The newly launched gadget can download music and video, and is being called a "magical device" which will "revolutionise the industry" by Apple's Steve Jobs.

The phone has a large touch screen rather than buttons, which Apple says is "super smart". It will be launched in the US in June, costing from $499 (£257), then in Europe later this year.

Mr Jobs told the BBC:

"The iPod changed everything in 2001. We're going to do it again with the iPhone."