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By this point, you’ve hopefully seen all the news, photos and First Looks we’ve posted from Apple’s It’s Showtime event in San Francisco: what’s missing right now is the ‘big picture’ view of the event, and what this really means to Apple, iPod fans, and the industries they’re impacting.

In a sentence, Apple’s delivery today was one step short of phenomenal in each category. The new iPod nanos represent almost everything average users have been clamoring for - hard shells, more capacity for the dollar, and color options. Does the nano need to play video? Not yet, really; it lacks the storage capacity to really hold videos. Gut feeling is that flash memory prices and the resultant ability to store video on flash devices make this nano long in the tooth by early- to mid-2007, but for the 2006 holidays, it’s going to be huge.

Hard to believe, but the iPod shuffle even got better, shrinking further, gaining a metal body, and hitting a lower-than-ever 1GB price. Did the shuffle need a screen? Not after the nano came out; we frankly would have preferred that Apple just kill this product and replace it with a $99 1GB nano, but what the heck, $79 for that little thing is fine by us, and great for athletes who just don’t care about a screen. Rear clip could become an issue - we’d prefer more types of wearable options - but we’ll see.

Apple’s updates to iTunes? Overall, awesome. Videos at 640x480 were exactly what we wanted, and the new interface tweaks are great, too. Movies added to the store? Great. The pricing is even decent, except for two caveats: Target and the like will cream fixed-price iTunes movie sales of Library titles because of their increasingly frequent $5-7 sales of uncompromised DVD-quality videos. And you can’t burn iTunes movies to DVDs and watch them without carrying around an Apple-compatible device, which is pretty weak. Pricing flexibility (”$9.99 max”) would really fix the former; better fair use rights the latter.

iTV also has a lot of potential, though its price is almost ridiculous ($299? No.) and really needs to fall before it’s released in Q1 2007. More comments on this one when it’s closer to release.

The one and only letdown of this event was Apple’s failure to deliver the next-generation video iPod everyone’s been hoping for. We’ve known since last year that the 5G iPod was a sub-optimal video player - the 2.5” screen is not as big as it needs to be, and backed by limited format support. Today’s substitute - a “second-generation fifth-generation iPod,” as one Apple staffer called it - isn’t enough. People who held off on the last 5G aren’t going to bite on this one, despite its improved battery life and screen brightness, because size matters in this case. Firmware updates (gapless playback/search menu) aside, the storage capacity bumps and price decreases are great, in our judgment, but not what people have been asking for.

Overall, this was a big day for Apple, and one that guarantees that it will own the 2006 holiday season… for one reason. Going into this event, the question was how Apple would stack up to its biggest potential competitors - SanDisk on flash, Microsoft on hard disk. The answer looks like this: Apple now has a price advantage over both companies, but it’s being outgunned on features by both of them - Sansa with FM radio and screen size, and Zune with an even bigger screen and wireless functionality. At the moment, it seems like Apple is ahead of the curve in size, cosmetics, and likely battery life, but sliding behind the curve on interface and screen technology. We’ll reserve judgment on the latter point until we’ve played with final Zune and (perhaps) newer Sansa hardware, but Apple seems to have its 2007 model engineering work cut out for it.

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