Handheld convergence took a leap forward today with Apple’s introduction of the iPhone. Steve Jobs unveiled the new device during this morning’s keynote session at Macworld Expo in San Francisco.

Rumors leading up to Macworld suggested the iPhone would be a hybrid device combining iPod functionality with a cellphone, but Apple took it a step further than most expected: the iPhone runs Apple’s OS X, which gives it a robust infrastructure for software applications. In essence, it’s a mini laptop that also acts as a phone and a digital media player.

The iPhone will come in 4GB and 8GB models and will retail for $499 (4GB) and $599 (5GB). This is a considerable jump from other smartphones, such as Palm’s Treo, which generally sell for $299 with a cellular service contract. Top-tier standalone iPods sell for $349.99.

Speaking of contracts ... the iPhone will be availble exclusively through Cingular and Apple beginning in June of this year. The total cost ($499 or $599) includes a two-year Cingular contract.

In other Apple news, Jobs also took the wraps off the previously announced iTV device. Now known as Apple TV, the device features a 40GB hard drive, support for Wi-Fi (802.11 b, g and n), connections for USB, Ethernet, HDMI, component and optical. It displays video in 720p and can stream audio and video content from up to five computers. The $299 device is available through Apple.com and will begin shipping in February.