As expected, Apple introduced a movie rental service for iTunes at the annual MacWorld confab in San Francisco, part of a broader upgrade to the Apple TV device that also has implications on how iTunes buyers can access music.

In addition to the new movie rental system, Apple CEO Steve Jobs unveiled a new version of Apple TV--called Apple TV Take 2--that lets users buy or rent movies, as well as purchase music, directly from iTunes without requiring a connection to the computer. Any content purchased from the new Apple TV can later sync back to a home computer for long-term storage.

The new direct access feature is simply a software upgrade, which current Apple TV owners can download at no charge. Jobs also announced the price of new Apple TVs has been reduced to $230 form $300.

Apple has deals with Touchstone Pictures, MGM, Miramax, Lions Gate, 20th Century Fox, Warner Brothers, Walt Disney, Paramount, Universal and Sony Pictures for the movie rental service, which goes live today. The company expects more than 1,000 titles will be available by February.

Older movies will cost $3, new movies $4. New releases will become available 30 days after their DVD release date. All rented movies must be viewed within 30 days, and once started must be completed within 24 hours.

Additionally, 20th Century Fox introduced a system that allows customers buying a movie on DVD to transfer an included digital copy to iTunes. The first DVD to include the technology is the Family Guy "Blue Harvest" DVD.

During the keynote, Jobs also said that iTunes has now sold 4 billion songs, with 20 million sold on Christmas Day. The company also sold more than 125 million TV shows and 7 million movies.

Jobs also showed off new features to both the iPhone and the iPod Touch. The Touch can now use various iPhone applications--such as e-mail, stock reports, notes and weather info--accessible when in WiFi range. The iPhone added location-based mapping features, and a customizable home page. Jobs says Apple has sold more than 4 million iPhones in the 200 days its been on sale.

Existing Touch owners will have to buy the new software package for $20, while new devices will have it included at sale.

Randy Newman performed at the close of the keynote.

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