Monday, July 09, 2007, 09:00 am PT (12:00 pm ET)
Analyst sees next-gen touchscreen iPods by MacworldSpeaking to clients in a research note Monday, investment research firm Piper Jaffray said it believes Apple will soon introduce a new breed of video iPods based around the same technologies used in the iPhone handset.
"We believe the iPhone reveals much of what the iPod will soon be," wrote analyst Gene Munster. "Specifically, we expect Apple to release high capacity iPods based on OS X sometime during or before Macworld '08 in January."
Munster said the new digital media players will likely have touch-screen media features akin to the iPhone, but will not include wireless phone capabilities or Internet features.
The analyst's comments appear to draw from those of Apple chief executive Steve Jobs, who during an internal Apple meeting last month hinted that the company was working on next-generation iPods that, like iPhone, would run an embedded version of the Mac OS X operating system.
In his note to clients, Munster went on to say new touch-screen video iPods could both curb cannibalization of the players by iPhone and boost the company's margins at the same time.
The analyst estimates yearly iPod growth to fall from 35 percent in fiscal 2007 to just 13 percent by fiscal 2009. However, he notes that OS X-based iPods with some of iPhone's features could help lessen the impact of the cannibalization.
"We believe iPhone buyers are looking for a better mobile phone, and the iPod features are an added bonus," the analyst wrote. "Based on recent survey work, we believe most the current iPod base is simply looking for a better iPod.
Munster speculated that new video iPods in the $299 price range, which include some of the iPhone's new iPod features but not its telephony and Internet capabilities, would likely address such demand.
Should those new OS X-based iPod models share iPhone components and software, it will add economies of scale to the iPhone business, he said.
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