Apple expands core business to include movies

13 Sep 2006

Recent rumours were proved correct as Apple last night unveiled a new online store for downloading digital movies in “near-DVD quality”, as well as refreshing its range of iPod players and hinting at a new device for the connected home.

The new iTunes 7.0 online audio-visual store now offers a selection of 75 movies from the Disney studio labels including Walt Disney Pictures, Pixar, Touchstone and Miramax. The store will also let consumers download and watch some 220 television shows as well as video games that can be played on the iPod.

In addition, Apple revealed early details about a yet to be launched product, codenamed iTV, that will let consumers stream movies, music, photos, podcasts and television shows from the web to their home entertainment systems. The combined hardware and software device could be a significant play in the home entertainment market, as it promises to bring the computer and TV much closer together. The iTV is likely to have a new name when it starts shipping early next year, priced at US$299.

Movies available at launch time include Pirates of the Caribbean: The Curse of the Black Pearl, Shakespeare in Love, The Princess Diaries, The Incredibles, National Treasure, Toy Story and The Rock. Customers can purchase and download movies from iTunes the same day they become available on DVD or pre-order upcoming movies which are automatically downloaded when they become available.

New releases will cost US$12.99 when pre-ordered and during their first week of availability and US$14.99 thereafter, and library titles are available for just US$9.99 every day. At press time there was no movie download facility on the Irish version of iTunes.

Apple also updated its range of iPods, releasing new versions of the Shuffle, Nano and standard models. With a nod to the greater capacity needed for video, the top of the range iPod is available with a capacity of 80GB, equivalent to 100 hours of movies, and offers 20 hours of battery life.

The timing of the announcement couldn’t have been better, as recent press articles and blogs had begun to suggest that the iPod was at risk of losing its lustre, with sales in the past two quarters slowing and a perception that what used to be a ‘must-have’ device was becoming too common to be cool.

The technology analyst firm Ovum called Apple’s move into online movies as “a clear sign that the company intends to extend its dominance in the online music market into the embryonic but growing online film and TV distribution sector”.

But Ovum warned that this doesn’t necessarily mean the latest announcements put Apple out of sight of rivals. “Regardless of who the front runner is now, we conclude that the best technology, pricing and content offer will eventually determine who is king of this currently tiny but potentially lucrative long-term broadband content segment,” the firm said.

By Gordon Smith