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Apple (Nasdaq: AAPL) on Tuesday began sending out invitations to the press for a mysterious announcement to be made on Sept. 5, and word on the street has it the big news will be a new iPod.
"My feeling is that Apple is going to be releasing a new iPod," Bryan Chaffin, editor in chief of ipodobserver.com and The Mac Observer, told MacNewsWorld. "I also think Apple will use a full screen, with an interface similar to that of the iPhone."
Many others agree. "It's always a losing game to predict what Apple's planning, but the public consensus is clear: Everyone expects Apple to release a new high-end iPod with an interface similar to the iPhone's," Ricky Spero, anchor for The Mac Observer's Apple Weekly Report podcast, told MacNewsWorld.
Taking the speculation even further, it's possible such an announcement could be made hand in hand with the announcement of a deal with The Beatles, Chaffin ventured. "That's beyond speculation -- really just a wild stab in the dark -- but I've been expecting Apple to make an announcement like that for a long time," he said.
Fourth-Quarter Refresh
The new iPod launch, if indeed it happens, will be just in time for the holiday shopping season, lending further credence to speculation. "It's time for the Christmas refresh," Rob Enderle, president and principal analyst with Enderle Group, noted. "Apple needs a set of hot new products to try to drive fourth-quarter sales."
"I think this is going to be a very popular device for the holidays," Chaffin agreed.
There's also the fact that HP (NYSE: HPQ) is reportedly planning a big rollout of consumer products on Sept. 5, Enderle noted. "There are so many ex-Apple people at HP, and HP is the only company still clearly outperforming Apple in the consumer space," Enderle told MacNewsWorld.
There is also bad blood between the two companies because "Apple tricked HP" into abandoning its own MP3 player and selling the iPod under its own brand, Enderle noted. "Apple wouldn't let HP transcode, it only let it sell the device in white, and it lowered prices for retailers but not HP," he added. "Apple pretty much screwed them."
So, while the competitive timing may be coincidence, it also may not be.
Either way, if there is an iPod update, it will also come at a time when the dominance of Apple's iTunes music store is being challenged. Nokia (NYSE: NOK), for example, announced Wednesday the Nokia Music Store for downloadable music along with wireless devices optimized for listening to music.
A Strategic Move
Giving the iPod a full screen like the iPhone's would make sense for many reasons, Spero noted.
"First, they can fold the iPod into the world of devices they make that run OS X," he said, which includes Macintoshes, AppleTV and the iPhone.
"Second, they can introduce a larger audience to MultiTouch," Spero added. "This may pave the way for Apple to start building MultiTouch into Mac interfaces."
Finally, the move would let Apple "wave the 'revolutionary change' banner, saying they're replacing the iPod with a totally new product," he explained. "This helps them get good press and preserve their image as an agent of innovation."
All About the Music
Switching to the full screen will represent a major form-factor change because the iPod has already been so popular, Chaffin added. "It's a gutsy move," he said.
Nevertheless, "Steve Jobs once said that the iPhone is the best iPod Apple had made so far," Chaffin said. "Keeping in mind that everything he says publicly is carefully orchestrated and thought-out, it makes sense he'll want to bring some of those features to the iPod."
That probably won't mean using the entire iPhone interface, however, Chaffin added. "The iPhone is a phone first, an Internet device and iPod second," he said. "I think the new iPod will basically operate like the iPod part of the iPhone."
Indeed, there are many consumers who don't want an iPhone, and are interested solely in the music, Chaffin added. "I don't really think there's a whole lot of cannibalization between the high-end iPod and the iPhone," he explained. "If anything, the iPhone may cannibalize the low-end iPod."
A Fine Line
One of the biggest challenges for Apple moving into the holiday shopping season will be protecting iPod sales, Enderle added.
"People are starting to question whether they want another iPod or if they'd rather get the forthcoming iPhone nano," he explained. "Apple doesn't want people to stop buying the product that's keeping it afloat."
The danger will be "having people look at the iPod and saying, 'I want something more like the iPhone,' then looking at the iPhone and saying 'I can't afford it,'" Enderle explained. "Then they could end up buying something else."
Of course, it's also possible all the rumors are false. In that case, Apple faces a different challenge, Spero pointed out: "If Apple doesn't release iPods based on the iPhone interface, the most interesting question for Apple watchers will be, How do they dance around the expectation that they were going to?"
Apple's stock rose US$7.36, or 5.8 percent, in Wednesday trading.
