Amid self-propelled rumors of a video iPod, a beefed-up iPod, or a flying iPod, Apple (Nasdaq: AAPL) 
announced its "one more thing," today, which turned out to be a two or three more things.
Apple, which also reiterated its roots as a personal computer maker by introducing the iMac G5, made a lot of noise leading up to the new product release, which has been rumored about for nearly a month. Apple said the new video iPod player and iTunes 6 service would indeed include music videos and television programs, with iPods now capable of storing more than 150 hours of video in a 60 GB, US$399 iPod, also available in 30 GB at $299.
With sleeker form factor, five hours of additional battery life and a 2.5-inch display for 2,000 music videos, podcasts and other video, the much-anticipated handheld was almost as big as the hype, but industry observers still called it a roll of the dice.
"The video iPod is interesting," Gartner (NYSE: IT) research Vice President Martin Reynolds told MacNewsWorld. "It's still a bit of an unproven market, so it's a bit of a gamble for them."
Video and Entertainment
Apple touted its new iTunes service -- with music videos and new television episodes including "Lost," "Desparate Housewives" and other popular series -- as "your 24-7 video store."
The company further committed to the home media and entertainment market with its latest iMac G5, which answered rumors of a television connection with a remote control for the computer. The machine also features enhanced wireless, photo and other multimedia capabilities.
"They've clearly hitched their bet on entertainment," Yankee Group senior analyst Mike Goodman told MacNewsWorld.
Inside Users' Minds
Reynolds, who remarked on the "fabulous" financials for both Apple's computer and iPod business, said that, while the market may be more interested in gaming with handheld devices, Apple had succeeded in providing something its competitors do not have in the video iPod.
"If anyone can, Apple can," he said. "The company has been able to do what no competitor has, and that is get into the minds of the users and build something they really want."
Noting the increasing traction for Apple's computer business thanks largely to the Mac mini and iBook notebooks, Reynolds said Apple may find great success with the new video device, even though the same content and copyright issues of the music world will likely carry over to video.
"We'll see what they do with it," Reynolds added. "I'm more confident in them than in anyone."
Content Is Key
Yankee Group's Goodman said the new iTunes and iPod offering would allow content holders -- in this case television programmers -- to test safely the waters of video-on-demand.
"Programmers are taking this as an experiment with video-on-demand without risking the loss of a revenue stream," he said.
The analyst added that Apple's new offering was an important first step in video-on-demand, given the high-profile, high-demand programs, such as "Lost," that will be initially offered. Beyond the technology used, however, Goodman emphasized that it is the content that will ultimately determine the success of the video iPod and its ilk.
"The video iPod is interesting," he said. "What's more interesting is the content side, rather than the Apple side."
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