Touch-screen video iPod claimed in development

Two separate reports today claim that a “true” video iPod with a large touch-screen display is on the way. Both Needham & Co analyst Charles Wolf and Apple news site Think Secret believe that this new iPod will likely be introduced at a special event to celebrate Apple’s 30th anniversary in early April. Apple CEO Steve Jobs alluded to some sort of celebration during last month’s Macworld Expo keynote speech.

“Apple was careful to call the iPod capable of displaying video that it introduced in October just that—an iPod that played music but also featured a video viewing capability,” Wolf wrote in a research note obtained by iLounge. “According to our sources, the screen on the Video iPod will occupy the entire front of the current iPod with a touch-activated scroll wheel. Assuming the same form factor as the current iPod, this move will increase the size of the screen three-fold.”

A Think Secret report claims that the new iPod will feature a 3.5-inch diagonal display and shed its mechanical click wheel. “This video iPod, which has been in development and on the table since before Apple released the 5G iPod last year with video playback, will feature a display that will occupy the entire front face of the device,” the site reports. “Sources who have seen the device report that it features a digital click wheel, one that overlays the touch-sensitive display and appears when a finger touches it and disappears when the finger is removed.”

Wolf says the growing collection of video content on iTunes is a sign of a new iPod. “In our opinion, the rapid increase in the iTMS’s video offerings is a strong signal that an iPod with a much larger screen is on the way,” he said. Wolf also cites reports from Asia that fifth-generation iPod production has been reduced. “One hypothesis is that sales of this model have fallen below Apple’s previous expectations for the quarter,” the analyst wrote. “An equally plausible hypothesis is that Apple is draining inventories of the iPod from the distribution channel in advance of its introduction of the new model.”