Apple may start selling iPod that play digital videos

According to news reports, Apple Computer Inc. may soon start selling an iPod that plays digital videos. There were reports that the firm is negotiating with recording companies to license their music videos.

Apple is now looking for the next big thing to complement its hugely successful online iTunes Music Store and iPod portable music player.
It has been in talks with EMI Recorded Music, Sony BMG Music Entertainment, Universal Music Group and Warner Music Group.

But the Representatives for all five firms refused on Monday, a person familiar with the talks confirmed Apple approached and said no deal has yet been struck on selling music videos on the same service.

By autumn Apple may start selling new iPods that can play video.

Roger Kay, president of industry research firm Endpoint Technologies Associates said “Video iPod, it’s a big hole and an obvious one in Apple’s lineup,”

Kay said speculating that Apple is working on such a product is not new and he said it’s not too far of a reach to think that Apple can deliver such a product later this year. Kay said’ Apple has significant hurdles to clear on hardware and software design as well as striking a deal with music executives.

“Apple is paying royalties for the tunes, but Apple got all of the ownership of the medium. Warner, for example, doesn’t get any visibility on the music store.

The rumor mill picked up steam last autumn with gossip from contract manufacturers in Taiwan that Apple was getting ready to build video iPods and that the new gadget may be ready for sale by May. Even Apple in the past has pooh-pooh the idea that users will watch full-length movies on small handheld screens and still, portable video players have not been a big hit among consumers.

Other analysts speculate that Apple will leave the iPod as-is and create a completely different video player that will capture the up-and-coming downloadable video market much in the same way the iPod captured the downloadable music market.

IDC analyst Josh Martin said according to industry research firm IDC, only 292,500 portable video players were shipped worldwide last year. That figure is expected to jump to about 650,000 this year, although the number could move higher if Apple does indeed
start selling video iPods.

Analysts point out that lack of content has been a big problem for portable video players.
Kay said, unlike music files, which are a few megabytes in size and can be downloaded using broadband Internet in tens of seconds, an hour of uncompressed video could be 13 GB in size and take hours to download.

Analysts said, perhaps that’s why offering music videos that last a few minutes could be a smart idea.