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Video iPod, TV Deals Expand Apple Platform "Desperate Housewives" $1.99 Day After Network Airing

Posted on: Thursday, 13 October 2005, 18:00 CDT

SAN JOSE, Calif. - Apple Computer Inc. introduced on Wednesday an iPod capable of playing videos, evolving the portable music player of choice into a multimedia platform for everything from TV shows to music videos.

Videos will now be sold online alongside songs on Apple's iTunes store.

Citing a groundbreaking deal with ABC Television Group, Apple Chief Executive Steve Jobs said video offerings via iTunes will include episodes for $1.99 each of the hit shows "Desperate Housewives" and "Lost," which will be available the day after they air on television.

The unveiling came along Wednesday with two other technological announcements:

Microsoft Corp. and Yahoo Inc. said they are making their instant messaging programs work together, just as the popular communications tool is beginning to expand into such fields as video chatting and Internet telephone functions.

For now at least, the two companies said their partnership will focus on traditional instant messaging, allowing people with either system to send lightning-fast messages to each other. That is expected to be in place by June.

Eventually, the companies said, they hope to be able to let users make computer-to-computer phone calls as well, but couldn't say when that would happen.

The partnership could give the companies more power to compete against market leader America Online and perhaps dark horse Google Inc., which launched its own service, Google Talk, in September. In the long run, it may also provide a way to battle companies such as Skype Technologies SA, the Internet phone provider being acquired by eBay Inc.

Nokia Corp., meanwhile, joined the swelling ranks of would-be BlackBerry killers Wednesday, unveiling its first keyboard phone with a similar look and feel of the e-mail device made by Research In Motion Inc.

The Nokia E61, due out in the first quarter of 2006, follows the introduction of non-"clamshell" devices from Hewlett-Packard Co. and Motorola Inc. that also feature a typewriter keypad for thumb tapping.

The look and feel was first popularized by the BlackBerry from RIM and then also by Treo from Palm Inc.

The worldwide market for mobile devices configured to connect with corporate e-mail systems in real time remains tiny compared with the overall cell-phone industry, accounting for just 8 million devices, according to Gartner Inc. But the market is growing fast. RIM, which accounts for nearly half the market with 3.65 million BlackBerry users, reported last month that it sold 620,000 devices during its just-ended quarter.

With the Apple video iPod unveiled Wednesday, the purchased video can be watched on a computer or taken on the road for viewing on the new iPod's 2.5-inch color screen.

The much-anticipated new iPods, available starting next week, will replace Apple's current 20-gigabyte and 60-gigabyte models. A 30 GB version will sell for $299 and a 60 GB will cost $399.

Apple hopes to repeat with Hollywood the coup it achieved with music labels: Ease an industry's piracy fears and transform its business models to include convenient, legal distribution of digital content over the Internet at reasonable prices for consumers.

"It's never been done before, where you could buy hit TV shows and buy them online the day after they're shown," said Jobs, whose other company, Pixar Animation Studios Inc., has a long relationship with ABC's parent, The Walt Disney Co. Short films from Pixar also will be sold via the iTunes store.

But that's just the beginning, Apple executives say, noting that the iTunes store catalog has grown to 2 million songs from 200,000 at launch in 2003. More than 600 million downloads have been recorded.

"We've gained a lot of credibility in the industry in the past 2 1/2 years with what we did with songs," said Eddy Cue, Apple's vice president of applications. "And that's what we're trying to mirror in the video space."

Analysts consider a video iPod a test of whether consumers would embrace video on such a small screen. Over-the-air TV services are already available for cell phones but the quality remains substandard.

Competing portable video players have been available for several years but very little compelling content has been available, and Apple's move comes amid fledgling initiatives to offer original video programming on the Internet.

"This is the first giant step to making more content available to more people online," said Robert Iger, Disney's chief executive. "It is the future as far as I'm concerned. It's a great marriage between content and technology and I'm thrilled about it."

The new video iPod, available in black or white, will be able to play video and podcasts. Apple said the 30 GB model will have up to 14 hours of battery life while the 60 GB model's battery will last up to 20 hours. Both versions will include a clock, a calendar, a stop watch and a screen lock.

The video iPod will lock TV shows, films and music videos downloaded from the iTunes store with copy-protection software - just as Apple does for music. Users will be able to download purchased video to up to five computers and transfer it to iPods, but unlike songs, users will not be able to burn the videos onto a CD.

The new iPod will also support the MPEG-4 video standard, meaning users could view home movies and other unencrypted videos on it.

On Wednesday, Apple also introduced two newer, thinner models of the all-in-one iMac desktop computer.

Each of the 17-inch and 20-inch iMac G5 models, priced at $1,299 and $1,699 respectively, comes with a built-in webcam and a slim, six-button remote control about the size of thin pack of gum.

It all falls in line with Apple's goal of making the computer a digital multimedia hub and the iPod its portable extension.

Apple shares closed Wednesday down $2.34, or 4.5 percent, at $49.25 on the Nasdaq Stock Market. In after-hours trading Apple lost 5 cents to $49.20. The shares' 52-week low was $18.83 on Dec. 12.

Source: Advocate; Baton Rouge, La.

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