By Richard Menta 7/29/03
Word has been spreading for a while now that Apple has a version of the iPod in the works that will play MPEG4 video files. Like many Apple rumors, it is probably premature if not downright wishful thinking.
Yet, as they persist one cannot escape the fact that such a product would fit into Apple's game plan perfectly, especially after the rousing success of their iTunes service.
The 8GB Sansa e200 series is available on Amazon
It is this service that drives the possibility of such a new player being created. The triumph of iTunes has had a direct affect on iPod sales, which, according to some sources, now accounts for one out of every two MP3 players sold -- this despite the fact that the service is only for Mac users right now. Surely, this success can be repeated with a digital video portable.
This brings us to some other speculation. This fall Apple plans to launch a version of iTunes for the much larger Windows audience. There are already several companies in the process of retooling their offerings in hopes of beating Apple to the punch. Rumor has it that they'll get trumped when Apple premieres an online service for PCs that also sells digital movies.
As with music sites, there are also pay for movie services available like MovieLink, MovieFlix, MP4.com and LikeTelevision. These sites have only had modest success to this point, though, experiencing the same troubles that all of the pay for music sites did before iTunes came along. Apple, in its drive to become a digital media company, is certainly aware of this opportunity to take a huge piece of this burgeoning market, too. The difference is they have the advantage/confidence that comes with knowing they have already made it work for music.
If Apple does indeed sell digital video files online, they will no doubt want to have a matching player to capitalize on the hardware end. One that will feed back and forth to the service in a symbiotic relationship that will enhance both. Enter the iPod Movie player.
There are other ways Apple will benefit from such a move.
Presently Quicktime is in a fierce battle with Microsoft and Real for digital video dominance. As far as Internet delivery is concerned, it is actually a two-way race right now where Quicktime is an also ran to the other two. All three offer MPEG4 support right now, but things are still wide open as to whose "wrapper" will standardize the relatively new codec. For now, Microsoft's AVI format is the clear MPEG4 leader on the P2P services. It is also the format used by Archos, the only manufacturer to offer a digital video portable as of this writing.
As we are starting to see, this doesn't always guarantee long-term success. Microsoft's WMV audio codec is on most MP3 portables and Windows-based pay music services. For quite a while it was second in use to the MP3 format, though in comparison to MP3 its use was marginal.
iTunes success has changed all that. iTunes sells music using the AAC codec. In just a few weeks, iTunes sold millions of songs and in the process propelled AAC to the number two codec used today. The speed of this change suggests a significant weakness in Microsoft's presence as a digital media force, one that an iTunes/iMovie combo can exploit to benefit Quicktime.
Despite the possible merging of iTunes and an iPod video, there is the fact that an iPod video unit would still be compelling to consumers on its own. As we mentioned, Archos already has a line of such players (we are presently finishing up a review of the Archos AV320 audio/video recorder), and RCA will release its Lyra Audio/Video Jukebox this fall. As this new niche heats up, Apple's track record with the dominant audio iPod suggests they would gain strong market penetration in the digital video segment immediately.
The wild card here is the movie and television industries, which see file trading to be as much of a threat as the record industry does. As products like the Archos and RCA players can record from TV and DVD these industries will probably pose some resistance as recordings can find their way to the file trade services. Fortunately, these two industries have seen the mistakes the music industry has made and seem inclined on not repeating them. Promoting an Apple service gives them more control than lawsuits against file traders (it doesn't mean they won't sue individual P2P users like the RIAA is trying to now do, just that they will weigh their options more first).
All this bodes well for an iPod mediabox appearing soon. My bet is not if it will happen, but when.
The 4GB iPod Nano is available on Amazon
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