Rumors fly on upcoming Apple gadgets
Analysts, bloggers expect Intel-based Macs and more will debut at annual Macworld expo.
By Amanda Cantrell, CNN/Money staff writer

NEW YORK (CNNMoney.com) - Apple is notoriously tight-lipped about its upcoming products and deals, but the rumor mill is in high gear as the company preps for the 2006 Macworld Expo, starting today in San Francisco.

Here's a look at some of what Apple watchers expect the company to announce.

Intel-based Macs
Apple CEO Steve Jobs will unveil new products in his keynote speech on Tuesday.
Apple CEO Steve Jobs will unveil new products in his keynote speech on Tuesday.
Analysts think Apple could unveil a new iPod Shuffle at Macworld
Analysts think Apple could unveil a new iPod Shuffle at Macworld

The most pervasive rumor so far is that Apple will unveil its first computers to include Intel chips at Macworld – months ahead of Apple's original target date. Several analysts, including Citigroup's Richard Gardner and UBS' Benjamin Reitzes, have forecast this. Apple computers currently use chips from IBM and others.

"I don't have any independent confirmation on [the Intel Mac speculation,] but I'd say it's a pretty good bet," said Roger Kay, an analyst with Endpoint Technologies. Kay added that Apple (Research) may bill the Intel Mac as the penultimate announcement, but then tack on a surprise announcement following that, a formula he said Apple has down cold.

"They try to roll out (new products) at a pace where just as you're catching your breath with the last one you get whacked with the next one," he said.

Citigroup's Gardner believes the Intel Mac launch will coincide with the introduction of Intel's (Research) new dual core processors, called "Core Duo," which were unveiled last week at the Consumer Electronics Show in Las Vegas. He thinks the PowerBook laptop line will be the first line to get new chips, but he doesn't expect Apple to roll out Intel-based iBook laptops until May or June, the peak selling season for the educational market, Gardner wrote.

PiperJaffray analyst Gene Munster agrees that Intel-based Macs are likely, but he believes Intel-based iBooks have a good shot at showing up at Macworld, as does Steve Lidberg, an analyst with Pacific Crest Securities.

An earlier launch means Apple would avoid the risk of a sales slowdown in the first half of the year caused by consumers waiting for the newest models to come out. Also, Core Duo processors are said to provide better performance and improved power consumption than the chips Apple currently uses from Freescale Semiconductor (Research) and IBM (Research).

Mac Mini update

Lidberg is also among a handful of analysts who think the Mac Mini, Apple's sub-$1,000 desktop line of diminutive computers, will also get refreshed. Citigroup's Gardner thinks the mini could be one of the Mac lines to debut with Intel chips at the expo, as does PiperJaffray's Munster.

UBS analyst Reitzes, who predicts Macworld will be "a circus," agrees that a new Mac mini could be imminent, "perhaps as a digital media device," he wrote in a recent note. On that front, one Macworld rumor is that Apple could roll out new Mac minis with FrontRow, Apple's own entertainment PC software, according to people in the industry.

Many analysts and investors have wondered what Apple CEO Steve Jobs is planning on the "digital living room" front, in order to make Macs and iPods the centerpiece of the consumer's home entertainment experience. Jobs has not made clear how he plans to do this, though with the introduction of the video iPod, it's clear he is thinking in that direction.

The "digital living room" was a big theme at this year's CES, with Intel rolling out its "Viiv" line of entertainment-based PCs and Microsoft (Research) unveiling early demos of its newest Media Center software and Vista operating system. Media Center 11 and Windows Vista are set to debut this fall.

Citigroup's Gardner wrote that his team was impressed with early demos of Media Center 11 and Vista, and expects these products to give Apple "more software competition than it has had for five years."

Reitzes added his research team still believes Apple may expand its "digital hub" offerings, including the possible introduction at Macworld of a product with DVR-like functionality.

New iPod Shuffles; iPod boom box?

Pacific Crest's Lidberg thinks the company will announce new versions of the iPod Shuffle. He adds that Apple's announcement that it will not re-stock the one-gigabyte version of the iPod Shuffle until January is a strong hint in this direction.

Citigroup's Gardner wrote that his team expects a newly redesigned iPod Shuffle with a screen, something the Shuffle has never had before. He thinks Apple may also unveil a 1-gigabyte iPod nano.

The Apple news site AppleInsider.com predicts Apple will go further into the consumer electronics market with several iPod-related audio gadgets, including an iPod boom box. Citing an unnamed source, the site reported that such a boom box could take the form of "an over-sized iPod with boom box-type speakers." Such a move would expand Apple's reach into consumer electronics, where it has achieved attractive margins.

More content deals

With ABC, Disney, NBC, USA and most recently, ESPN already providing content for the video iPod, look for other major media companies to follow suit, analysts say.

"I don't know why you would see hesitancy on the part of content providers given the initial success" of video sales via the iTunes music store, Lidberg said. The sale of music videos, Pixar (Research) short films, and episodes of TV shows like "Lost" and "Desperate Housewives" proved an instant hit. Customers downloaded one million videos within the first 19 days of their launch on iTunes.

PiperJaffray's Munster concurred, writing, "We would be surprised if Apple does not announce new video content offerings at Macworld. We expect new TV shows and, potentially, feature films will be added to the existing offerings available at iTunes."

At CES, companies including Intel and Microsoft announced content deals for services including movie downloads, which could set the stage for a similar move by Apple.

HBO president Chris Albrecht recently said he'd be interested in striking a deal with Apple, as did the co-chairman of Fox Filmed Entertainment.

Other rumored products include a different version of the iTunes phone than the one Apple launched with Motorola (Research), though Lidberg doesn't see this as imminent.

He said that while it might make sense for Apple to start a "mobile virtual network operator," a mobile operator that buys access from traditional carriers and re-sells branded access to its customers, it probably will not happen for at least 12-18 months, he said.

This is an update of a story that originally appeared on Dec. 20, 2005.

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Analysts quoted in this story do not own shares of Apple, but UBS has banking ties to the company. Top of page

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