IT IS the gadget that Apple Computer hopes will make all other gadgets obsolete: a mobile phone that looks more like a rectangular compact mirror, with only one button, a screen that’s almost invisible when switched off, and the company’s trademark chrome casing. Apple calls it the iPhone.

After years of speculation, 200 patent applications and a development programme guarded by the kind of secrecy usually reserved for CIA operations, the iPhone was unveiled at a conference yesterday to a standing ovation from employees and Mac enthusiasts, though journalists were not allowed get their hands on it.

The iPhone, which is just over a centimetre thick, combines several things that Mac fans have been fantasising about for years: a “widescreen” iPod with a 3½in (9cm) display, a handheld computer that runs Apple’s OS X operating system and the Safari web browser, and a mobile phone that takes a radical approach to the numberpad and keyboard. It also has a 2-megapixel camera.

Apple hopes that the iPhone will do for mobile phones what its iPod did for MP3 music players — redefine the industry. Apple has sold more than 70 million iPods since they were introduced in 2001 and more than 2 billion songs via its online iTunes store. It aims to sell 10 million iPhones by the end of next year, or about 1 per cent of all mobile phones sold. “iPhone is a revolutionary and magical product that is literally five years ahead of any other mobile phone,” claimed Steve Jobs, Apple’s CEO, as he stood on stage at the Macworld conference in San Francisco yesterday.

At one point during the presentation, Mr Jobs — who has faced criticism for a continuing financial scandal at Apple, involving so-called “back-dated’ stock options to reward employees — used an iPhone to check Apple’s share price, which had jumped by almost 8.5 per cent.

Instead of using a keypad, users will navigate the iPhone’s features with touch-screen technology called Multi-Touch, which Mr Jobs claimed was as intuitive as a computer mouse.

Other features include a sensor that knows whether the iPhone is in portrait or landscape position, allowing the device to change its display accordingly. In landscape mode, the iPhone can display widescreen images and users can flip through their iTunes songs by the CD cover art.

Another sensor changes the brightness of the screen according to ambient light, and another switches off the screen when the iPhone is held to the ear. Another technology called “visual voicemail” lets you choose on the screen which message to listen to, without having to listen to voicemails in chronological order. The iPhone is also wi-fi compatible, and comes with the Google Maps navigation technology.

Americans will be able to buy the iPhone in June for $499, (£260) for an iPhone with 4-gigabytes of storage, or $599 for an 8-gigabyte model. The device will debut in Britain and the rest of Europe by the end of the year, virtually guaranteeing a shortage for Christmas.

“That Apple was going to release a phone was the worst kept secret in technology,” said Christopher Hickey, an analyst with Atlantic Equities in London. “But by announcing that the phone will include a wide touchscreen as well as iPod functionality, Apple has managed once again to surprise everyone.”

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