Wi-Fi iPod Expected Soon

Joint chip development by PortalPlayer and CSR would enable wireless iPods.

February 10, 2006

Apple shares jumped 3.6 percent Friday on speculation that the company will soon introduce wireless iPods that could download music and videos from anywhere.

The talk came after chip maker PortalPlayer and CSR, a Bluetooth tech company, said they’ve added Wi-Fi and Bluetooth technology on chips used in personal media players. The companies didn’t say which media player, but promised to demonstrate their joint product within a few days at 3GSM in Barcelona.

About 95 percent of PortalPlayer’s business comes from iPod-related sales, according to CFO Svend-Olav Carlsen, and that fact suggests Apple plans to use the chips in its red-hot devices.

“Having talked to PortalPlayer recently, it seems very probable we’re going to see a Wi-Fi-enabled iPod in the next six months,” said Chris Crotty, senior analyst of consumer electronics for iSuppli.

Apple didn’t reply to RedHerring.com’s requests for comment. Investors, however, liked the idea enough to lift Apple shares $2.36 to $67.31. To be sure, that’s still well below the high of $86.40 set January 12 during Macworld, the company’s unrelentingly upbeat trade show.

‘Instead of a phone, maybe in a year Apple could have a VOIP-enabled iPod.’

-Chris Crotty,

Portable media players with Wi-Fi and Bluetooth built into their processors would be able to wirelessly sync content with a PC, download content like podcasts directly from the Internet, and access the Web through Wi-Fi hotspots or city Wi-Fi networks.

“Consumers will no longer have to dock their media player to change playlists or add new songs, photos, and videos,” said Scott Tandy, vice president of marketing for PortalPlayer, based in Cambridge. He called wireless personal media players a “rapidly growing segment.”

Allowing iPod users to hook into the Internet via Wi-Fi could greatly expand the Wi-Fi market. In the United States—iPods’ largest market—cities are expected to spend $405.6 million on Wi-Fi networks in 2007, and could charge users about $25 per month for access.

iSuppli’s Mr. Crotty said a move to make iPods wireless makes business sense for Apple’s iTunes service, which sells audio and visual content on the web.

Phone Hangup

Observers have questioned the viability of an iTunes-enabled phone, because cellular carriers would want to share in profits made by selling iTunes content through Internet connections made on carriers’ networks (see iTunes Phone Seen as Imminent).

“To come up with a Wi-Fi option instead, Apple wouldn’t have to talk with carriers about download [charges],” Mr. Crotty said.

He also pointed to another announcement by CSR—a chip that would enable personal devices with VoIP. That would make moot theories that Apple could be planning to make its own mobile phones.

“Instead of a phone, maybe in a year Apple could have a VoIP-enabled iPod,” said Mr. Crotty