Apple to unveil video iPod at Macworld expo

By Duncan Martell

SAN FRANCISCO: When Apple Computer Inc. rolls out its new products next week before a throng of Mac enthusiasts at the Macworld conference, observers expect the biggest buzz to surround the smallest gadgets.

This year analysts and Apple watchers expect the iconic computer maker to unveil some kind of digital, handheld device -- possibly an extension of its popular iPod music player.

A new Macintosh computer, like the swiveling, flatscreen desktop iMac that stole the show at last year's Macworld, won't likely share the stage with Apple's charismatic Chief Executive and No. 1 salesman, Steve Jobs, analysts said.

Apple is as always, tight-lipped about its plans, but it may unveil a version of its popular iPod music player that will play movies, said analyst Rob Enderle of Giga Information Group.

Another possibility, though far less likely, is a handheld personal digital assistant, but Enderle said that product will not come next week.

Dell Computer recently announced its own handheld PC, and other analysts said it was a long shot that Apple would follow so soon.

This time analysts don't expect any major computer introductions, in part because there is a good deal of Macintosh inventory in distribution channels.

"The one thing you can say for sure is that they do have a lot of product out there right now and they're going to be hesitant to draw too much attention away from their existing products by introducing new ones now, " said Roger Kay, an analyst at market research firm International Data Corp.

Instead, Apple may unveil the long-anticipated video-enabled iPod, which will likely work initially only on Macintosh computers, Enderle said.

Chief Executive Steve Jobs is also seen as making a major push to encourage the Mac faithful at the trade show here to upgrade to its latest operating systems, OS X.

Apple declined to comment on its announcements for Macworld.

The slick operating system, which has drawn reviews praising its stability and user-friendliness, will be touted by none other than Apple co-founder Steve Wozniak in a panel discussion entitled, "The Move to Mac OS X," said IDG World Expo, the firm that produces Macworld and other trade shows.

More sales of Mac OS X mean more software revenue for the company, and consumers may be enticed to buy the latest and fastest Mac computers to take advantage of OS X. Analysts said that a good goal would be to push the percentage of Mac computers using OS X past 50 percent.

Many have been expecting an announcement for some time about its next-generation G5 microprocessor. However, Apple has not yet made a decision about whether to continue to get its processors from International Business Machines Corp or even to move to processors from Intel Corp.

"The existing processor is running out of steam and Apple will make a processor change in the next 12 months," Enderle said.

"So expect product announcements based on that new processor next year, because they'll move either to Intel or to the IBM version of the PowerPC."

The current PowerPC chip is made under a partnership between IBM and Motorola Inc. "It seems unlikely they would be able to announce such a move now," Enderle said.

Seeking to expand its strategy of making and selling computer-linked products and software it sees as central to the "digital lifestyle," Apple also just this week launched its iSync 1.0 software.

The software enables the synchronization of personal information management applications among Macs and a myriad of gizmos, including PDAs and mobile phones.

Apple's strategy has also been to make innovative, bold computer designs -- such as the flat-panel iMac and the original iMac, which debuted in 1998 and sported an all-in-one design with a translucent case and berry colors -- which consumers will be willing to pay more for than PCs using Microsoft's Windows operating system.

"What they have been doing and what they intend to continue to do is win at what I call the Milanese Fashion Game," Kay said. "They come out with some extremely cool products, but at a somewhat higher price comparatively, but still cool enough that people will buy them."

In terms of Apple's market share, not much has changed in recent years, Kay said. Apple's worldwide share of the personal computer market is between 2 percent and 3 percent, and between 4 percent to 5 percent in the United States.

In October, Apple, which is based in Cupertino, California, reported its first quarterly net loss in nearly two years, hurt by investment losses, and warned that it did not expect strong holidays sales for the PC industry.

Apple is scheduled to report its fiscal first-quarter results after the close of regular U.S. trading on January 15.

© Reuters