Apple seen revamping iPod line
NEW YORK (Reuters) - Apple Inc shares rose more than 5 percent on Wednesday on growing expectations that the company will announce a revamped line of iPods next week.
Technology news Web sites have speculated that Apple could launch a new video iPod with a large touch screen similar to the iPhone, and a redesigned iPod nano in time for the end-of-year holiday shopping season.
Others also suggested that Apple may announce a deal for its iTunes online music store to sell albums from the Beatles, the last and biggest digital music hold-out.
Apple has distributed invitations to a September 5 event in San Francisco, but did not say what it would be about.
"The product announcement is likely to include a full line-up of revamped iPods with significantly greater functionality at current price points, including the much-anticipated full-screen video iPod," Goldman Sachs said in a note, urging investors to buy Apple shares.
Goldman said September 5 would bring "the almost certain launch of a new family of iPods" ahead of the holiday season, which accounts for the biggest chunk of sales for that part of Apple's business.
Piper Jaffray analyst Gene Munster Munster said he saw a 70 percent chance that Apple would launch wide screen, multi-touch iPods. His note also speculated on a Beatles deal next week.
"In light of the fact that the tag line of Apple's special event invitation was "The beat goes on," the final words of the Beatles last press release, we expect Apple to announce the availability of the Beatles music library on iTunes," Munster wrote.
In June, the widow of former Beatle George Harrison said fans would probably have to wait until early 2008 before they can buy Beatles music online.
Apple shares are up about 55 percent this year, driven by the steady strength of the iPod, which dominates the portable music player market, and the late June launch of the iPhone.
An overhaul of the iPod line would come as the company faces new efforts by rivals to erode the dominance of its iTunes online music store.
Nokia, The world's largest maker of mobile phones, on Wednesday unveiled in London its own online music store and new top-end handsets.
Earlier in August, Viacom Inc's MTV Networks combined its online music store Urge with a music subscription service from RealNetworks Inc, and Universal, the world's largest music label, said it was testing the sale of songs without copyright protection through Google, Wal-Mart and Amazon.com.
"If anyone wants to take Apple on, they have to simplify the process and streamline, not only purchasing music but moving it over to the devices that consumers really want and that's where Apple kind of stays ahead of everybody," said Tim Bajarin, president of Creative Strategies.
Music sales through iTunes account for about 11 percent of Apple's $5.4 billion in quarterly revenue, but more importantly the service is seen as a key part of the company's strategy to keep people buying its lucrative iPods.
Apple last refreshed the iPod almost a year ago when it boosted the storage of its highest-capacity model to 80 gigabytes, introduced a thinner iPod nano and a smaller Shuffle.
Separately, Apple said on Wednesday it will sell television programs in Britain through its iTunes store.
The stock closed up $7.26 to $134.08 on Nasdaq.
(Additional reporting by Scott Hillis in San Francisco and Yinka Adegoke in New York)
