SAN FRANCISCO - Steve Jobs stepped back into the spotlight for the first time in nearly a year on Wednesday, drawing a standing ovation before unveiling new and cheaper iPods for Apple Inc.
But Apple's shares closed 1 percent lower after hitting a year's high in the session.
Analysts said they dipped because investors took profits after a steady run-up in the days before the event. One analyst also pointed to Jobs' appearance, saying the 54-year-old chief executive looked "frail."
Dressed in his trademark black turtleneck and jeans, Jobs took the stage and thanked everyone in the Apple community for their "heartfelt support."
Jobs, a pancreatic cancer survivor, spoke with characteristic passion about new products and dropped his signature line - "one more thing" - before introducing a new iPod nano with a video camera.
It was his first public appearance since returning to work in June after six months of medical leave, during which the charismatic corporate showman underwent a liver transplant.
"I now have the liver of a mid-20s person who died in a car crash and was generous enough to donate their organs.
I wouldn't be here without such generosity," an emotional Jobs told the audience, urging them to all become organ donors.
"I feel great. I probably need to gain about 30 pounds, but I feel really good. I'm eating like crazy. A lot of ice cream," Jobs later told the New York Times in a short interview.
Apple shares initially rose about 1 percent to a year's high before retreating to close $1.79 lower, or 1 percent, at
$171.14 on Nasdaq.
"I'm sure (Jobs) looking so frail - the guy's had the most extreme surgery you can have - didn't help matters, but I
think people have come to grips that the torch is going to be passed. It's just a matter of when," said Dave Rovelli,
managing director of U.S. equity trading at Canaccord Adam.
"The stock's had such an incredible move, I wouldn't read too much into it. It's probably just some profit taking."
Apple's stock has doubled this year, valuing the company at US$155 billion - triple that of smartphone arch-foe Research in Motion - and second only to Microsoft's US$221 billion among tech companies on the S&P 500.
Jobs started off by announcing a new version of Apple's popular online media store, iTunes, and updated software for the iPhone.
He then unveiled new iPod features and colours, and announced price cuts for other models ahead of the crucial holiday season.
The audience at the event in San Francisco included Google Inc Chief Executive Eric Schmidt, who recently stepped down from Apple's board amid increased scrutiny from regulators about the companies' ties.
Since late last week, analysts had been expecting Apple's stock would get a boost from an appearance by the company co-founder. The shares rose in the afternoon to $174.47, their highest since Aug. 28, 2008. But they quickly retreated.
With Jobs back as the public face of Apple, some were already looking ahead to what the company may have in the
There was no sign of the much-talked-about tablet device, which many observers now say is more likely to emerge later this year or next. Never confirmed by Apple, investors hope it will become Apple's next growth catalyst.
Analysts say the company is working on a touchscreen device - some have labeled it an "iPad" - that may resemble a larger version of the iPod touch. It would be a connected device perfect for movies, games and surfing the Internet with an affordable price point, below US$1,000.
Apple's last big game-changer, the iPhone, launched more than two years ago but has many years of growth ahead of it.
From a product standpoint, Wednesday played out as predicted.
"The announcements that were made were not particularly surprising - a lot of it was expected. But on the flip side,
Steve Jobs making an appearance was definitely a pleasant surprise," said Kaufman Bros analyst Shaw Wu, who also saw profit-taking depressing the stock in the afternoon.
"We still think the stock trends higher into year end. We think this is one of the better, if not the best, play on the
smartphone trend as well as the trend to digital media."
Jobs's return was well-timed. The holiday season is a critical period for Apple, as it is for many consumer
electronics companies, as shoppers fill stores and spend their precious discretionary income on the latest gadgets.
Apple's iPod commands more than 70 percent of the US portable media-player market, and its popularity - together
with the iPhone and Mac computer - have helped Apple grow into a consumer electronics giant.
December-quarter sales made up around 30 percent of Apple's revenue last fiscal year.
On Wednesday, Jobs announced price cuts on most of the iPod range, including a US$30-cheaper, US$199 touch. He also announced the addition of a video camera, FM radio and pedometer to its mid-range nano.
Apple said it has sold more than 100 million nanos to date.
It has sold over 30 million iPhones, along with 20 million touches.
With no revolutionary products on tap, much of the attention was focused on Wednesday on Jobs himself.
Jobs stepped away from day-to-day operations in January after months of rumors about his health and noticeable weight loss. He returned early this summer, but had not been seen at a public event until Wednesday.
Some analysts had speculated that Jobs would not turn up so as not to steal the spotlight from Apple's new products.
But Jobs is also famous for his attention to detail and the huge amount of control he exerts over Apple and its products.
"A greater question for Apple at the moment is ... what is the health of the consumer, who is really their core customer, in the fourth quarter?" said Daniel Ernst at Hudson Square Research.
"We have unemployment nearing 10 percent and Apple's still growing better than the rest of tech, but it's still an issue."