Apple to tackle consumer electronics; iPod \"boombox\" planned

Sources familiar with the company's plans describe the new products as "iPod companions" rather than "accessories," and say Apple appears ripe to announce the first of the gadgets as early as the second week of January at the annual Macworld Expo in San Francisco, Calif.

One such product described to AppleInsider is an iPod boombox "unlike anything seen in boombox world" and strikingly different from "anything Apple has released in the past."

Details of the device are few and far between, but one source called the gadget an oversized iPod with boombox-type speakers. "It's ideal for use on a bookshelf or on the go," the source said.

The device is rumored to include wireless audio streaming capabilities, but could also rely on a built-in hard drive, iPod dock, or a combination of the three technologies. Nevertheless, the Cupertino, Calif-based iPod maker is expected to market the device as "plug and play music for your home."

Some earlier reports had referred to the boombox as an "iPod radio," suggesting Apple may have considered integrating satellite radio capabilities into the device. Apple is known to have been in talks with Sirius Satellite Radio over the past year, but even the most recent reports on the subject imply a partnership between the two companies has yet to materialize.

In releasing a slew of new iPod companion products, sources say Apple hopes to expand its foray into the lucrative consumer electronics and digital audio accessory markets, where the company has realized some of the heftiest profit margins.

With Apple reportedly preparing to announce sales of over 40 million iPods early next year, consumers have shown a willingness to purchase add-ons at an expanding rate, catapulting the iPod accessory market into a $300 million business. This is due largely in part to Apple's marketing, a vast increase in the number of world-wide iPod distribution points and rising iPod accessory attach rates over the last couple of years.

Gavin Downey, a director of product management at accessory maker Belkin Corp, recently told the Boston Globe that during the early days of the iPod consumers were purchasing one accessory for every 15 to 20 iPods sold. Today, it's almost a one-to-one ratio, he said.

Sources say Apple hopes to leverage the booming iPod business and its strengths in distribution by aggressively marketing the upcoming iPod companion products alongside its digital music players at big box retailers like Wal-Mart, Best Buy, Circuit City, and Radio Shack.

The forthcoming iPod companion products have been under development inside Apple's iPod division for the better part of the year, with the origins of at least one product dating back to 2003, according to sources.

Since its inception in May of 2004, the iPod division has operated under the direction of Apple senior vice president Jon Rubinstein and the watchful eye of Apple chief executive Steve Jobs. Apple's vice president of iPod engineering, Tony Fadell, is currently shadowing Rubinstein in preparing for next April when he will take over the reigns following Rubinstein's retirement.

With now less than a month to the kick-off of Macworld Expo, Apple enthusiasts have begun to speculate wildly over what Jobs may have up his sleeve. Several reports have pointed to Apple releasing the first Intel Macs, while others highlight expected iPod and audio/video service announcements.

One analyst believes the company, along with Jobs, is gearing up to put on a heck of a show in January

"Macworld could be a circus," said UBS analyst Ben Reitzes. The analyst expects a slew of new products that could include Intel Macs, and other new hardware, content and services.