Apple Unveils Online Movie Store

Apple Computer CEO Steve Jobs, left, shakes hands with Disney CEO Bob Iger, left, during announcement at an Apple event in San Francisco, Tuesday, Sept. 12, 2006. Apple Computer, which pioneered the online distribution of music and television shows, appears poised to jump into the movie business. (AP Photo/Paul Sakuma) (Paul Sakuma - AP)

Similar media appliances that are designed to link a PC to a television already exist, but none have gained much traction, analysts say.

As a result, relatively few PCs these days are hooked up to television sets. And though others, such as cable providers and startups like Akimbo Systems Inc., have introduced set-top-boxes and services to deliver on-demand videos and TV shows through a broadband Internet connection, full-length feature films from major Hollywood studios either aren't on their libraries, or are only available on a rental basis.

So-called media center computers, such as ones from Dell Inc. or Hewlett-Packard Co., are designed to play and record TV shows. But many still look like they belong under a desk in an office instead of on an entertainment rack in the living room.

"With Apple's superior design of integrating its hardware and software, Apple will still be the one to watch," said Forrester Research analyst Josh Bernoff. "But I think you'll see this market develop in a more fragmented way than the way Apple came to dominate the music market."

Resistance from the movie studios to heed all of Apple's demands and their willingness to work with other movie download providers shows that Apple doesn't hold as much leverage with that industry as it did with music labels when iTunes jumpstarted the legal music download market back in 2003, analysts say.

Still, Apple remained confident about its perch in digital movies and other media _ catapulted by the iPod-iTunes juggernaut.

Apple's lineup of content, hardware and software "is going to make digital media a success and will lead to a breakthrough in the industry," Schiller said.

It's all part of Apple's goal to make its products the digital media hub for consumers. Its iconic iPod player is designed for music and video on-the-go, its iTunes Music Store is a leading destination for getting digital content, and its Macintosh computers are touted for being able to manage all media.

Jobs also announced a slate of iPods upgrades, including:

_ A 24-hour battery life on a thinner, aluminum-cased iPod Nano, which stores media files on flash memory chips. Models, ranging in capacity from 2 gigabytes to 8 gigabytes will come in five colors and sell for between $149 and $249.

_ A larger-capacity video-capable iPod that features an 80-gigabyte hard drive for storing digital music, video and other content. It will retail for $349

_ A smaller-sized iPod Shuffle, which also will sport a built-in clip. It will sell for $79.

The Nano and larger-capacity iPods are available immediately. The shuffle will be available in October.

Jobs also debuted downloadable video games such as "Tetris" or "Bejeweled," that have been designed for the latest video-iPod models. They can be purchased at the iTunes online store for $4.99 apiece.

Shares of Apple Computer Inc. gained 56 cents, at $73.06 in afternoon trading on the Nasdaq Stock Market.