Apple has unveiled a long-awaited film download service, offering Disney titles only, in an effort to replicate its dominance of online music in movies.

The internet film store, widely expected by Apple aficionados, was accompanied last night by a revamped line of iPod music players, designed to boost the gadget’s flagging fortunes, and a new wireless device, codenamed "iTV", aimed at "bringing Apple into the living room" by connecting PCs to television sets.

New film releases from Apple will retail for $12.99 (£7) in the first week of release. After a week they will be hiked to $14.99. Most older titles will retail for $9.99.

The service will go live in the US this week. "We hope to roll it out internationally in 2007," chief executive Steve Jobs said in a presentation beamed from San Francisco to scores of journalists gathered in London.

According to Mr Jobs, users with very high speed (5Mb/s) internet connections will be able to download a film in 30 minutes. Most users will have to wait at least twice as long, but films will be playable about one minute after downloading starts.

The move follows Amazon.com’s launch of a rival film download service, Unbox, in the US last week and comes as the internet giants make the first concerted effort to reinvent the video rental business model of the 1980s for the digital era.

Amazon’s Unbox will offer films and other video content from more than 30 partners – including most of Hollywood’s major movie studios. Apple’s sole partnership with Disney, where Mr Jobs sits on the board, could place it at a disadvantage, analysts said ahead of today’s announcement.

However, Apple's service, part of its iTunes music store, will offer the two most popular films in the US so far this year: Disney's Pirates of the Caribbean: Dead Man’s Chest and Cars. Apple hopes the film service will follow the path of its TV downloads equivalent, which started last year with just one network on board and now has more than 40.

With sales of DVDs slowing, Hollywood executives are keen to tap into an online opportunities. However, they fear the cannibalisation of existing markets and are weary of being taken to town by the same online pirates that have bootlegged billions of pounds worth of music online.

According to Cap Gemini as much as 40 per cent of online traffic is being used to download videos illegally, representing millions of dollars worth of lost revenues for Hollywood.

Apple also unveiled a $299 wireless device that will link up home computers to television sets. Codenamed "iTV" and due for US release in the spring, Apple hopes the gadget will attract film buffs who do not want to watch movies on a computer screen and boost take-up of its film download service.

"This completes the story … Apple’s in your den … in your living room, driving your big screen TV, in your car, your pocket. I hope this gives you an idea of where we’re going," Mr Jobs said.

The launch of a new range of iPods in time for Christmas had been hotly anticipated by Apple fans, many of whom who hugely disappointed when the company failed to revamp the world’s most popular music player earlier this year.

Apple said today that its fifth generation (full size) iPods will now be offered with brighter screens, greater storage and longer battery life. The price of a 30GB model will be lowered to $249 while a new 80GB model will cost $349.

The Nano range, the world’s most successful MP3 player, has been completely redesigned and will retail at between $149 (2GB) to $249 (8GB) in the US.

The miniature iPod shuffle has been made much smaller than its predecessor - Mr Jobs said it is "the world's smallest MP3 player" - and will cost $79.

UK prices were not available at the time of writing. To see the new iPods click here.

However, there was no "widescreen" iPod, widely expected by Apple watchers to be launched alongside the film download service.

A revamped iPod was seen as crucial for Apple to stay ahead of its rivals in the field – especially with Microsoft planning a rival player, called Zune, later this year.

Apple has sold nearly 60 million actual iPods and 1.5 billion downloaded songs worldwide, but recent surveys in the US have suggested that the iPod – five years old this year – no longer cuts it among teenage technophiles. This year sales have fallen in two consecutive quarters for the first time – from a record 14 million in the last Christmas quarter to 8.5 million in the following three months and to 8.1 million in the most recently reported three-month period.

The buzz of a new product launch could also draw the spotlight from Apple’s recent corporate woes. The company has been forced to delay its most recent financial results after the company was caught up in the options scandal sweeping much of Silicon Valley and still faces the prospect of being delisted from the Nasdaq Stock Market as a result. It was also recently forced to recall nearly 2 million faulty laptop batteries on safety fears.

Would you buy an "iTV" box and let Apple movies into your living room? Click here to have your say.

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