Steve Jobs’ detailed demonstration of the highly anticipated iPhone topped nearly all expectations and now Wall Street is clamoring to peg how soon and by how much the all-in-one media device would boost Apple Inc.’s bottom line.

In a trademark display of showmanship, Jobs spent the better part of his two-hour Macworld speech on Tuesday walking through features of the svelte iPhone after he plucked it from his jeans pocket. The gizmo merges new ways to make and receive calls, listen to music, watch videos, surf the Internet and perform other functions on the go.

The iPhone goes on sale in June, and Jobs said Apple could sell 10 million of the slim silver and black devices with a touch-screen, a single button and no keyboard in 2008. That would be roughly 1 percent of the number of mobile phones forecast to be sold that year.

“There will be incredible pent-up demand for that product from Day One and that will clearly drive — providing Apple can deliver — profits up almost immediately going into the end of this year,” said Tim Bajarin, president of Creative Technologies, a Silicon Valley consulting firm.

Indeed, Jobs placed the introduction of the iPhone on a par with two other Apple products that he said had transformed the computer and music industries: the Macintosh computer, introduced in 1984, and the iPod digital music player, which debuted in 2001. He said Apple’s intent was no less than to “reinvent the phone.”

Analysts said Apple is well underway in its transformation from principally a computer company to one known more to investors and customers for its elegant uses of hardware and software in products that users find appealing and easy to use.

Even before the iPod appeared in 2001, Jobs had already outlined in 1999-2000 the vision of the Macintosh as “the hub” of a digital lifestyle. Apple’s iLife suite of software preceded the iPod, and the iTunes program and iTunes store are now the cornerstone of Apple’s efforts to distribute and manage mobile digital content.

“Apple has begun its transformation from a computer company to a technology company that continues to broaden its market from computers, to music, to video, and now to mobile phones,” wrote Bear Stearns analyst Andrew Neff in a note to clients.

Neff boosted his calendar 2007 price target for Apple shares to $125 from $100. On Wednesday, shares of Apple gained nearly 4 percent to $96.07, after tacking on more than 8 percent on Tuesday, when Jobs debuted the iPhone.

The Bear Stearns analyst, among others on Wall Street including Deutsche Bank analyst Chris Whitmore, raised his earnings estimates for Apple, citing in part added profits from the iPhone.

Still, Neff and others including Sanford Bernstein analyst Toni Sacconaghi cautioned iPhone could face a hiccup or two from regulators and from an already crowded field of other “smartphones,” most of which cost less than iPhone. Sacconaghi cited what he called the “spectacularly” high price of $499/$599 for a mobile device.

Even so, analysts noted similar carping about the iPod’s original price when it was introduced in 2001: $399 for a five-gigabyte model and $499 for a 10-gigabyte model. Since then, the iPod has become the market-leading digital music player, and Jobs said on Tuesday that Apple would sell its 100 millionth iPod this year.

Apple would likely also, analysts said, follow a similar model with the iPhone that it did with the iPod: Start off with what may seem a steep price, but drop prices as component costs fall and volume production economics kick in, all the while adding more functions and services.

Following that, Apple may introduce cheaper, lower-end versions of the iPhone, much as it did by offering the iPod Mini, iPod Shuffle and iPod Nano, analysts said. The 4-gigabyte Nano is currently the best-selling iPod, not the more capacious, “original” iPod, now in its fifth generation.

“To have a continued impact, Apple would have to do what it did with the iPod and introduce various models,” Bajarin said.

Jobs, in an interview after his keynote presentation, declined specific comment on Apple’s gross margin targets for the iPhone. However, the company has said in past quarterly earnings conference calls that overall margins for its iPods are around 20 percent or more.

In addition to the 12 percent gain in the last two days, Apple’s stock climbed some 18 percent in 2006 after more than doubling in 2005 and tripling in 2004.

“Yesterday Apple underscored the fact that they are no longer just a computer company,” Bajarin said.

Jobs himself said he was pleased with the progress made by the company he co-founded more than 30 years ago.

“The world is going mobile. We sell more notebooks than desktops, iPods are all mobile. The majority of what we sell is mobile,” he said. “We’re always working on new stuff.”

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