Apple to refresh iPod line, say analysts

Revamp of iPod line expected as analysts speculate what else Apple will unveil at a music themed event in San Francisco.

Apple will refresh its iPod line this week at an event in San Francisco, but it's uncertain what, if anything else, it will spring on customers, analysts said Monday.

The event, which Apple has touted with the tag line "Let's Rock" in invitations to journalists and bloggers, will kick off at 1 p.m. Tuesday, EDT.

"We certainly have a good sense that it's a music event," said Michael Gartenberg, formerly an analyst with JupiterResearch, now a vice president of mobile strategy with JupiterMedia. "And the fall is traditionally when Apple has done a refresh of its iPod line."

Ezra Gottheil, an analyst at Technology Business Research, seconded the music angle, but was more specific. "They'll probably bring down the price of the iPod touch to make it more appropriately priced in comparison with the iPhone," said Gottheil.

The iPod touch is currently priced at US$299 for the 8GB model, $399 for the 16GB and $499 for the 32GB device, (click here for iPhone 3G pricing).

Other than revamping the iPod line -- most speculation has centered on a redesign of the iPod nano -- Gartenberg and Gottheil were hesitant to predict what Apple will unveil.

"They may be able to talk about a subscription service for the iPod at this point," said Gottheil. "That would depend on whether they have been able to make deals with the labels."

Talk of a flat-fee, iTunes unlimited-access plan has surfaced before, most recently last May when the UK-based Financial Times reported that Apple had been in discussions with major music labels about the idea, which would be tied to purchases of new iPods.

Both analysts acknowledged that if Apple limits Tuesday's announcements to the iPod, it risks underwhelming users, who have come to expect more than the usual from the company's launch events. "New iPods won't necessarily shake up the market in terms of expectations," said Gartenberg.

"They're basically working with a saturated market," added Gottheil. "There's really no trick that they can pull to change that."

Still, both gave Apple the benefit of the doubt, noting that the Cupertino, Calif.-based computer and consumer electronics maker has a history of dropping bombshells. "They could announce something in the notebook field," said Gottheil, talking about Apple's MacBook and MacBook Pro lines, "though they have their back-to-school promotion running through next week." That promotion, which ends September 15, offers rebates of up to US$299 toward the purchase of an iPod Touch or iPod Nano when purchased with a qualifying Mac.

Apple has introduced other products at the same time it's announced changes to the iPod line, Gartenberg said. "They hinted last July that we'd be seeing new products this quarter," he said.

When Apple released its second-quarter financials in July, Peter Oppenheimer, the company's chief financial officer, said that a "product transition" in the next quarter would significantly reduce its profit margin, talk that set off speculation that the company would have to debut some major redesigns of existing hardware or unveil something markedly different to actually impact its bottom line.

"Remember, it's still early September," said Gartenberg. "There's a lot of time between now and the end of the quarter."

"I still think that there's a significant notebook refresh coming later this fall after the back-to-school promotion ends," said Gottheil.

"The question is, will there be other things besides iPods that we'll see tomorrow?" Gartenberg asked. "Will there be that 'Oh, one more thing' moment from Steve Jobs?"

Computerworld blogger Seth Weintraub has also tossed his predictions into the ring. Among them: The release of an iPhone/iPod touch software update and the launch of iTunes 8, which Weintraub said would feature a personal music recommendation system.

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