One analyst thinks the computer maker may use a media event later this month to reveal an MP3 device that plays videos.

October 4, 2005

News from Apple Computer Tuesday that it’s planning a media event a day after it releases financial results later this month has renewed talk of a video-playing iPod or video download service from the computer maker known for its splashy product launches.

The event, which was announced by an email sent to media, is scheduled for October 12 in San Jose, California. That’s a day after the company is expected to release its report for its fourth quarter ending September 30.

Wall Street expects Apple to earn $0.37 per share on sales of $3.7 billion, according to a consensus of 25 brokers surveyed by Thomson Financial.

Apple was tight-lipped about the event, with a spokesman declining to comment.

But analysts had their guesses.

“Our bet is that it’s a video iPod,” said Piper Jaffray analyst Gene Munster. “If so, the big question is, would it also be able to download videos from iTunes?”

For some time, there has been speculation that Apple would add video capability to its best-selling iPod MP3 device. In the same vein, Apple could negotiate licenses with music labels for the rights to sell music videos at its iTunes Music Store (see iTunes Eyes Video Deal: Source).

Apple’s latest product launch in early September featured the release of its newest iPod, the nano. At the same event, Apple together with Motorola recently rolled out the ROKR phone capable of playing songs from the iTunes Music Store (see iTunes Phone, New iPod Debut).

Company watchers have speculated that Apple could create its own iTunes-playing phone (see iTunes Phone Seen As Imminent).

But Pacific Crest Securities analyst Steve Lidberg said a video download service makes more sense, especially if it offers more than just music video content. He said television shows could be viable, though movie downloads may currently be problematic due to file size.

“The area they need access to is the living room and the television set,” said Mr. Lidberg, adding that a video-capable iPod wouldn’t have to be in place before moving picture downloads over iTunes or a similar service becomes available.

The company could have long been planning to provide on-demand video content for a variety of media. Apple’s June release of the latest version of its QuickTime media player works on mobile devices, video conferencing, and high-definition broadcast and DVD players.

“It’s probably consumer-related and geared toward the holidays,” said Mr. Lidberg, referring to the upcoming event.

Visual Entertainment

The idea of visual entertainment seems to go along with the theme of the invitation, which is decorated with a picture of a red velvet curtain. Apple’s email announcements sometimes hold clues that aren’t usually apparent until after the release of the news.

The invitation for a September confab featured a photo of a pair of blue jeans. At the event, Apple CEO Steve Jobs first showed off the slim nano to the world by pulling the device out of the hip pocket of his jeans.

The nano, a flash-based music player that holds 1,000 songs, upstaged the ROKR, the widely anticipated iTunes-enabled cell phone. The event was rumored to cause a rift between Motorola and Apple (see ROKR Marriage Rocky).

Then again, Apple recently angered some music labels when Mr. Jobs called them greedy for wanting to charge more than $0.99 for some songs (see Bronfman Fires Back At Apple). So Apple-sold video content may indeed have to go beyond music clips.