San Francisco, January 28: There's never been a laptop as skinny as the new MacBook Air from Apple. At its thinnest, it measures just about four millimetres.

'When you first see MacBook Air, it's hard to believe it's a high-performance notebook with a full-size keyboard and display,' gushed Apple CEO Steve Jobs while presenting the new laptop at the keynote speech of the MacWorld Expo in San Francisco. 'But it is.'

The excitement at the Moscone Centre was also sparked in typically reserved observers like Michael Gartenberg, research director at the US market research firm Jupiter Research: 'This will become the object of lust for all tech fans this year,' Gartenberg said.

In advance of the MacWorld Expo, the chatter on many websites was focused on a potential combination of the iPhone and a normal laptop - more or less a retooling of the 'Newton' PDA concept that Apple phased out 10 years ago. The MacBook Air is instead a full-value laptop with a robust aluminium casing with a 13-inch display and a full sized keyboard.

During his presentation, Steve Jobs compared the MacBook Air, which costs about $1,700, with the Vaio TZ series from Sony.

'The thinnest part of the Vaio is the thickest part of the MacBook Air,' the Apple CEO told the cheering crowd. What he didn't mention in his comparison is that unlike the MacBook Air, the Sony laptops come with a DVD burner, a modem, and an integrated UMTS module.

With an Intel Core 2 Duo processor with 1.6 or 1.8 gigahertz (GHz) of processing power, Apple has certainly sent its new laptop out into the world with a significantly stronger CPU than the Japanese devices against which it is competing.

The standard model contains a 1.8 inch hard drive offering 80 gigabytes (GB) of storage space. Users willing to hand out another $900 can upgrade to a 64 GB Flash hard drive. Flash memory works more quickly than a hard drive and consumes less power. The battery in the MacBook Air lasts five hours when working with a traditional hard drive.

The second major MacWorld Expo announcement centred on a second attempt at the 'digital home' market, as well as launching an online video rental service. To facilitate all of this entertainment, Apple introduced an improved version of its 'Apple TV' TV set-top box. It will enable HD video films to be rented from the Internet without having to connect with a computer.

Steve Jobs gained the support of all significant Hollywood studios for the 'iTunes Video Rentals' platform. In the US, DVD-quality films will cost $3 or $4 for a rental limited to 30 days. High definition (HD) films will cost $1 extra.

'This is going to turn the video industry inside out the same way the iTunes store changed the music industry,' says Jupiter analyst Michael Gartenberg. Ross Rubin from the market research institute NPD disagrees, seeing Sony and Microsoft as enjoying the better start position: 'Both of those Apple competitors have already placed their Trojan Horses in the living room through the Playstation 3 and the Xbox 360.' Each game console is capable of downloading HD content online.

It's unclear how the Apple movie rental model will work outside the US. Jobs indicated plans to launch the service in Europe 'later this year'.

San Francisco, January 16 : Apple Inc unveiled a lightweight laptop about three-quarters of an inch thick Tuesday and said it would rent movies over the Web, moving the iPod maker into a very competitive market.

Shares of DVD rental rival Netflix Inc fell 2.5 per cent to $22.20 and Blockbuster Inc, the largest video rental chain, dropped 16 per cent to $2.72.

But Apple shares also fell, by more than 6 per cent to $167.64 in afternoon trading, as investors had expected both developments after widespread speculation.

"There wasn't the 'wow' factor from anything that Apple had to say today," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.

Chief Executive Steve Jobs made the announcements at the annual Macworld convention in San Francisco, where last year he showed off the highly anticipated iPhone for the first time, setting a high bar for this year's event.

Apple shares have nearly doubled since last year's Macworld, and in late December topped $200 for the first time.

Jobs said the new aluminum-skinned Macbook Air notebook was the thinnest computer available, at a maximum of 0.76 inches and tapering to just 0.16 inches.

Priced from about $1,800, the Macbook Air bridges the gap between Apple's entry-level and high-end laptops, and analysts voiced concern that it could steal customers away from its more expensive products.

"It's not really clear how many more incremental buyers you can drive, and there could be some cannibalisation," said Shaw Wu, an analyst with American Technology Research.

Macbook laptops have been one of the company's strongest products, with sales rising 37 per cent on the year in the fiscal fourth quarter ended last September.

Apple has enjoyed huge success with its iPod music players and more recently the iPhone, which Jobs said had sold more than 4 million units since its release last June. Jobs showed off new iPhone features such as the ability to display a user's location on a map and a way to customise the main screen with "web clips", or icons linking directly to specific parts of a Web site.

But Apple has struggled to find a big audience for Apple TV, a product designed to be a Mac accessory for watching Internet video on a computer or television and unveiled alongside the iPhone a year ago.

"It's not what people wanted. We learned what people wanted was, movies, movies movies," Jobs said.

A new version of Apple TV will be able to connect to the Internet directly and download TV shows, movies and music through iTunes. Viewers will be able to choose movies directly from their TVs and Apple said viewers could start watching within seconds if they had a fast Internet connection.

Jobs announced deals with major movie studios and several smaller ones to offer movies for rental through iTunes, with new releases costing $3.99 and library titles $2.99. High-definition movies will also be available.

The revamp of Apple TV hardware combined with a broad selection of movie rentals would give Apple an edge over competitors such as Amazon.com Inc, Netflix and Microsoft Corp, Wu said.

News Corp's 20th Century Fox, Walt Disney Co, Time Warner Inc's Warner Bros, Viacom Inc's Paramount, General Electric Co's Universal, Sony Corp's Sony Pictures, Lionsgate, MGM and New Line have all signed on to Web rentals, Apple said.

"It's too early to declare that this is going to be a big hit but this is arguably the best offering out there right now," Wu said. "No one has succeeded in this market, not even themselves."

By Scott Hillis