Tue Sep 6,10:59 PM ET

SAN FRANCISCO - Speculation continued to flitter around Silicon Valley about what new device or technology Apple Computer Inc. would spring on the public at an eagerly awaited news conference Wednesday.

Few companies know how to ratchet up anticipation like Apple. Last week, the company issued a terse and cryptic e-mail to journalists notifying them that it would make an announcement but then refused to tell them anything more.

That was enough to draw lots of fanfare. Some analysts and industry insiders are sure that Apple and Motorola Inc. will debut a cell phone that will play music downloaded from Apple`s digital music site, iTunes. Others are expecting Apple CEO Steve Jobs to show off a new iPod, the company`s ubiquitous digital music device, that can play video.

Analysts from financial services firm Piper Jaffray said in a report released Tuesday that while they aren`t sure what Apple will say Wednesday, they expect in the near future the company will release a music-playing phone that the company would develop on its own.

``We believe there is a greater than 50 percent chance in the next 18 months that Apple comes out with their own Apple phone,`` Piper Jaffray said in a statement.

Even his archrivals would concede that Jobs is a savvy showman who knows how to build suspense. Already, the hoopla over the news conference is paying off, as Apple shares climbed 5 percent, or $2.47 cents, in afternoon trading Tuesday to reach a 52-week high of $48.81.

But is this a case of Apple manipulating the public or does the company`s stranglehold on the digital-music industry demand that attention be paid to Apple no matter what?

Nobody would care about such publicity stunts if the company didn`t back them up with strong products, said Susan Kevorkian an analyst with research firm IDC.

``There is always uncertainty around Apple`s announcements,`` Kevorkian said. ``If it is big news we want to be prepared. And if it`s not we still want to be there because they are such a major player in the MP3 and music-playing markets.``

IDC isn`t without its own theories on what Apple is doing. Kevorkian said that besides co-branded phone and a video-playing iPod, Apple could throw the curtain up on a 4-gigabyte, flash-based iPod.

Flash would make the new iPod more energy efficient than hard-drive iPods. Apple lost a class-action lawsuit this year after iPod batteries were found to die prematurely.

Music-playing cell phones could emerge as a competitor to the iPod, some analysts predict. By branching into phones, Apple is hoping to secure its place as the kingpin of digital music regardless of what device is used to listen. High-speed wireless networks are expected to become widely available sometime next year and Apple is positioned to offer song downloads to mobile phones.

Jupiter Research estimates that the number of digital music players will grow from 3 million to 77 million by the end of the decade.