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Jobs also announced that henceforth the company will be known simply as Apple, Inc., dropping the word Computer that had been appended to the company's name since its foundation in 1976. The name change reflects the extent to which the company has reinvented itself since the release of the first iPod in 2001.

While Apple soared, its new rivals in the phone business suffered, particularly in South Korea, where Samsung and LG were among those

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whose stock price dipped. Nokia and Ericsson shares also fell.

Stock holders were said to be panicking as Apple's device was unveiled.

'Apple's iPhone looks attractive and it'll pose a big threat to music phones made by existing handset makers,' analyst Lee Min-hee at Dongbu Securities told AP.

But, he added, there may be a silver lining for Samsung, the world's leading maker of the NAND flash memory that Apple will use in the iPhone.

Handset makers may not have too much to worry about in the short-term, with Apple aiming to take just one per cent of the phone market.

However, investment website Seeking Alpha believes that Apple may sell three times as many iPhones as it predicts, shifting 30 million units to give it a global market share of three per cent. That could have an impact on rival makers of high-end phones, who will now be rushing to emulate Apple's technology.