Yesterday, Steve Jobs’ made his biannual descent from Cupertino to enlighten the masses with what Apple has been up to for the last six months. The verdict? Largely disappointing. At the start of the keynote, Steve said he had four things for the crowd which turned out to be Time Capsule, the iPhone SDK and software updates, iTunes movie rentals, and the Macbook Air.

The Time Capsule, though obviously a major bullet point in Steve’s presentation, wasn’t given much time on stage. However, that was probably due to the nature of the product. It’s a wireless router with a network hard drive in it. Not all that exciting to demo. Out of all the things announced yesterday, Time Capsule was the one thing I actually would consider buying in the next year. Though, $499 for a 1TB drive and a router seems a little spendy. A similar setup using a router with a USB port and an external hard drive would cost me at least $100 less. I guess that’s why it’s called the Apple tax.

The iPhone/iPod Touch SDK was item number two, but was also glossed over rather quickly. Instead, much of item two consisted of updates to the iPhone and iPod Touch software. Multi-person SMS, triangulation of your location on Google Maps, some new apps, and a customizable home screen were among the features added. These are all things people have been screaming for from the beginning. It’s becoming more clear that despite it’s widespread success, the iPhone v1 that came out last summer is incomplete. Even with all the additions, you still can’t copy/paste, you still can’t get one with more than 8GB of storage, and still no 3G.

Something that really bothered me was they announced 5 new applications for the iPod Touch that cost $20 for anyone who already has a Touch. Anyone who goes and buys one today (or any other time in the future) gets these apps for free. Everyone else who already has one has to pay $20 for them. Why? Did these apps really cost that much to develop? That clearly isn’t the case as the apps are already on the iPhone and they’re being included on new models. Obviously the only people who are going to buy this little software package are current Touch owners. Was the $300 or $400 you already got off these people not enough Apple? What’s $20 when you’ve already spent $300+. Bad Apple, bad.

The third item of the day was has been expected for some time now: iTunes movie rentals. The big surprise was they managed to get all the major studios on board and they completely redesigned the Apple TV interface so rentals without a computer are possible. The fact that you can rent movies isn’t such a big deal. Netflix, Blockbuster, Amazon, and others all have made this available for awhile. The killer feature is that you can do it right on your TV and without any computer. It’s now a stand alone box, not an accessory. To top it off, new Apple TV’s are $70 cheaper than before and existing owners get a free upgrade.

The price $3.99 for new releases, $2.99 for other titles is spot on. However, the fact that you have to watch it within 24 hours is not. Make it 72 hours. Give me a weekend. I buy something on Friday night, but end up going out instead. I should be able to watch it on Sunday when I have the time. And the HD versions (sold at a $1 premium over their standard def counterparts) can only be rented on the Apple TV, not through your computer. I suspect that restriction came from the movie studios paranoia about piracy, not from Apple itself. Good Apple, (mostly) good!

The final line item was the Macbook Air; a $1800 ultra-portable laptop. Just as with the movie rentals, ultra-portable laptops are nothing new. However, no one is quite able to do things like Apple does. The Air is super thin; Apple claims the world’s thinnest. I’m still not sure if that means it’s more sexy or more flimsy. The other notable thing about the Air is it is virtually devoid of ports. It’s got 1 USB port, 1 Mini DVI port, and a MagSafe connector for power. There is no optical drive and there is no ethernet port. I guess thinness comes at a price.

After sitting on it for a day and reading all the fallout online, I’m still trying to figure out where the Air fits into Apple’s lineup. The two sweet spots they don’t cover is enterprise workstations and the mid-range desktop and these are two areas of the market Apple has said they don’t want to go after. Back to the question at hand. Who is this machine targeted at? The type of person who is going to buy this (besides the type who just want you to gawk at their expensive toys) is someone who doesn’t need to do a lot of heavy work and someone who doesn’t have much of a budget. The only group of people I can see fitting that profile is writers. What kind? Columnists, novelists, freelancers, and the like. They are probably traveling quite a bit. Their primary needs are word processing, email, and internet connectivity. However, it doesn’t make sense that Apple would release a computer for such a small niche of consumers. They clearly have something else in mind and I can’t quite put my finger (or mouse pointer) on it.

After hearing about all of the announcements, my overall feeling was one of disappointment. There was nothing in this keynote for me. None of it made me want to run out and buy it right away. None of it had me checking my bank account and making exceptions in my budget. Is that selfish? Sure, but Apple has conditioned me. The thing I was hoping for most, a 32GB + iPhone with 3G, wasn’t even hinted at. Not even a 16GB version like the iPod Touch. There was indeed something in the air yesterday at Moscone Center and it smelled slightly foul.