Analysts expect video iPod at special event next week

Like many others, two Wall Street analysts are expecting Apple to introduce the much-rumored video iPod at next week’s “One more thing” special event in San Jose, California.

“We would expect a video iPod to have a material ‘wow’ factor, but we believe that it would need to be priced reasonably (less than $400) and be accompanied by a significant library of iTunes accessible video content to not be anything more than a niche product in the near term,” Piper Jaffray senior analyst Gene Munster said in a research report obtained by iLounge. “That said, a first step into portable video would open the door for future product innovations as the company continues to branch out into more of central player in digital and mobile convergence.”

Munster said a smaller form factor high capacity (greater than 10GB) iPod could also be shown at the event, but he does not expect a new Mac computer (other than possible incremental changes to speed and memory), nor does he believe the company will introduce an Apple-branded mobile phone.

American Technology Research analyst Shaw Wu also believes a video iPod will be unveiled next week, and is also looking for speed-bumped Macs. “After spending the past two years studying this market and negotiating with content partners, it appears Apple is ready to go to market with a 1st generation video-capable iPod,” Wu said. “Competitors Samsung, Creative Technology, iRiver, and Archos have shipped portable video devices for some time albeit without much success. We think a key area to watch is the price points Apple will set for these new devices. If Apple can charge under $400 and preferably $299, we believe it will sell well. At higher price points, we believe it may be difficult to drive high volume.”

Wu said he expects that the first set of video content available from the iTunes store will be music videos and video podcasts. “At this point, we do not anticipate full-length feature movies but would not be surprised to see some test movies in the future as the studios are still figuring out their future business model vs. today’s movie theater and then DVD approach,” he said. “We are also picking up indications that Apple could announce an optional external ‘video out’ module that attaches to an iPod video meaning one can output the video to a TV or external screen.”

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