'It's showtime' for Apple
2006-09-12 14:01
Los Angeles - Apple Computer Inc scheduled an event for Tuesday and sparked a frenzy of speculation about its plans with a typically cryptic invitation to the gathering in San Francisco that offered little by way of details. It proclaimed simply: "It's showtime."
Over most of the past year the company has directed most attention towards its transition to using computer chips from Intel in its Mac desktop and notebook computers.
Now, with Apple's recent completion of its transition away from using the PowerPC microprocessors produced by IBM, analysts and company watchers expect the firm will begin a steady stream of consumer-gadget announcements.
David Bailey, an analyst at brokerage Goldman Sachs, said he expects Apple will use the event to refresh its iPod family, unveiling higher-capacity models based on flash memory to replace its nano and shuffle products. He recently told clients in a note that Apple could also update its video iPod.
The analyst said he also expects Apple to add downloads of movies to its iTunes service that currently allows computer users to download music and video files, including episodes of popular television programmes.
Selling movies through iTunes could not only help boost Apple's iPod sales, but may also telegraph a bigger push into the potentially lucrative home-theatre segment and help it capitalise on the multibillion-dollar market for DVD rentals and sales.
The company could nab a meaningful portion of the DVD market with an expected film download service, according to Pacific Crest Securities analyst Steve Lidberg.
Concerns have surfaced
"By adding full-length films to iTunes, Apple could take a meaningful share of the DVD market, which achieves nearly $8bn in rentals and $24bn in sales yearly," Lidberg wrote in an investment note.
Concerns have surfaced that Apple could undercut the prices of major DVD retailers and some studios could fret about Apple's dominance, causing them to pass on getting involved with the inaugural service, said Bailey at Goldman Sachs.
Nevertheless, Apple is likely to have a number of major studios lined-up for its launch and is likely to minimise the number of pricing options, he said.
Apple spokesperson Steve Dowling recently had no comment about what the company will showcase at the event, though its invitation gives more than a subtle hint that Apple will make at least something to do with Hollywood movies.
Industry analysts recently have said Apple is likely to unveil a new iPod to replace its tiny nano player, increasing its memory beyond a current four-gigabyte maximum level.
Apple hasn't upgraded its iPod line since last September, when it rolled out the nano and new iPods capable of playing music videos. Since then, the company has added more than 9 000 music videos for sale, as well as episodes of more than 200 television shows to go along with its library of at least three million songs.