Video rentals co-star in Jobs keynote

Chief executive Steve Jobs kicked off his keynote with the introduction of a new storage device, and ended it with the unveiling of a new laptop.

The storage box will be known as Time Capsule. Designed to complement the Time Machine feature in OS X Leopard, the box combines an Airport Extreme wireless hub with either 500GB or 1TB of hard disk storage.

The two models will cost US$299 and US$499 respectively and are slated to ship in February.

Of the multiple updates Jobs unveiled, perhaps the most significant came to iTunes. The online music store will now offer movie rentals, allowing users to rent films at US$3.99 for new releases and US$4.99 for library titles.

Upon downloading the rental, users will have 30 days to begin watching the film. After the film is first played, it will remain on the user's machine for 24 hours.

Jobs hopes that the rental service can improve on what the Apple co-founder sees as lacklustre returns on the movie purchase service.

"It did not meet our expectations," Jobs said of the seven million movie downloads. "We looked at it, and we think there's a better way."

Apple also boosted the number of films which will be offered. Every major studio, including Fox, Universal and Sony will be offering films for the rental service.

US users will be able to access the rental service immediately, and Apple hopes to have the service available internationally by the end of the year.

Movie rentals will play a key role in another product update. The Apple TV has been upgraded to a standalone box which will not require a computer.

The new box will also support HD video and Dolby 5.1 sound. The iTunes store will offer the HD titles for an extra US$1. In addition to the iTunes store, YouTube videos as well as Flickr and Mac.com photo galleries can be accessed.

The new service will ship standard on new Apple TV models. Current users will have to pay US$20 to update.

Rounding up the update parade was the iPhone and iPod Touch. Jobs announced a host of new software package for the Apple smartphone.

The built-in maps program will now be able to pinpoint user locations. Apple is using Google's cell tower location software and Wi-Fi hotspot triangulation software from Skyhook Wireless.

The free update will also include software to allow for better customisation of the iPhone's home screen, the ability to send SMS messages to multiple recipients, and support for subtitles and on-screen lyrics in iTunes.