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September 12, 2006

Apple announcements: Quick take

Posted by Kim Peterson at 11:32 AM

SAN FRANCISCO -- I'm sitting in the Yerba Buena Center for the Arts, where Apple CEO Steve Jobs has just left the stage after speaking to journalists and analysts for a little more than an hour.

Jobs started off by announcing a new iPod, which will come in a 30 gigabye model for $249 and an 80 gigabyte version for $349. The lower-priced model can hold 7,500 songs or 40 hours of video, and the more expensive model will hold 20,000 songs or 100 hours of video. Both models will have a brighter screen, optimized for video, and a longer battery life.

The iPods will now be able to play games, and the initial game library Jobs introduced included several titles from Seattle-based PopCap Games. There will also be three new iPod Nanos, priced from $149 to $249, which are thinner and have a battery life of up to 24 hours. And the new Shuffle Jobs showed is incredibly small -- a bit bigger than a postage stamp it looked like. Jobs called it "the world's smallest MP3 player," though I think he may be wrong on that point. The new Shuffle will go on sale in October for $79.

Jobs repeatedly emphasized that iTunes started selling television shows last October with only five programs, all from ABC, and has ramped that up to 220 programs today. I think he was implying that the same thing would happen with movies. Apple is going to start selling movies on its iTunes store, with new releases priced at a shockingly low $12.99 in the first week and moving to $14.99 after that. That pricing alone has got to be sending Hollywood execs into a cold sweat, with visions of declining margins in their heads.

Apple's only Hollywood partner is Disney, and as a result it's only selling movies from that company's four studios: Disney Pictures, Pixar, Touchstone and Miramax. (Jobs was CEO of Pixar until Pixar was acquired by Disney, and he's on Disney's board).

ITunes will have about 75 movies available, and future ones will debut on the same day they go on sale as DVDs in stores. Jobs didn't say that you can burn the movies on to a DVD, so I'm assuming those rights aren't there.

Finally, Jobs did something a little unusual and gave reporters an advanced look at an upcoming product. The device, code-named iTV, is expected to go on sale early next year for $299. It is designed to connect directly to your television and receive programs wirelessly from your computer.

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