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Fan sites buzz with talk of photo-ready iPod

Is Apple Computer Inc. fine-tuning an enhanced iPod with roughly 50 percent more storage and a color screen to display photos?
/ Source: Reuters

Is Apple Computer Inc. fine-tuning an enhanced iPod with roughly 50 percent more storage and a color screen to display photos?

The Internet sites that follow Apple's coming product releases are buzzing with speculation that the iconic computer maker is preparing to unveil a 60-gigabyte iPod that would become its top-of-the-line offering.

Apple, of Cupertino, California, declined to comment on the reports, which gained momentum in recent weeks after a key supplier announced plans to produce a larger portable hard drive.  In the past, Apple watchers used Hitachi's announcement of its 1-inch hard drive to accurately predict the arrival of the popular iPod mini.

But if true, analysts said the move by Apple would be among the most significant yet to transform the popular iPod music player into a broader entertainment platform that would raise the stakes in Apple's competition with Microsoft Corp.

Among the Apple rumor sites, ThinkSecret cited "highly reliable sources" in reporting that Apple would announce a 60-gigabyte iPod within the next 60 days, in time for the holidays.

Many financial analysts who follow Apple also closely track the rumor sites, which have at times in the past accurately predicted new versions of the iPod, for example, and other products by the famously tight-lipped company.

"The iPod has the potential of evolving into an ever more powerful entertainment platform," said Tim Bajarin, an analyst at research firm Creative Strategies, adding that he had no specific knowledge that Apple was readying a bigger iPod, which some industry watchers believe would cost about $500.

More power in the 'Pod?
ThinkSecret reported that Apple plans to incorporate a 2-inch color display, the same dimension as on current iPods, and synchronization with its iPhoto software.

Backing the speculation is Toshiba's August launch of a 1.8-inch, 60-gigabyte hard disk drive.  It's widely known that Toshiba Corp. makes the drives for the iPod and Hitachi Ltd. supplies the 1-inch drive used in the iPod mini.

On Tuesday, Microsoft is launching the latest version of its Media Center software in partnership with a broad array of computer companies and others.

While Apple has suggested that users can store audio books and data other than songs on the iPod -- using a microphone, for instance, to record lectures -- Chief Executive Steve Jobs has largely kept the focus on music.

Indeed, Jobs has publicly all but ruled out a video iPod, because there are already any number of portable DVD players on the market and many consumers use their notebook PCs to watch movies while on the road.  Plus, the screen on the current iPod is too small to make watching movies practical.

But if Apple makes the iPod work with its iPhoto software to manage photos on the iPod, it is likely that the company will make it available on PCs running Microsoft Windows, the dominant operating system software, analysts said.  Apple's iTunes software already works with Windows, and analysts have credited that availability as helping boost iPod sales.

(MSNBC is a Microsoft - NBC joint venture.)

Since iPod's introduction in October 2001, Apple has sold more than 4 million of the sleek devices, which store anywhere from about 1,000 songs to 10,000 songs. In its most recent quarter, iPod sales accounted for 12.4 percent of Apple's overall revenue.

"If I want to expand the iPod's ability to be a digital media platform, you would want to cross platforms," said Mike McGuire, an analyst at market research firm GartnerG2, referring to iPhoto working on both Windows and the Mac operating system.

But McGuire also cautioned that Apple needs to be prudent about how it expands the iPod so that it protects the valuable association it has built up with digital music.

"You have to be careful you don't turn it into a digital Swiss army knife where you have a lot of functions, but none of them has a lot of strengths," McGuire said.  "You have to be careful about diluting the brand."