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Video-Playing IPod May Be Next Big Thing From Apple

October 06, 2005|Terril Yue Jones | Times Staff Writer

Apple Computer Inc. revolutionized music with the iPod. Is video next?

The secretive computer maker has scheduled an announcement for next Wednesday that industry experts widely expect will be the debut of an iPod that plays videos.

Although Chief Executive Steve Jobs revels in leading prognosticators astray, Apple's entry into the fledgling market for portable video could broaden the appeal of watching movies and television shows on the go -- and potentially create new revenue streams for studios and networks.

But, analysts cautioned, Apple may find that breaking into video will be significantly tougher than the wildly successful ride it has enjoyed with the iPod. Unlike music, which people have carried with them since the transistor radio, video is usually watched at home on the couch.

"I'm not sure what the level of demand for portable video really is," said Mike McGuire, a personal technology analyst with Gartner Inc. "It's questionable."

But the market is growing.

Sony Corp.'s PlayStation Portable game player, for instance, plays movies on its relatively small screen. Sony and other studios were surprised by the demand for titles that work on the device, and now twice as many movies as games are available for the game player.

"It exceeded our expectations because it's a whole new business," said Ben Feingold, president of Sony Pictures Home Entertainment.

"I think it's important we migrate with lifestyle ... as people spend more time commuting in places where they have what I call variable spare time -- like at the carwash," he said.

Analysts said they expected Apple to offer short clips through its iTunes Music Store.

"From our understanding, the first set of video content available from the iTunes store will be music videos and video podcasts," American Technology Research analyst Shaw Wu wrote in a research report. "At this point, we do not anticipate full-length feature movies but would not be surprised to see some test movies in the future."

Podcasts are audio or video programs that can be automatically downloaded onto a portable device, usually at no cost.

Key to the success of any player would be Apple's ability to secure material that people want to watch and to safeguard it against widespread copying. In addition to running Apple, Jobs is chief executive of Pixar Animation Studios and has strong ties in Hollywood.

Apple declined to comment.

Speculation that the company would unveil a video iPod has circulated for months. It intensified Tuesday, when the company e-mailed an invitation to journalists that said "One more thing" against the backdrop of what looks like a movie theater curtain. "One more thing" is a phrase that Jobs often uses during product launches.

"When Steve Jobs says 'one more thing,' that's usually when the bombshell drops," Michael Gartenberg of Jupiter Research said.

A rival maker of portable media devices said Wednesday that it would welcome Apple's entry into the video device market.

"I think we'd be happy that there would be more visibility to this market sector," said Lisa O'Malley, a brand manager for Creative Labs, which makes Zen portable media players. "Anyone joining the market would encourage the content providers to make more content available -- TV and movie studios, music labels."

But it could be a mixed blessing. Many of the portable video players already on the market use technology from Microsoft Corp. Apple, on the other hand, has no built-in way for its Macintosh computers to capture television the way many PCs running Microsoft Windows do.

That could change.

"If Apple is true to form they'll have a tightly integrated hardware, software and services offering that will be a better experience than people have gotten to date on portable media players," said Roger Kay, president of Endpoint Technologies.

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Times staff writer Julie Tamaki contributed to this report.

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