Apple unveils video iPod

SAN JOSE - Apple Computer today introduced a version of its market-leading iPod that also plays videos and unveiled a deal with Walt Disney Co to offer television shows like "Desperate Housewives" on the device.

The video iPod -- a long-rumoured product that could further spark sales of the popular brand -- has a 2.5-inch screen and comes with 30 or 60 gigabytes of memory. It will sell for US$299 ($440) and US$399, respectively, and holds up to 150 hours of video.

As part of its deal with Disney's ABC network, iPod users will be able to download five shows including ABC's "Desperate Housewives" and "Lost." Current-season episodes of the series will be made available at the iTunes music store the day after broadcast.

The entire first season of "Desperate Housewives" and "Lost" will be available immediately. The television shows are only available in the United States and cost US$1.99 per episode, without commercials.

"Disney and Apple are offering customers a new and exciting way to experience television," Apple chief executive officer Steve Jobs said.

Both the deal with Disney and the new products -- which also include an iMac with a remote control that acts as a home entertainment hub -- give Apple a chance to forge a leading position in online media, said Cross Research technology analyst Shannon Cross.

"They are positioning themselves as the company that will connect video content to the end users and control your living room," Cross said.

The company also plans to offer music videos for US$1.99 each at its iTunes online music store. It will also offer short films from Pixar Animation Studios, which is also led by Jobs.

Apple has already sold more than 28 million iPods since their introduction in October 2001 and now has about 75 per cent of the market for digital music players.

The company has also refreshed the iPod line-up many times since its introduction. Apple on September 7 unveiled the iPod nano, a pencil-thin device that uses memory chips instead of hard disk drives to store songs.

The new iMac computer, which the company said would stand as an entertainment hub for DVDs, music and photos, will also compete directly with Microsoft Corp's Media Centre.

The new products come after Apple on Tuesday reported a fiscal fourth-quarter profit that quadrupled from a year ago as revenue rose 56 per cent and unit sales of iPods more than tripled.

But the company's stock fell as sales of the iPod -- 6.5 million in the quarter -- were less than some analysts' estimates, which were as high as 8 million.

Apple shares fell US$2.73, or 5.3 per cent, to US$48.86 in late afternoon on Wednesday on Nasdaq.

- REUTERS