Apple chief executive Steve Jobs has confirmed the company is to launch the iPhone, a touchscreen handset combining mobile phone, internet access, and iPod music and video playback features.
The internet-ready iPhone will use the Apple OS X operating system and allow users to watch movies, download songs and store photos, as well as offering email, calendar and contacts software found in rival products such as the Blackberry.
Speaking at the MacWorld Expo in San Francisco, Mr Jobs described the iPhone - which uses patented touchscreen technology instead of traditional buttons - as a "leapfrog" product.
He said it would revolutionise the mobile phone market the way Apple revolutionised personal computers with the Macintosh in the 80s and more recently opened up the music download market with the iPod.
However, Mr Jobs did not explain how Apple is able to use the name iPhone, the rights for which are owned by technology company Cisco.
Mr Jobs claimed that the software capability of the iPhone puts it five years ahead of any other product in the mobile market, describing rivals' mobile technology as "baby software".
He also revealed that the company's television set-top box, codenamed iTV, would be called Apple TV. Apple is launching the box in February in the US at a price of $299 (£154).
"This is a day I've been looking forward to for two and a half years," said Mr Jobs. "Every once in a while a revolutionary product comes along that changes everything.
"One is very fortunate if you get to work on just one of these in your career. Apple has been very fortunate that it's been able to introduce a few of these into the world."
The iPhone rates as one of the slimmest smart mobile handsets around at 11.6mm thick. It also includes a two mega-pixel camera and will run with the Safari internet browser and access to products such as Google Maps.
Google's search bar will be built into the iPhone browser, while a deal with Yahoo! will see a free email product offered to users.
The battery life of the phone will allow for five hours of talk time, video and browsing, and 16 hours of audio playback.
To protect the iPhone Mr Jobs said the company has filed more than 200 patents.
A 4Gb model will be available for $499 (£257) and an 8Gb model for $599 (£309). The iPhone will be available in the US from June, in Europe by the end of the year, and in Asia in 2008.
Mr Jobs also confirmed that Cingular, the largest mobile operator in the US, has been chosen as the exclusive iPhone partner in America.
Apple shares were up more than 5% following the iPhone announcement, while Research In Motion, which makes the Blackberry, was down by just over 5%.
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