Apple Computer Inc. (NASDAQ: AAPL) announced an eagerly anticipated Apple branded cell phone on Tuesday, quelling months of speculation.

At this year's MacWorld in San Francisco, Apple's forum for showcasing its upcoming technologies, the firm’s CEO Steve Jobs revealed the new iPhone, which combines the functionality of the company’s highly successful iPod music player and calling capabilities.

The phone is rectangular, with the entire front surface being a touch screen that has a 16x9 aspect ratio. The device is run entirely by touch. It runs the Mac OS X, scaled down for a cell phone.

Jobs also said the iPhone will be able to play music and videos, with functionality mimicking its video-iPod media player. Internet connectivity is also featured.

Cingular Wireless will provide the wireless service for the phone, the company said.

Apple shares rallied $5.05, or nearly 6 percent, to $90.52 in afternoon trading on the Nasdaq exchange.