Special announcement set for next week

Matthew Yi, Chronicle Staff Writer

Tuesday, August 30, 2005

Speculation on what Apple Computer Inc. will do next with its popular iPod rose to a fevered pitch Monday after the firm sent out invitations to a special event next week at San Francisco`s Moscone West Convention Center.

The Cupertino firm sent e-mails to reporters and analysts on Monday morning. The messages included a photo of a jeans pocket with the message: ``1, 000 songs in your pocket changed everything. Here we go again.``

The event is scheduled for Sept. 7 at 10 a.m.

The ``1,000 songs in your pocket`` slogan harks back to 2001, when Apple announced its first iPod portable music player. Since then, the sleek gadget has been a runaway hit and a financial boon for Apple, generating about a third of its revenue. Any move by Apple in the world of digital music is viewed as a major development for the multimillion-dollar, multi-company industry.

Analysts` speculation on what Apple might unveil next week revolved around two potential products: a long-awaited cell phone from Motorola that plays iTunes music and an iPod that plays video.

The phone was announced earlier, but details have been lacking on what it looks like and how it will work with Apple`s online music store.

The video iPod is an idea that Apple Chief Executive Officer Steve Jobs has disparaged in the past, arguing that there`s a lack of content for a portable video player and that consumers the wouldn`t flock to it as they did with the portable music player.

However, rumors that Apple might be working on an iPod that plays video picked up in recent weeks with reports that the firm has been talking with music labels about licensing their music videos.

Also, the prices of components that are required to build such a player have come down, said Ross Rubin, an analyst at industry research firm NPD Group.

``Right now, a lot of the challenges are around content acquisition,`` he said. ``If Apple does launch a video iPod, it shows that they have been able to move forward with (Hollywood).``

But not everyone thinks next week`s event will be about such a device.

``I don`t think we`re going to see a video iPod from Apple,`` said Michael Gartenberg, an analyst at Jupiter Research. ``They`re still adamant about the notion of portable video: lack of content, poor viewing experience and long download times.``

He thinks Apple and Motorola will finally unveil the promised iTunes- enabled cell phone and perhaps a revamped line of iPods.

Wall Street analyst Gene Munster also thinks next week`s event will be about the Motorola phone. In fact, he believes that after next week`s event, Apple will unveil, at Macworld in Paris on Sept. 20, new versions of the iPod Shuffle and perhaps a new iPod Mini that uses flash memory rather than a hard drive.

The Mini, which comes in five colors, has been the most popular iPod. Apple`s color-screen iPod Photo has been a flop, he said.

``We estimate iPod Photos to be around 7 percent of the total iPods sold,`` Munster said.

The analyst is not sure whether Apple will start selling video iPods, but the notion of selling movies online could make lots of business sense, he said.

``The amount of money they can make on it is potentially high,`` Munster said.

Apple shares rose 10 cents, or 0.22 percent, to close Monday`s regular trading at $45.84.

E-mail Matthew Yi at myi@sfchronicle.com.