Apple Inc. unveiled the world's thinnest laptop on Tuesday, as well as new software upgrades to its iPhone and iPod Touch, and buffed up its iTunes software with online movie rentals.

Steve Jobs, Apple's Chief Executive, told media and spectators that the new laptop didn't compromise the way other thin laptop manufacturers do , but claimed the Macbook Air was the first computer to offer a full-sized keyboard, a relatively large screen, and fast performance for the thin-and-light notebook segment.

The new notebook will go for $1,799 when it goes on sale in two weeks, though Apple is taking orders now.

Shares of Apple fell by more than 6 percent to $167.64 as investors already anticipated the announcement.

During his keynote at this years Macworld Expo, Jobs also announced that Apple's popular iTunes online media store will now allow users to rent movies and watch them directly on their computers.

We learned what people wanted was ... movies, movies movies, Jobs said.

Apple will have more than 1,000 movies for online rental through iTunes by the end of February, with prices of $2.99 for older movies and $3.99 for new releases, Jobs said. Users can watch instantly over a high-speed connection, or download and keep the movie for 30 days while having 24 hours to finish the movie once it's started.

The iPhone, which sold over 4 million units during its first 200 days of sale, will receive also receive an update, enabling a host of new features. Location based mapping, webclipping, and customizable home screens will now be enabled. The devices will support advanced media features as well, including song lyrics, subtitles for movies, and additionally, the ability to text message multiple recipients.

Owners of the iPhone can download a free upgrade today, however iPod touch users will need to pay $20.

Macworld is Apple's largest event, showcasing technologies to come and setting the tone of the company for the year. It runs through January 18 in San Francisco.

See full coverage from Macworld 2008

Software ITunes Apple Steve jobs