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Apple's next move...media domination?
One analyst's predictions for what new products Apple has in store.
November 14, 2005: 5:35 PM EST
by Amanda Cantrell, CNN/Money staff writer
Apple unveiled the iPod nano in September.
Apple unveiled the iPod nano in September.

NEW YORK (CNN/Money) - Say goodbye to your DVD player and Tivo box?

Perhaps, if one analyst's predictions come true -- they could be replaced by the ubiquitous iPod, according to Piper Jaffray analyst Gene Munster, who issued a research note predicting products in Apple's (down $0.09 to $61.45, Research) pipeline.

While predicting what products the notoriously secretive Apple is going to launch next can lead normally rational analysts into flights of "wild speculation," as Munster put it, he believes the company is gunning to be the consumer hub for digital media -- and that it's got a foundation in place to do that.

Muster said that within five years, Apple could release an iPod with one terabyte of storage -- that's almost 17 times the maximum amount of iPod storage Apple currently offers.

Munster envisions a one terabyte iPod as a portable, "coffee table" media center that would allow users to store hundreds of movies and thousands of photos and songs. Munster wrote that fellow Piper Jaffray analyst Les Santiago, who covers data storage technologies, thinks Apple could feasibly release a $500, one terabyte iPod in the next five years.

Most of Munster's predictions focused on what Apple might roll out in the next 12-24 months. These include an "iPhone," which would mark Apple's foray into the mobile phone market. Munster believes Apple would likely enter this market as a "mobile virtual network operator," a mobile operator that buys access from traditional carriers and re-sells branded access to its customers.

Apple watchers have speculated that Apple may be planning such a move, given that its co-branded "iTunes phone" with Motorola and Cingular only stores 100 songs. Some analysts, such as Albert Lin from American Technology Research, think Apple may be holding out on offering more songs until it rolls out its own version.

Munster also thinks Apple is prepping Macs to serve as a hub for digital media for consumers by incorporating Tivo-like DVR capabilities and refining its existing media center applications. he believes that within a 12 to 24-month time frame, iPod users will be able to download music and video to their iPods through a wireless connection.

Whatever it rolls out in the future, Apple's latest moves indicate that it plans to do for TV and film what it did for digital music – create the demand for downloaded media content by offering a customer-friendly experience.

Last month, Apple unveiled the widely-anticipated video-enabled iPod that allows users to download and play music videos, home movies, and one of five shows from ABC and Disney, including "Desperate Housewives" and "Lost," from its iTunes Internet music store. What's more, they can watch content downloaded onto the video iPod on a normal television. Within a month, Apple sold one million videos and short films through iTunes.

But Apple's already facing stiff competition in the nascent new market, as CBS and NBC announced earlier this week plans to let viewers buy episodes of some of its programs on demand through their television sets at $0.99 per episode, a buck cheaper than what Apple is charging customers to download episodes of "Desperate Housewives" and "Lost." However, CBS and NBC's on demand programs are only available to viewers for a week after they're purchased, according to published accounts. Programs purchased through the iTunes music store are available to users permanently.

Also, the technology for downloading feature-length movies hasn't quite caught up to Apple's ambitions. On a conference call with analysts last week, Steve Jobs, who serves as chief executive for both Apple and Pixar, acknowledged that it still takes too long to download feature-length films over the Internet.

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Munster does not own shares of Apple, but his firm makes a market in Apple's shares. Lin does not own shares of Apple, and his firm does not do banking business with the company.  Top of page

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