SAN FRANCISCO, Jan. 9, 2007 -- From the moment Apple CEO Steve Jobs walked onstage to deliver the keynote address at this year's Macworld expo in San Francisco, a knowing grin hinted that he was hiding a really great secret.
About 20 minutes into the speech, Jobs paused to take a sip of water and slowly made his way back to the front of the stage. Audience members, already nervously shifting in their seats, anticipated what they knew would come next.
"This is a day I've been looking forward to for over two years," Jobs told the thousands who had packed the Mascone Center for his speech. "Every once in a while, a revolutionary product comes along."
As the dynamic speaker slowly peeled back the curtain to show the device that every technophile in the world was waiting for, the crowd hooted and hollered at every feature Jobs revealed.
While bloggers and journalists had spent months theorizing about what a new cell phone from Apple might look like or anticipating the possible release of a full-screen video iPod, Apple did what it does best and pulled a fast one on them all.
"Today, we're introducing three revolutionary products," Jobs said as the crowd muttered in confusion. "The first product is a widescreen iPod … the second is a revolutionary cell phone … and the third is a breakthrough Internet communication device.
"Three things, a widescreen iPod with touch controls, a revolutionary mobile phone and a breakthrough Internet communication device. An iPod, a phone, an Internet communicator. An iPod, a phone and an Internet communication device. These are not three separate devices."
It finally started to sink in that Apple wasn't announcing a new line of products but one device that could do it all.
The Apple iPhone is almost all screen and makes up for the lack of controls -- there's only one button on the device -- with a patented touch-screen interface that allows users to make calls, text or e-mail their friends, play music, tap into video and photos and surf the Internet.
It comes in two flavors, an 8 gigabyte model for $599 and a 4 gigabyte model for $499. Innovation doesn't come cheap.
"It's awesome," a faceless audience member exclaimed.
"Pretty cool, right," Jobs fired back.
And cool it is.
A Family and a Business
As Jobs reached the end of the keynote, Apple employees and partners were high-fiving one another and their uncontrollable smiles indicated that there was more invested in the product than just time and money. These people are proud of what they've accomplished, and so are the many enthusiasts in attendance.
"I think it's unlike anything that anybody's ever unveiled because it covers such a wide spectrum of daily problems ... and makes everything so easy to use," said Erin Geyer, a Web developer from Web Associates. "It's really exciting."
Geyer said she's ready to switch carriers to Cingular in order to be an iPhone owner but admitted that the 4 gigabyte model may not be worth it, considering how much space a movie or television show takes up. She'll be going for the 8 gig model as soon as she can get her hands on it.
Jobs took a few shots at Microsoft for good measure, including the unveiling of a new Mac and PC television ad that pokes fun at the upcoming release of Windows Vista. Of course, he didn't miss the chance to get in a joke about Zune, Microsoft's recently released media player.
Though the jokes and jabs seemed more playful than spiteful, there's an obvious sense of competition that's even more prominent among fans.
"What's Microsoft going to do now," one attendee asked his companion.
"They'll probably steal this idea, too," his friend responded. "It's a company that's never had an original idea in their lives."
But while enthusiasts and Apple employees take potshots at Microsoft, their sense of the Apple brand as more of a family crest than a brand is palpable.
"I've had a Macintosh now for a total of 35 days, and I'm really excited to be part of the Mac community," said Elizabeth Frost, production director for Morning Pictures Group.
It looks like Apple gave the world a little sip of the company Kool-Aid. Now we'll have to wait and see if it can turn its unparalleled success in the MP3 market and evident emotional connection to its work into a successful cell phone business.
ABC News' Kristina Wong contributed to this report.