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Can Apple maintain iPod's relevance?

It's one of the many questions we have leading up to Wednesday's Apple music event. We look at what will happen to the iPod lineup, what's next for iTunes on the Web, and the chances of seeing an improved Apple TV.

What does an acoustic guitar have to do with digital-music players? We'll find out Wednesday at 10 a.m. PDT.
What does an acoustic guitar have to do with digital-music players? We'll find out Wednesday at 10 a.m. PDT. Apple

Long before the iPhone, the iPod was the device that helped transform Apple from computer company into a consumer electronics company.

But today, the ubiquitous music player has become less relevant to the company that essentially owns that product category. Apple still sells three-fourths of all MP3 players sold, but multifunction gadgets like the iPhone and iPad are getting the most attention from Apple customers, not to mention the rest of the electronics industry, and bringing in more revenue than iPods these days.

So when Apple convenes a special event in San Francisco to discuss music this Wednesday--as it has every September for the last five years--we think that Steve Jobs and Co. will touch on the iPod but also talk more broadly about media, including a more evolved iTunes and new ways to watch content in the living room.

Apple's invitation to the event this year featured a picture of an acoustic guitar, complete with an Apple logo, naturally, and, as usual, it has prompted a guessing game.

New iPods? New Apple TV? New streaming-video service? Perhaps all of the above. Here are some of our thoughts on what we think we might see and what we hope Apple will reveal on Wednesday morning.

iTunes online
We've long imagined a Web-based version of iTunes that could store and organize all our music and media in the cloud without bogging down our computers. The full realization of this dream is probably still a ways off, but we think that Apple may take a big step in the right direction by opening a Web-based music store.

Purchasing media through iTunes is a relatively archaic process that works in spite of the Web, not because of it. Currently, downloading music and media from the iTunes Store to your computer requires a sizable software download (with frequent updates) and a brain-numbing installation process.

Competitors such as, Rhapsody, and eMusic all host their storefronts online, giving them several competitive advantages over iTunes. For example, online music content is more easily embeddable on artist pages, and links to purchase songs don't bounce users out of the browser. Currently, Apple includes listings for much of its media and app content online, however, these pages include scripts that automatically direct users to the iTunes desktop software or prompt users to download the software, if it isn't already installed. Even under the best circumstances, it's a bumpy ride.

Steve Jobs introduces the updated iPod Touch at the 2009 event.
Steve Jobs introduces the updated iPod Touch at the 2009 event. Stephen Shankland/CNET

Hosting and indexing iTunes Store content online may give Apple an advantage in search, as well. Google's tendency to serve preferential music search results from online services such as Pandora, iLike, and Rhapsody may have little to do with corporate rivalry with Apple, and more to do with the fact that Apple's iTunes content simply does not live on the Web in any meaningful way.

With Apple's acquisition of online-music retailer Lala in 2009, it would seem taht Apple has everything it needs to bring iTunes to the Web (at least for music downloads). For anyone who's breathed a heavy sigh every time they launch iTunes on a sluggish computer just to buy a 99-cent song, let's hope the time has come for iTunes to finally pull itself into the Web era.

MobileMe for music
When Apple launched its online service MobileMe in 2008, it gave users a way to back up their photos, calendar, address book, e-mail, and other files online, for a $99 annual fee. Curiously, one type of media not covered by MobileMe is music.

With Apple already in charge of the most popular way to purchase and organize digital-music collections (iTunes), it seems like a no-brainer to offer users a means to back up their iTunes libraries to the cloud. An online music locker would also potentially offer consumers a means to truly sync their music libraries across the multiple computers in their lives, regardless of location.

Of course, music labels may have a thing or two to say about users making digital backups of their music collections online, but several online services, such as MP3tunes, Mspot, and Lala, have already broken ground with similar solutions.

iPod Touch
Like clockwork since introducing the iPod Touch in 2007, Apple has upgraded the device every year to almost match the most recent features of the iPhone. Nothing less is expected this year.

Now playing: Watch this: CNET's Apple event predictions

The new iPod Touch is widely expected to be fitted with the same bright "retina" display sported by the iPhone 4, introduced in June. Apple's special display technology has a native resolution of 960 by 640. That's 614,400 pixels on a 3.5-inch diagonal screen (326 pixels per inch), or four times as many pixels as contained in the 320x480 screen on the current-generation iPod Touch.

There's also speculation, based in part on some wayward photos of iPod parts that wound up on the Internet, that the new iPod Touch will get a camera to enable video calling using the FaceTime software developed for the new iPhone 4.

Steve Jobs also may have hinted that this was coming. At WWDC in June, while introducing FaceTime for iPhone, he later added, "Apple will ship tens of millions of FaceTime devices this year." If he were only speaking of iPhones, "tens of millions" would be an exaggeration--Apple has sold more than 3 million iPhone 4s with FaceTime installed (through early July), but to get to "tens" of millions by the end of December would be tough. By saying "devices" rather than phones, it makes sense that iPod Touches with FaceTime--which could sell in the millions, once released--might help boost those numbers.

The major difference between an iPod Touch and an iPhone, however: you don't get a phone number. But, the rumor is that Apple will connect FaceTime calls, which are Wi-Fi-only now, anyway, via e-mail addresses.

Nanos, Classics, and Shuffles
Apple's iOS devices (iPad, iPhone, iPod Touch) may be getting all the attention, but their tried-and-true iPods still make up a healthy slice of Apple's business. Last year, Apple all but froze its designs for the iPod Classic, iPod Nano, and iPod Shuffle, making only slight changes to capacity, colors, and specs, as well as adding video camera capabilities to the iPod Nano.

This year, we're hoping to see something a little more daring for Apple's sidelined iPods. It could be a touch-screen iPod Nano, or the inevitable iPod Shuffle that's too small for the human eye to see. Who knows? That said, the iPod Classic has probably hit its apex of design and capacity, and will likely stay unchanged or possibly disappear. Once you've named something "Classic," you don't change it much.

iPad updates
Apple promised that iPad users would receive an iOS 4 update in the fall, and now may be the perfect time to roll the update out. It seems unlikely, though, since Apple has yet to release a beta of iOS 4 for iPad to developers, which usually comes first. Still, next week's event could show us what's in store for the iPad, when the iOS 4 update does eventually hit later in the year.

The checklist of things we'd like to see announced for iPad include: iTunes LP compatibility, iLife apps such as iMovie, iWeb, and GarageBand, and support for Apple's FaceTime video calls (at least as a receiver).

Apple TV
Long considered a "hobby" for Apple, Apple TV might get a snappy new look and price this week. There have been few changes to the streaming set-top box since its introduction in 2008, but a persistent rumor has been that it will get shrunk to the size of an iPod Touch/iPhone, be priced at $99, get outfitted with the homegrown A4 chip and iOS 4, do away with the 160GB mechanical hard drive, and scale down to 16GB of flash storage. There's also word that Apple could revert back to the original name for Apple TV, iTV, to bring it in line with the rest of the company's iDevices.

Apple TV as it looks today. CNET

The current incarnation of Apple TV costs $229 and runs a stripped-down version of the company's desktop operating system, Mac OS X. Swapping out a touch-screen OS for the desktop OS would present a simpler way of running similar apps across all mobile devices, but the idea of doing away with a hard drive--which enables people to download and own lots of content--suggests more streaming of content to a new Apple TV. That could be done using app versions of Netflix, Amazon, Hulu Plus, and most likely iTunes itself. But whether Apple has the necessary deals in place to enable streaming of video content has been unclear.

TV rentals
Part of the update for iTunes--something possibly pegged to a revamped Apple TV--may be the ability to rent TV show episodes for 99 cents. It would be similar to the way you can already rent movies from iTunes--once rented, you have a specified amount of time to watch the content before it expires. Currently, you can only buy TV episodes for $1.99 for standard definition and $2.99 for HD.

Several reports noted that Apple is working with CBS, NBC, Walt Disney, and News Corp. on instituting 99-cent rentals, though the deal did not appear to be sealed late last week. The TV show rental concept could be meant to replace the long-rumored iTunes subscription service, which Apple has been working on for at least five years.

Apple's event starts Wednesday at 10 a.m. PDT, and we'll be live-blogging from the Yerba Buena Theater in San Francisco. Be sure to come back then for up-to-the-moment coverage.