacity crowd. He boasted that the Mac’s PowerPC-to-Intel transition had been completed in seven months, grinned about having sold half of new Macs to newcomers to the platform, and then he said, “Let’s move on.”

And, brother, has Apple moved on. The company has dropped the word Computer from its corporate name and is taking a sharp turn toward services, mobile, and consumer electronics -- a dream Jobs has been coddling for two and a half years, he said.

As the packed exhibit floor at Macworld indicated, the Mac is very much in ascension. But for Jobs, who thrives on the new as much as Apple observers do, Mac is a fait accompli. Now it’s time for convergence.

The first of Apple’s two market-shaking new products is Apple TV, the first credible entry into TV over broadband. Apple TV is a set-top receiver, digital content store, and wireless LAN broadcaster for Apple’s iTunes.

The tiny box is neither a Mac nor a digital video recorder. The USB port is reserved for “service and diagnostics,” not human interface devices, and all of Apple TV’s audio and video ports are outputs. Apple TV syncs content only from Macs and PCs within Ethernet or wireless (802.11 a/b/g/n) shouting distance that are running iTunes desktop software; it can also reach out directly to Apple’s iTunes service with a touch of its gumstick remote. In other words, Apple TV turns every PC and Mac in your home or office into a tunable wireless digital television, but every channel has iTunes on.

Apple’s new iPhone is the ultimate converged mobile device, bringing together a mobile phone, a widescreen iPod, and an Internet communicator in a sub-12mm thin handheld that places iPhone users at three times the normal risk of plowing into oncoming traffic. iPhone has no physical keyboard; one pops up on-screen when you need it.

Inside its classy black polycarbonate chassis, iPhone has absolutely everything but a hard drive, including a speaker, microphone, 4GB or 8GB of flash memory, a 2-megapixel camera, Wi-Fi and Bluetooth wireless LAN, GSM/GPRS/EDGE mobile phone and data transceiver, all managed by an embedded OS X operating system.

Jobs’ explicit mention of iPhone’s OS X roots suggests that iPhone will be open to developers.

As for the target market, Jobs described iPhone as “like a Blackberry without Exchange,” suggesting that he has his sights set on enterprise, as well as consumer adoption.

Global investors showed that they could read between the lines, as well, dumping stocks in a number of mobile device makers on Tuesday including BlackBerry maker Research In Motion, and Treo-maker Palm, whose shares fell 5.7 percent on the Nasdaq.

Of course, challenges remain. Cisco Systems killed some iPhone buzz on Wednesday by reminding Apple, via a lawsuit filed in Federal District Court for Northern California, that it owns the iPhone name, through its Linksys division.

Beyond that distraction, Jobs set the bar high for his company by promising to own 1 percent of the mobile market in 2007. That’s a tall order for a $500 to $600 handset, especially given a consolidated high-end mobile market. But judging from the collective moan sent up by the Macworld Expo keynote crowd, Apple can count on at least 4,000 customers when iPhone ships in June.

-- Robert Mullins and Dan Nystedt of IDG News Service contributed to this report.