Apple unveils movie downloads, player
Company to offer Disney films through iTunes, updates line of MP3 players, sets debut for new iTV player.
By David Ellis, staff writer

NEW YORK ( -- Apple Computer Inc. unveiled its new movie download service Tuesday, becoming the latest company trying to secure a toehold in what could be a rapidly expanding entertainment market.

The company also updated its entire line of popular iPod MP3 players.

Apple unveiled updated versions of its entire line of iPod players at the event in San Francisco.
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Under the new movie service, consumers will be able to choose from over 75 movies from Miramax and Walt Disney Co. (Charts) studios - Disney, Pixar and Touchstone - to download from the company's popular iTunes store.

New releases will cost $12.99 initially and $14.99 later, while older films titles will be $9.99, Apple said.

The movies will include "Pirates of the Caribbean: The Curse of the Black Pearl," "Shakespeare in Love" and "The Incredibles." Consumers will be able to download the films to watch on their computers and iPods.

"In less than one year we've grown from offering just five TV shows to offering over 220 TV shows, and we hope to do the same with movies," Apple CEO Steve Jobs said in a statement. "iTunes is selling over one million videos a week, and we hope to match this with movies in less than a year."

Apple's iTunes store has become wildly popular among consumers since its launch, having sold 1.5 billion songs to date, according to the company.

Apple also said users will soon be able to watch the movies on TV with the upcoming release of a new product dubbed the iTV player.

"We believe the iTV concept could make AAPL (Apple) a bigger player in the digital home," UBS analyst Ben Reitzes wrote in a research note after Apple's announcement.

Apple is also updating its iPod line, rolling out a new 30-gigabyte version priced at $249 and a new 80-gig model for $349, which will hold up to 20,000 songs or 100 hours of video.

The company also said it will offer a new, thinner iPod Nano that will feature a 24-hour battery life and more storage capacity, as well as a 1-gig iPod shuffle.

Reitzes also wrote that the new iPod products could help drive Apple sales higher for the rest of the year.

Apple also announced that highlights from NFL regular season games this year will be available for purchase through its iTunes store for $1.99 a game. And it's offering video games, including Pac-Man and Tetris, also through iTunes, that can be played on the new full-sized iPod.

The new movie service, which was widely anticipated prior to its announcement by Jobs in San Francisco, comes on the heels of several similar announcements made recently.

Last week, Amazon (Charts) launched its new Unbox movie download service service, while wireless phone company Sprint Nextel (up $0.25 to $16.73, Charts) announced a deal to offer movie downloads of movies onto cell phones.

Two closely held firms, MovieLink and CinemaNow, also offer their own movie download service.

While Apple might not have a lot of backing by studios, Shannon Cross, an analyst with Soleil-Cross Research, said new partnerships between Apple and other studios could be forthcoming.

"Assuming they show success in these relationships, and I think they will, they will get other studios signing on," says Cross. "At the end of day it's revenue for the studios."

Apple (Charts) shares rose about 0.5 percent in heavy trading on Nasdaq Tuesday.

Shares of Microsoft (Charts), which is fighting back with its own music player against Apple, also closed slightly higher.


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