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Apple Says iPod/Cellphone Combo Will Arrive in June

9 Jan, 2007 By: Jessica Wolf



This week was big for Apple, launching new products and services outside the Consumer Electronics Show at the annual Macworld conclave in San Francisco.

The company has dropped “Computer” from its name to show it has become a full-fledged consumer-electronics company, now known simply as Apple Inc.

In that vein, Apple Inc. chief Steve Jobs pulled the trigger on the company's long-anticipated and much-rumored plans for an iPod/cellphone combo and showed off the new Apple TV system, during his keynote speech at Macworld, which overlapped with the Las Vegas CES Show.

That same day, Paramount Pictures released a slate of recent and classic catalog titles to Apple's iTunes store for $9.99 downloads, including School of Rock, Mean Girls, Save the Last Dance, Breakfast at Tiffany's, Chinatown, Star Trek: The Wrath of Khan, Zoolander, Tomb Raider, The Hunt for Red October and more.

Paramount is the second movie studio to sign up with Apple full-length digital downloads of feature films, joining The Walt Disney Co. Buena and all its movie labels.

Jobs announced that in the first four months of offering Disney movies on the site, iTunes has sold 1.3 million movies, surpassing expectations.

“We hope to be adding even more movies as other studios throw in with us in 2006,” Jobs said.

Apple has sold 50 million downloads of the 350 TV shows available on the site, he said.

Jobs unveiled this week the newest way for iTunes lovers to watch those movie, TV show and video selections with the iPhone, a $499 gadget arriving in June that will have it all — music, phone service and Internet access, and run a Macintosh operating system with a 3.5” widescreen display for optimum video viewing. The phones will be exclusive to AT&T's Cingular Wireless Network.

The phone has touch-screen technology and will synch up with iTunes for managing videos, music and photos, just like the iPod. The storage capacity is much lower for the price, $499 for a 4GB iPhone and $599 for an 8GB version that will arrive later. A like-priced iPod-only device comes with significantly more hard disk space, 60-to-80 GB in the newest generation of models.

The day after Apple unveiled the iPhone, Cisco Systems — which holds the trademark on the name “iPhone” and launched its own iPhone-branded cell product recently from its Linksys division — filed a trademark infringement suit against Apple in Northern California, according to reports. The two companies have reportedly been talking about licensing the name to Apple, but had no formal agreement when Jobs began touting the new product.

Jobs also showed off the company's forecasted set-top box that will wirelessly transfer downloaded music and videos to a consumer's TV set — the Apple TV, which will sell for $299 starting next month and comes with a 40GB hard drive that can hold up to 50 hours of video.

The Apple TV box connects wirelessly to a Mac or PC, synching up to iTunes 7 and a user's personal iTunes library for user-friendly remote access to all the content stored there.

The box connects to the TV via several options including HDMI and component video ports.

“It's really, really easy to use,” Jobs said. The Apple TV box is also capable of 720p high-definition video playback too.

The box was designed for widescreen TVs, Jobs said.

Jobs also announced the iTunes store surpassed 2 billion music downloads, even as the newly unveiled gadgets continue to thrust Apple's iTunes on a trajectory beyond music downloads and mobility to incorporate video and the TV set.

A report from Nielsen SoundScan highlighted in the New York Times recently, intimated that's probably a smart strategy.

According to SoundScan data reported in the LA Times, digital downloads of music in 2006, while still a bright spot, didn't increase at the same rate as previous years mostly because the most voracious of iPod owners and iTunes lovers have already frontloaded their libraries with digital music they want and love.

Sales of digital music tracks increased 65% from 2005 to 2006, according to SoundScan data. But that's far below the previous 150% year-over-year growth of digital music sales.

The same could bode for digital downloads of movies once that market hits penetration. As the DVD market becomes saturated, as consumers' physical libraries fill up, so may their digital movie libraries in the near future.

Jobs actually took umbrage with reports of slowing music downloads in his keynote speech this week.

Jobs said it took three years for iTunes to rack up its first billion digital downloads sold and just ten months in 2006 to get the second billion.

“We couldn't be happier with the growth of iTunes,” he said.

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