Apple has confirmed it is launching the Apple iPhone - a touchscreen iPod with mobile phone capabilities. 

"This is the day I've been waiting for the last 2 years", said Steve Jobs in his now iconic black polo, blue jeans and white trainers outfit, as he announced the new gadget at the keynote speech in San Francisco at MacWorld 2007.

The new device won't feature a QWERTY keyboard, however will have a single screen with no buttons.

"Who wants a stylus?", said Jobs, as he announced a new technology, called multitouch, that allows you to use your fingers.

The new system that ignores unintended touches does allow multi-finger touches.

The phone will run software specifically designed to be used on the phone, rather than aping its desktop software. 

"It's not the crippled stuff you find on other devices, this is desktop class software", said Jobs.

Apple has also turned to the iPod for the syncing capabilities.

The new device will automatically sync music, audiobooks, podcasts, movies, tv shows, contacts, calendars, photos, notes, bookmarks and emails accounts.

The syncing procedure will be run through iTunes.

The new phone will be thinner than any smartphone available, and offer a 2 megapixel camera and a 3.5-inch screen. There is a 3.5mm headset jack for listening to music on the go - just like the iPod. The new iPhone will also include a speaker, as well as the iPod dock connector to connect it to speakers. 

The device also has a sensor built-in that will allow you automatically turn off the phone when it is next to your face so you can't press buttons by mistake.

Steve Jobs demoed the device starting with a Beatles track - not available in the iTunes store.

Apple has paid great attention to the controls including a sliding action that allows you to unlock the phone rather than relying on buttons, while scrolling through menus or contacts lists is just a case of running your finger on the screen.

The screen also has a motion sensor that automatically changes the display when you rotate it. 

"We want to re-invent the phone", said Jobs.

The new phone will allow you to sync your contacts automatically. The phone will offer quad-band rather than 3G, however Jobs said that would be a future offering.

The phone will also sport Bluetooth 2.0 and Wi-Fi connectivity.

The phone, which works heavily around a contact-based system features all relevant detail including the option for a picture with each contact sheet.

Jobs made the first public call from the new phone with Jonathan Ive, Apple's Chief Design Officer.

The phone also allows you to instantly conference multiple calls in at the same time at the touch of a button, while also being able to drop and add calls on the fly.

The phone allow you to have a favourite list of contacts for quick easy access.

The SMS text message system has been designed to look like an instant chat application allowing you to view previous messages via contact rather than text.

Images on the phone can be zoomed via an on-screen movement Jobs called "the pinch" images can be set as wallpapers at the touch of a button.

Apple has said the device supports IMAP or POP3 email service meaning it will work with Hotmail, Yahoo and Gmail.

Apple also announced that it will offer a free push email service from any Yahoo email account that promises to work in a similar way to BlackBerry.

For the browser, which when it comes to connecting to the Internet, automatically selects whether there is a Wi-Fi connection available. Apple has opted for its Safari web browser as well as adding its widgets applications.

The browser software will also resize the page to allow you to see the whole page. The Apple "pinch" feature as described above for the photos also works on the browser window to zoom into web pages.

The widget feature allows you to access the array of widgets similar to those found on the company's desktop operating system. Widgets allow you to check things like weather and stock options as long as you are connected to the Internet.

The company has teamed up with Google to offer its Google Maps service.

Using the service, users can find mapping and directions. Jobs showing off the service at the keynote speech found a Starbucks near the convention centre and then was able to phone the store directly.

"I'll have 4000 lattes to go please," he said down the phone. 

The Google mapping software also features the company's satellite details allowing you to view satellite imagery on the phone as long as you have an internet connection to access it.

"It's the Internet in your pocket" said Jobs.

Apple was joined by Jerry Yang, founder of Yahoo, and Dr Eric Schmidt, CEO of Google, to praise the new phone.

Apple stock is already up $5 on the back of the announcement.

Apple has also announced a range of new devices including a new set of earphones with built-in mic. 

Apple is promising 5 hours talk time from one charge with 16 hours of audio playback.

Apple says the phone features over 200 patents for the technology that it includes.

Slow to give the price, Jobs has said that the new phone will cost iPhone will be available in the US beginning in June 2007 in a 4GB model for $499 and an 8GB model for $599, No UK pricing or launch date was given although Apple has said that the new iPhone will be available in the UK before Christmas. Asia will get the phone in 2008.

In the US, the phone will only be available on the AT&T (Cingular) mobile network.

Apple has said that it hopes to get 1% of the 1 billion mobile phones sold around the world in its first year representing a target of 10 million units.

Steve Job's keynote was strangely finished with a standing ovation from journalists and exhibitors in the crowd.