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Apple forges path to digital living room

At event in S.F., company unveils new iPods, movies on iTunes, and device that links PCs to TVs. Photos: Showtime for Apple Video: New colors, designs for little iPod

SAN FRANCISCO--Apple Computer overhauled its digital music and video offerings on Tuesday, introducing new iPods in three categories and announcing plans to make movies available for purchase through the iTunes store.

Movies from four studios owned by The Walt Disney Company will be available on iTunes 7, the new version of the download software, the same day they are released to DVD, at a product showcase here. Preorders and movies purchased in the first week will cost $12.99; the price then bumps up to $14.99 for new releases.

Apple Showtime

The studios are Walt Disney Pictures, Pixar Animation Studios, Touchstone Pictures and Miramax. Older titles will also be available for $9.99.

Movies can be downloaded in near-DVD quality, Jobs said during his presentation at the Yerba Buena Center for the Arts. Consumers with broadband speeds of 5 megabits per second will be able to download movies from iTunes in 30 minutes, he added.

Apple also plans to introduce a product in the first quarter of 2007 that lets consumers stream their movies or music to televisions, Jobs said. The new device, code-named iTV, has 802.11 wireless built in. It will sell for $299 and works with PCs and Macs. "We think it completes the picture here," Jobs said.

Tuesday's announcements marked more than just a tweak to existing products and services, one analyst said.

"The big theme today was, Apple announced its intentions to take over your living room," said Gene Munster, an analyst with Piper Jaffray.

Apple would not say which flavor of 802.11 wireless networking the iTV would use. "We're not talking about the technology inside iTV," Apple Senior Vice President Phil Schiller said in an interview. "That's next year's discussion."

But Apple has made its mark in digital entertainment with music, and for those who just want a music player, it is offering new iPod Nano and iPod Shuffle models, along with a new video iPod. The new Nanos feature twice as much capacity as the original generation of Nanos introduced last year, and are available in a variety of colors like the iPod Mini they replaced.

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Video: Apple Nano gets styled
Apple Computer CEO Steve Jobs presents new Nanos to the crowd at Apple's showcase in San Francisco on Sept. 12, 2006.

The new Nano will come in three models--a 2GB in silver only; a 4GB in silver, blue, pink and green; and a 8GB in black only. Apple also will use an aluminum casing on the new generation of Nanos, perhaps to counter complaints that the Nanos were easily scratched. The 2GB version costs $149, the 4GB models cost $199, and the 8GB Nano costs $249.

The new video iPods have a 60 percent brighter screen for watching movies and television shows and a higher-capacity battery, delivering up to six hours of video playback on the 80GB model. The 80GB version costs $349, and a 30GB version costs $249. Consumers will be able to play games on the devices, including "Bejeweled," "Tetris," "Texas Hold 'em," "Zuma," "Pac-Man" and "Cubis."

Although the new video iPods have a brighter screen, better battery life and the ability to play games, Apple did not add wireless abilities or a larger screen, as some Apple watchers had predicted. Microsoft's forthcoming Zune player will include built-in Wi-Fi as well as a larger screen. However, it's unclear how bulky that player will be or what battery life it will offer.

Others to follow Disney?
As for the movies, notably, Apple launched with just Disney's studios, while rival Amazon.com announced last week that from 20th Century Fox, Paramount Pictures, Sony Pictures, Universal Pictures, Warner Bros. Entertainment and Metro-Goldwyn-Mayer Studios. Apple's desire to have new releases available the same day as the DVD may have been among the sticking points.

In addition, Apple now has a family connection with Disney. Jobs earlier this year became a member of the board at the venerable entertainment company, which acquired Pixar, where Jobs is CEO.

But Disney CEO Bob Iger said he doesn't expect Disney to be alone on iTunes for long.

"I'm confident there will be many more after us," Iger told CNET News.com in a brief interview after the Apple event. "We're the first but we will be one of many fairly soon."

Apple is also offering relatively fixed pricing, though new releases sell for more than older titles. Iger said he is perfectly comfortable with that notion and doesn't think that will prove to be an insurmountable hurdle for the rest of the industry. However, Disney is likely to team up with others. "It's nonexclusive," he said of the Apple deal. "We're platform-agnostic."

Jobs said that although the movies are a U.S. feature, the company hopes to offer films internationally next year. Iger said that Disney is already in talks with Apple on overseas distribution.

Both the video iPod and iPod Nano come with a search feature that lets users find songs, artists or television shows by entering letters into a search bar rather than scrolling through the familiar menus. They will also allow users to sync their music collections on home and work PCs through the iPod, so songs added at home and synced to the iPod will transfer to a work PC when that iPod is plugged into a USB port.

Jobs called the new 1GB iPod Shuffle "the world's smallest digital music player." It's about half the size of the original iPod Shuffle, uses the same aluminum casing as the new Nanos, and has a clip built onto the back. It costs $79.

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The new iPod and the iPod Nanos are available immediately, and the iPod Shuffle will be available in October.

Version 7 of iTunes is also available for download immediately. The addition of movies to the content available for purchase was the most significant new feature, but the new version provides music videos at a higher resolution than before, now up to 640-by-480-pixel resolution. The screens on the new iPods and iPod Nanos support this resolution, which will also improve the quality of movies played on a Mac, PC or television.

The lineup of television shows available on the iTunes 7 store will also now include highlights of football games through a deal with the National Football League's NFL Network, Jobs said.

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