iPod expected to get upgrade at Apple event

Apple's iPod may live in the shadow of its splashier sibling devices - the iPhone and iPad - but the digital music player, expected to get upgrades this week, is a key reason the company got its chic aura back.

Steve Jobs, expected to be on stage for the event at the Yerba Buena Centre for the Arts in San Francisco, may announce a front-facing camera on the iPod Touch, some analysts say, allowing use of Apple's new FaceTime video chat technology that comes with the iPhone 4.

Jobs also may unveil a Wi-Fi-equipped iPod Nano, which would enable users to stream music.

Apple is completing a $US1 billion data centre in North Carolina, and last year acquired streaming music site Lala.com, fueling speculation that it is preparing to launch a cloud-based service.

While many observers say Apple is likely to focus just on its iPod line, some speculate it will reveal new features for Apple TV, the company's contribution to the revolution in living-room entertainment.

Bloomberg reported that Apple will announce a new $US99 set-top box that includes a Netflix subscription movie service.

There also are rumors Jobs will announce a 7-inch iPad tablet, though many analysts say any additions to the iPad line, which was introduced earlier this year, will probably come in the northern spring, following the company's recent pattern of refreshing products annually.

Upgrades for the iPod usually come in September, so it would be fitting for Apple to give the iPod the entire spotlight.

The iPod, and the iconic TV ads of silhouettes of dancers that came with it, rebranded Apple as the king of tech cool a few years after Jobs returned to the company to help it recapture its role as a leading innovator, long after it helped launch the personal computer industry.

The pocket music players drew crowds of shoppers into Apple retail stores, where many consumers were re-introduced to the company's sleek and easy-to-use Macintosh computers, triggering a surge of new sales.

"It's very hard to overplay the iPod in the resurgence of Apple," said Gartner analyst Mike McGuire.

The iPod, launched nearly nine years ago, is no longer the poster device for Apple, whose iPhone 4 and new iPad tablet have triggered demand that has outpaced supply, forcing consumers to wait days or weeks to get the gadgets.

Apple sold 9.41 million iPods during the third quarter ended June 26, an 8 percent drop from the corresponding period last year.

But many analysts attribute the drop in popularity of the iPod to the extraordinary sales of the iPhone; Apple has long said it expected the iPhone to cut into iPod sales.

"They are following the old rule of cannibalising your own product before someone else does," said Ross Rubin, director of industry analysis for the NPD Group.

Analysts, though, say the iPod remains more than an after-thought for Apple, which for years has devoted a special event to reveal new versions of the device, which includes the hard-drive based iPod Classic, the iPhone-like iPod Touch, the thumb-sized Shuffle and the Nano, which has a video camera.

Apple's online iTunes store, which sells digital music and videos, pulled in more than $US1 billion during the third quarter.

For the first seven months of 2010, Apple's iPod claimed 77 percent of the MP3 player market in the United States, according to the research company NPD.

ITunes now controls 70 percent of the legal digital download market and 28 percent of the total music market in the United States.

Creative Strategies President Tim Bajarin said any talk of the iPod's demise is premature. In fact, many consumers still buy and use the music players even if they own iPhones because playing music and video can drain the iPhone's battery, potentially leaving them without a mobile phone.

"You'll see more people buy a dedicated device for their entertainment," Bajarin said. "I don't believe the iPod is anywhere near the end of its life and Apple will emphasise it again, especially when they start rolling out their cloud-based services."

While sales of iPods are sure to gradually decline, they still represent a good chunk of Apple's business. During the third quarter, iPod sales pulled in $US1.5 billion.

"It was the success of this device that caused Apple to change its name," Bajarin said. "Until the second year of the iPod, they were still known as Apple Computer Inc. Once the iPod took off, Apple bridged the gap of being a computer company and being a consumer electronics company. They changed the name to Apple Inc. It gave them the freedom to create anything they wanted to."