Apple Inc will start renting movies over the Internet, Chief Executive Steve Jobs said on Tuesday, moving the iPhone and iPod maker into a very competitive market.

Jobs also unveiled a notebook computer that was less than 0.8 inches thick, called the Macbook Air.

With Web movie rentals, Apple takes on DVD-by-mail rental service Netflix Inc, which also allows online viewing, as well as a host of others eager to make it possible to watch movies easily and instantly over the Web.