Apple likely to show off new iPods Sept 1

A customer enters the new Apple store, which is the world's largest, on its opening day at Covent Garden in London August 7, 2010.

SEATTLE/LOS ANGELES (Reuters) - Apple Inc is expected to show off a snazzier line of iPods on September 1, as speculation mounts the consumer electronics giant may also unveil plans to reinvigorate its long-neglected TV project.

Analysts expect the makers of the iPhone and the iPad, which has always labeled Apple TV a hobby, to showcase a new iPod Touch with dual cameras in time for the holidays.

Its shares climbed 1.2 percent. The company has in recent years used splashy September events to showcase new iPod models for the year-end spending spree. It typically also describes tweaks and new features for its iTunes online media store.

Last year's event marked the return of Steve Jobs to the public eye after a long hiatus, during which he underwent a liver transplant. This year, blogs are afire with talk about a souped-up Apple TV, though analysts deem unlikely a major announcement on that front next week.

Sources have told Reuters Apple is in the throes of negotiations with the major U.S. TV networks from Walt Disney Co's ABC to General Electric Co's NBC, hoping to offer TV shows for rent via iTunes for 99 cents per episode.

But those sources also said it was not a done deal. Apple and the media companies have declined to comment.

"From our checks with supply chain and industry sources, we believe potential changes could turn Apple TV into a bigger hobby and a multimillion unit seller," Shaw Wu of Kaufman Bros wrote.

Apple will hold the event at the Yerba Buena Center for the Arts, where it introduced the iPad in April. This year's invitation carried a prominent picture of a guitar's front, with an Apple logo standing in for the sound hole.

The company's iPods dominate the music- and media-player market, but growth there has moderated in past years and it has turned its attention toward the iPhone and iPad. In the June quarter, Apple said it sold 9.41 million iPods in the June quarter, down from 10.2 million a year earlier.

In contrast, analysts estimate the company sells about 1 million Apple TV units annually.

Still, some analysts expect Apple to eventually revamp -- and enhance -- its long-neglected TV device as the electronics maker continues to merge content with gadgets and ensconce itself in the home.

Wu expects to revamped Apple TVs in stores as early as this holiday, or the first half of 2011.

"In the grander scheme of things, it takes them a step closer" in that effort," Wu said. The device is "perhaps a precursor into a bigger effort to address the home entertainment space down the road."

(Reporting by Bill Rigby and Edwin Chan; Editing by Richard Chang)