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10/12/2005
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Apple Introduces Video IPod

Attempting to dominate a market that doesn't really exist yet, Apple also introduced a new desktop that includes built-in video camera and remote control, as well as a new version of iTunes.

Apple Computer today introduced hardware designed to help the company dominate a market that doesn't really exist yet: online video downloads. The company introduced its long-anticipated video iPod. And it also introduced a new iMac G5 desktop with a built-in video camera and a remote control, to make using the Mac more like watching TV.

The new iPod features a 2.5"-color screen that can play 320-by-240 pixel videos. It's thinner and has more storage than the previous version, but the price is unchanged--$299 for the 30 GB model and $399 for the 60 GB one, which Apple estimates will hold 15,000 songs, 25,000 photos, or over 150 hours of video.

Apple partnered with Disney to offer downloads of ABC TV shows including "Desperate Housewives" and "Lost." In addition to some 2000 music videos, iTunes users will also be able to buy a selection Pixar short films. And though there aren't many video blogs at the moment, expect that to change as video iPods fly off the shelves.

Apple also announced the immediate availability of iTunes 6, only a few weeks after the arrival of iTunes 5. The new version allows users to "gift" iTunes purchases to others, and lets users download music videos from various popular artists for $1.99 each. For record companies that originally wrote these videos off as a marketing expense, Apple's creation of a market for their commercials is sure to be a welcome windfall.

Apple introduced the new technology at a press conference Wednesday in a San Jose, Calif., movie theater. The invitation to the press conference included the prominent image of a movie screen, which should have erased any doubts that Apple CEO Steve Jobs planned introduce the video iPod. And, indeed, analysts and bloggers knew about it in advance, and the Associated Press wrote about it (in an article published by InformationWeek. But at least one Macworld editor said, just prior to the conference, that the video iPod was "coming.... but not today."

But first, Jobs touched on the stellar fourth-quarter financial results Apple turned in Tuesday--revenue of $3.68 billion and a net quarterly profit of $430 million, highest revenue and earnings in the company's history.

The three-act announcement started with details of a new iMac.

In keeping with the mores of weight-conscious Hollywood, the new iMac G5 is now a half-inch slimmer and 15% lighter than its previous iteration. It comes in a 17-inch model with a 1.9GHz PowerPC G5 processor for $1,299 and a 20-inch model that features a slightly faster 2.1 GHz PowerPC G5 processor for $1,699. Both models come with a SuperDrive for DVD burning, 512MB memory expandable to 2.5GB, hard drives that store 160GB or 250GB respectively, and ATI Radeon X600 PCI Express-based graphics with 128MB of dedicated video memory.

The new iMac comes with a built-in iSight video camera for out-of-the-box video conferencing.

It also comes with a new piece of hardware: the Apple Remote. The remote works in conjunction with new Apple software called Front Row that simplifies watching movies, listening to music, or viewing photo slide shows.

With the Apple Remote and Front Row, media consumption on the iMac becomes much more like watching TV--files are playable at the touch of a button. Simplicity is the key selling point here: Jobs took a stab at PCs running the Microsoft Media Center by comparing his company's new six-button remote to PC remotes offers by Gateway and HP with 40-plus buttons.

Jobs began his second act by praising his company's iPod. "It's been a huge success," he said. "And therefore it's time to replace it."

There was one sour note: Jobs said that video downloads are protected by Apple's Fairplay DRM, which does not allow them to be burned to CD or DVD. That no doubt will please Hollywood studios and record companies, but it's sure to prove annoying to honest customers who only want to have some control over content they've paid for.

Regardless, a new era has begun. There's a new market for visual content. Expect to see a lot more of it, from both the usual suspects and emerging talent.

"We think this is a real breakthrough," Jobs said. That's an understatement.

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