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In his keynote address, Steve Jobs began by announcing the new Ringtones feature for iPhone users. iTunes 7.4 will be released shortly, and this service will go live next week.

iTunes users will be able to select the part of the song, its duration, apply fade in and fade out, and a gap between loops.

Apple will price the ringtones service at $0.99 in addition to the cost of the song: a total of $1.98. A new column in the iTunes Store indicates participating tracks with a bell icon.

Jobs created a ringtone from Aretha Franklin's Respect. Continuing that theme of bridging the divide, he played a ringtone from "Give Peace A Chance" and joked, "That's when NBC calls" in direct reference to the loss of NBC programmes from the iTunes Store due to an alleged pricing dispute with Apple.

There was no indication whether this service will launch alongside the iPhone in Europe.

UPDATE: iTunes 7.4 is now available for download from Apple's website or via Software Update in Mac OS X.