The star of the show is the MacBook Air, an incredibly sleek and thin notebook. Billed as an ultra portable, it embraces wireless technologies and drops older technologies, including the optical drive.

My old PowerBook G4 is still alive and kicking, and serving my needs fine. So its the updates to other products that I’m most excited about.

Apple TV, a favorite gadget of mine, got a much-needed boost today. Movies can now be rented from the iTunes Store, and Apple TV has direct access. It’s no longer necessary to download a video into iTunes, and then sync it over to Apple TV. This will make it much more convenient to watch the latest releases.

One new product I am considering purchasing is Time Capsule. Dubbed a NAS device in tech lingo, it is essentially a hard drive that can be plugged into a network and shared amongst multiple computers.

I’ve tried several of these types of devices in the past, and never been very happy with them. I’m hoping that Time Capsule changes that. I’m waiting to read reviews, but indications are it’ll be simple to set up and well supported on Mac OS X. If that’s true, I’ll likely end up purchasing a capsule or two.

With any luck, I’ll manage to sneak over to the Moscone Center this week to catch a first-hand glimpse of the new wares.

With iPhones in hands, people can now properly address its impact on the future. Umair Haque, writing at Bubblegeneration, offers his perspective on Apple’s strategy:

1) Pick an industry which sucks (ie, imposes significant nuisance costs/menu costs/externalities on consumers)
2) Redress the imbalance by making something consumers love
3) …Which disrupts the long-standing industry equilibrium, and shifts market power
4) Use said market power to redesign (a hyperefficient) value chain

It is eerily similar to the strategy Apple is using to dominate the music retailing industry with iPod + iTunes. I think things are even more interesting when looked at in the broader context of Apple and its products.

“Three screens” is a common term in the vernacular of the technology industry. It refers to the unique types of displays present on desktop computers, televisions, and mobile devices. These comprise the three devices a typical person interacts with every day.

Each screen presents an interface tailored to the situations it is used in. For example, a computer is actively controlled from within a couple feet, using a keyboard and mouse. Meanwhile, a television is more passive, controlled with a few buttons on a remote control while relaxing on couch.

Apple has now put roots down in each of the categories represented within the three screens. Mac computers are mature and respected. The promising iPhone has now been introduced. Meanwhile, the experimental Apple TV continues to improve.

Apple’s focus on user experience, coupled with their control of both hardware and software, gives them a unique advantage and incredible leverage. With technology’s ever increasing pervasiveness in our lives, Apple’s potential seems almost limitless.

During the interview, Jobs referred to Apple TV as a hobby, as opposed to a core business, for Apple.

The reason I call it a hobby is a lot of people have tried and failed to make it a business. It’s a business that’s hundreds of thousands of units per year but it hasn’t crested to be millions of units per year, but I think if we improve things we can crack that.

The YouTube integration is a step towards improving things.

Recently, some have criticized the device, calling it a dud. “Zune-like” even, which really stings. But those criticisms are missing the mark. As a hobby, Apple is free to experiment and find the sweet spot that transforms Apple TV into a business.

YouTube is currently encoding its library in H.264, a compression format designed for efficient streaming. The software update for Apple TV will be available in mid-June.

The installation was simple and easy. I connected it to my television with an HDMI cable and plugged in the power. As soon as it was running, iTunes discovered the device and set-up was completed.

Movies and music play back flawlessly. Media can either be be synced to the device or streamed from iTunes. Additionally, the latest trailers can also be streamed directly off the Internet from Apple’s website.

It will be very interesting to watch where Apple takes this device. Because the software can be updated automatically, Apple can refine the interface and expand its capabilities.

If you own any videos purchased from the iTunes Store, Apple TV is a great addition to an entertainment center. I’ve posted photos of my system on Flickr.

Since I only receive over-the-air broadcasts, I download episodes of TV shows that are only available on premium channels. I’m looking forward to being able to watch these on my Samsung HDTV.

As with most products from Apple, there has been a lot of speculation about what direction the company will take moving forward. One prediction is the addition of DVR capabilities, similar to TiVo, that would allow TV shows to be recorded and watched later.

Dave Zatz claims that Apple TV is not a DVR, because “Apple has not hidden a tuner or any video inputs in the box.” While he’s correct about what is “in the box,” I’d expect a little more “out of the box” thinking from someone employed by Sling Media. Because of the increasingly ubiquitous home network, which Apple TV is connected to, the TV tuner does not need to reside in the box.

Indeed, it is easy to imagine future AirPort Extreme models including a TV tuner. The delivery mechanism, be it cable, satellite, or over-the-air, can be abstracted away in software and translated into an RTP stream. That stream can then be played and recorded by Apple TV.

This is the era of convergence that everyone likes to proclaim, and Apple is positioned perfectly. Their suite of simple, easy to use products are well understood and accepted by the consumer market.

The Apple TV had been previously announced, under the code-name iTV. It’s a set-top box that lets movies downloaded from iTunes be watched on a widescreen TV. It’s also capable of playing music from iTunes and displaying photos stored in iPhoto.

The highlight of the keynote, however, was iPhone. It combines a mobile phone, an iPod, and Internet connectivity into a single unit. It does all that with Apple’s signature ease-of-use and revolutionary thinking. The QuickTours available at the iPhone site are amazing. This device is stunning.

The iPhone will be available in June from Cingular, its exclusive carrier. I’m currently a Verizon customer, but that may soon change. I’ve recently been considering switching carriers, in order to upgrade to a BlackBerry Pearl. However, I may put that off and wait for the iPhone’s release.

The keynote address from Macworld San Francisco 2007 is available for viewing online. I’m about to watch it right now…