SAN FRANCISCO: Apple Inc., seeking to revolutionize the publishing business in the same way the iPod transformed the music industry, unveiled a tablet computer starting at $499, a price that was 50% lower than some analysts predicted.

The iPad can display full Web pages, books and iPhone applications, and has a touch-screen keyboard, Chief Executive Officer Steve Jobs said today at a company event in San Francisco. The product will come in two versions: one with just a Wi-Fi connection and another that also uses third-generation mobile-phone service. Apple rose in Nasdaq trading after the announcement, erasing an earlier decline.

"At that price, they'll sell millions," said Hakim Kriout, a portfolio manager at New York-based Grigsby & Associates, which owns Apple shares. "It's very, very affordable for what it does. This is going to add a huge revenue stream for Apple."

Jobs, 54, has spent the past decade transforming the maker of the Mac computer into a consumer-electronics juggernaut. The iPad builds on the digital media and mobile technology behind Apple's market-leading iPod and the iPhone, and will challenge dedicated e-book readers from Amazon.com Inc. and Sony Corp.

'Magical and Revolutionary'

The iPad is "our most advanced technology in a magical and revolutionary device at an unbelievable price," Jobs said. The iPad, which has a 9.7-inch (25-centimeter) color screen, is half an inch thick and weighs 1.5 pounds (0.7 kilograms). It will go on sale in late March.

A 16-gigabyte version of the basic Wi-Fi model will sell for $499. A 32-gigabyte version will cost $599, and a 64- gigabyte device will be $699. The 3G models won't be available until April. Those will range in price from $629 to $829.

Amazon.com's Kindle, the market leader in electronic books, costs $259 for a version with a black-and-white 6-inch display. A model with a 9.7-inch screen costs $489. Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co. in New York, had predicted that the Apple tablet would cost about $750.

Sony's most expensive e-reader, which has a wireless connection and a 7.1-inch screen, costs $399.99. Smaller models sells for $299.99 and $199.99.

Apple unveiled an electronic-book reader application for the iPad and is opening an e-book store. Pearson Plc's Penguin, Harper Collins Publishers, CBS Corp.'s Simon & Schuster, Macmillan and Hachette Book Group have already signed deals to offer electronic books on the iPad.

Drew Herdener, a spokesman for Seattle-based Amazon.com, didn't immediately respond to a request for comment.

Stock Climbs

Apple, based in Cupertino, California, rose $1.94 to $207.88 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares, which more than doubled last year, climbed to a record $215.04 earlier this month on speculation that the tablet was coming.

The device runs the more than 140,000 applications already available for the iPhone and iPod Touch. It works with wireless service from AT&T Inc., the U.S. carrier for the iPhone, though no contract is required.

There will be two iPad wireless data plans from AT&T in the U.S. One will cost $14.99 and give users up to 250 megabytes of data downloads. The other will have unlimited data and cost $29.99. The company is also working on adding international wireless plans.

'Gigantic Win'

The device, made of aluminum and glass, can display maps from Google Inc., and has calendar and address-book functions. The iPad has a 1-gigahertz chip that was custom designed by Apple and battery life of 10 hours, Jobs said.

"The fact that there's more flexibility in this device is going to give it a pretty significant competitive advantage over Amazon's device," said Michael Yoshikami, an analyst at Walnut Creek, California-based YCMNet Advisors. "The price is a gigantic win. The non-3G model at $499 is very surprising."

Jobs, who had a liver transplant last year, looked healthier during the presentation, Yoshikami said.

"He looked better than the last time he appeared," Yoshikami said. "He seemed enthusiastic and it frankly didn't really strike me -- I didn't even think about it."

More than 60 million Apple shares changed hands today. That follows trading yesterday of 66.7 million shares and marks the two busiest days for Apple's stock in more than a year.

'Is There Room?'

"The question has arisen lately: Is there room for a third category of device in the middle, something that's between a laptop and smartphone," Jobs said. "Those devices are going to have to be far better at doing some key tasks. What kind of tasks? Well, things like browsing the Web, doing e-mail, enjoying and sharing photographs, watching videos, playing games."

Apple executives in the audience included Chief Operating Officer Tim Cook and marketing vice president Phil Schiller. Former U.S. Vice President Al Gore, an Apple board member, was also at the event.

Apple, which reported a 32% jump in holiday sales this week, relies on the Mac for about a quarter of its revenue. The iPhone brought in about a third of sales last quarter, while the iPod represented 22% of revenue. Apple has sold 250 million iPods, Jobs said today.

Demand for Apple's traditional iPod music players is falling as consumers switch to multifunction devices like the iPod Touch, which has Wi-Fi support, and smartphones that can also play music and video, like the iPhone. IPod shipments fell 8% last quarter to 21 million units. Sales of the iPod Touch rose 55%.

Apple is releasing a new software development kit for creating iPad applications, though existing iPhone programs will run on the device without being modified.

The iPad should create "a whole other gold rush" for developers, said Scott Forstall, a senior vice president in charge of iPhone software. Apple plans to highlight programs developed specifically for the iPad on its App Store.