I agree that DIGITIMES is seldom accurate. They seem to tout the "Microsoft is best" flag all too often.

my guess is that the new ipod will offer:

1. more storage space (not too hard to predict)

and either:

2a. bluetooth headphone support

or

2b. built in digital camera (probably less likely, but it would be useful if it was high quality 4MP+ and with flash)

I'm still waiting for the G5 iBooks Digitimes said were a done deal.

If the iPod has any form of wireless, I doubt it would have been in response to hypothetical competition because they probably started the design work as much as two years ago. If MS wants to add WiFi, that's their deal. They get to reap the blessings and curses of that. I think it might be a good marketing bullet point, but they will need to make it a compelling feature from the software and support end to make it a sustainable draw.

WiFi isn't a selling point for a media player for me. I would consider upgrading to get some form of digital wireless headphone support built-in. I'm sick of my headphone cord, I either have to route it under my shirt or allow it to get snagged.

I think bluetooth is more likely, there are already bluetooth head sets out there. But my main thought is with Front Row being bundled with Leopard the iPod Bluetooth could become a controller for it. All Mac's capable of running Front Row are capable of running Bluetooth. Plus add the feature to stream music and video from the iPod to the Front Row or up load to the ipod whilst watching or listening makes it a very nice little package, a kind of digital hub!!

Is this part of the Top Secret bits they are hiding from us, total iPod intergration!

I'm betting on wireless (Bluetooth) headphone support also. This will allow them to transition very smoothly to the Bluetooth iPod Phone.

If we can believe the next article here, then DigiTimes may be right after all.