Apple moved on Wednesday to extend its dominance over the digital music marketplace, introducing a compact iPod called the Nano, and confirming a widely reported digital music partnership with Motorola and Cingular.
With his usual showmanship, Apple's chairman, Steven Jobs, saved the introduction of the new solid-state version of the iPod for last, slipping it from the change pocket of his Levi blue jeans at the end of a press event at the Moscone Convention Center here.
The iPod Nano, which stores either 500 or 1,000 songs and is priced at US$199 and US$249, is intended to replace an existing model, the iPod Mini. The new device will be available in the US, Japan and Europe this week.
PHOTO: AFP
"The iPod Nano is the biggest revolution since the original iPod," Jobs said.
In an interview after his presentation, he called the new player, which is one of the industry's smallest, a "bold gamble."
By replacing the Mini, which accounts for more than half of all iPods currently sold, the company risked a huge revenue shortfall if the new product had been delayed, Jobs said. Despite that risk, he said, the Nano reflects several innovations.
He focused on the shift away from the small disk-drive storage device used in the iPod Mini to the solid-state flash memory at the heart of the Nano. He said the custom chips and miniaturized circuit board used in the Nano had also been potential stumbling blocks.
"Entire factories were created to make this device," he said. "Overnight we have become the largest consumer of flash memory in the world."
The flash memory enables the device to be smaller and more durable.
Jobs described an Apple "top 100" meeting earlier this year -- a retreat of the company's top employees -- where he urged those attending to take a big risk rather than fall into complacency in protecting the firm's lead in digital music.
Other gambles that Apple might have taken -- a video set-top box, a personal digital assistant, a portable video player -- have yet to come to pass after waves of speculation. Still, several analysts concurred that Jobs was taking a significant gamble with the Nano and said it was likely to be successful.
"It looks like a really hot product," said Michael Gartenberg, vice president and research director of Jupiter Research, a market research firm.
The Nano comes with a color screen and the company's distinctive click-wheel navigation feature. It measures just 4cm by 5.6cm and is almost half a centimeter thick; the Mini, by comparison, is 3.2cm by 5.8cm and a 0.8cm thick. (The comparably priced Mini, however, offered slightly greater battery life than the Nano -- 18 hours versus 14 -- and greater capacity, at 1,500 and 1,000 songs.)
Several analysts said that Apple had moved the introduction of the Nano ahead to ensure it was widely available for the holiday season.
Most of the event on Wednesday was devoted to the unveiling of a Motorola cellphone called the ROKR, which will incorporate Apple's iTunes music software and be capable of storing 100 songs.
The phone, long anticipated, will be available exclusively on the Cingular Wireless network in the US.
The phone, which will sell for US$250, has a color display, but requires that songs be downloaded from an iTunes-equipped personal computer by a USB cable.
Cingular will not offer an iTunes service for buying songs directly over a cellphone connection.
Asked why the phone did not offer the possibility of purchasing music directly, Jobs said that the economics of wirelessly downloading songs to a cellphone would be different from buying them online, probably costing about US$3 a song, though he did not elaborate.
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