Next, Apple has its "i" on TV
Seattle Times technology reporter
SAN FRANCISCO — Apple Computer, Amazon.com and Microsoft are preparing for a significant retail battle this holiday season, offering digital music and video for three different systems engaged in unprecedented competition.
But the result, some analysts say, is that people will end up being confused about which formats to buy and which devices are compatible.
That could give the advantage to Apple, the analysts say, which has built its iPod platform on the idea of simplicity and is preparing to launch a major marketing campaign around new music and video products.
Chief Executive Steve Jobs unveiled some of Apple's holiday lineup Tuesday at a presentation to journalists. In addition to showing several upgraded iPod players, Jobs said Apple has started selling digital movie downloads in its iTunes online music store.
Apple also previewed a device it plans to sell next year that connects to a television and receives music and video wirelessly from a home computer.
The announcement follows a movie download and rental service called Unbox that Amazon debuted last week.
Microsoft is planning a launch later this year of its own handheld music and video player, Zune, along with an online content store.
So far, Apple has only one content partner — the Walt Disney Co. — for movies, and is selling 75 titles from Disney's four movie studios: Disney Pictures, Pixar, Touchstone Pictures and Miramax Films. Jobs sits on Disney's board and previously was chief executive of Pixar.
Amazon is offering movies from seven major companies.
Jobs compared the dearth of partnerships to when Apple began selling TV programs last year with only five shows. Now, he said, there are 220 shows from 40 networks for sale on iTunes. People have downloaded 45 million shows from the service in the past year, he said.
The store will sell movies at the same time they become available on DVD, and has priced new releases at $12.99 for the first week and $14.99 after that. Older titles will generally sell for $9.99.
Apple was selling 75 movies on iTunes yesterday and intends to include the two highest-grossing movies of the year, "Cars" and "Pirates of the Caribbean: Dead Man's Chest," when they are released this fall.
A user can begin watching a movie one minute after downloading starts, Jobs said. New, superfast broadband connections will enable a download to complete in about 30 minutes.
Still, there are restrictions even Jobs could not get Disney to lift, the most significant being that you can't burn a movie to a DVD for playback on a DVD player.
Unlike Amazon, which announced a movie-download service last week, Apple will only sell films, not make any available for rent.
Microsoft's plans related to video are unclear, though more details may be available next month as the company ramps up hype for its Zune product line and services.
The three companies are moving quickly to legitimize movies on handheld devices and PCs.
The upcoming holiday season will be one of the most exciting in years for new technology, said Richard Doherty, a technology pundit with The Envisioneering Group research and consulting firm.
The only reason any of this is happening is because of Apple's success with sales of TV videos at iTunes, Doherty said.
"While there will be a lot of consumer choice this season, there will be a lot of confusion," he said.
Apple and Amazon have already shown themselves to be consumer-friendly companies with good customer service, he said, but Microsoft must still prove itself.
"Microsoft doesn't have tremendous customer loyalty in this area," he said. "Amazon and Apple may pull ahead. But there's tremendous opportunity for Microsoft and also tremendous challenges in the coming weeks to make this work."
Apple also showed off a post-holiday challenge to Microsoft Tuesday: a book-sized device that connects to a TV and displays movies, music and digital photos.
The $299 device, internally code-named iTV, will receive programs wirelessly from a home computer to play on television screens. The device puts Apple even more squarely in competition with Microsoft and its Windows Media Center products, which are designed to make inroads into the living room.
The iTV device will go on sale in the first part of next year, Jobs said. He did not explain why it wasn't ready for the holidays.
When it comes to video, particularly movie-length videos, people want a solution that works with the TV set and iPod, said Michael Gartenberg, an analyst with Jupiter Research who attended the Apple event.
"Those two components are one of the things that [would separate] Apple out from the competition," he said.
The iPod has a 75.6 percent market share for media players in the U.S.
Jobs also debuted a new iPod that he said would have a 60 percent brighter screen and come in two models, with 30 gigabytes and 80 gigabyes of storage.
The first can hold up to 40 hours of video, has a three-and-a-half-hour battery life for video and costs $249. The larger-capacity model can hold up to 100 hours of video or 20,000 songs. It will have a six-and-a-half-hour battery life for video and cost $349.
Apple will also begin selling casual video games for the iPod, which use the scroll wheel as a controller. They include "Bejeweled" and "Zuma" from Seattle-based PopCap Games. The games will sell for $5 at iTunes.
Jobs also unveiled a second-generation iPod nano with a 24-hour battery life and a new iPod Shuffle barely bigger than a postage stamp.
The new Shuffle, priced at $79, will go on sale in October and will likely be a strong holiday seller for the company.
Kim Peterson: 206-464-2360 or email@example.com
Copyright © 2006 The Seattle Times Company