Next-gen video iPod still a ways out, sources say

People consistently familiar with the iPod maker's future music directions say rough estimates for the new video and music player are tracking for the third calendar quarter of the year.

At the same time, however, other well-placed sources have approached specific time frames with caution, explaining that a mix of uncertainties — in particular those relating to the roll-out of iPhone — could leave consumers hung up till early next year.

Although Apple eventually intends to break widescreen video capabilities away from the iPhone for a device of similar proportions, sans the cellular capabilities, expectations of first-half 2007 launch are said to be overly ambitious.

Those people familiar with the matter say such a move would serve only to dilute the value of the iPhone and, similarly, the device's worth to wireless carrier AT&T. The findings are consistent with earlier AppleInsider reports, which placed bets against a standalone widescreen video iPod debut early in the year and prior to the company's Apple TV push.

Among the potential challenges believed to be facing Apple ahead of its sixth-generation iPod launch is a required margin of differentiation between the player and iPhone, both of which are expected to carry relatively similar price points upon availability.

Although the consumer electronics company has said its iPhone device will retail for $499 and $599 in 4-gig and 8-gig capacities, the real-world cost to consumers will inevitably fall about $200 for each model, be it through direct subsidization or complimentary wireless service packages.

In its ongoing quest for a preferred and precise iPhone pricing method, Apple last month enlisted the services of a prestigious management consulting firm specializing in go-to-market strategies. Among the firm's recommendations, people familiar with the matter say, were that Apple compel AT&T to give away service plans with each iPhone sale, maintaining the integrity of the device's higher price points.

Should all parties oblige, Apple would maintain a separation of price bands between its next-generation video iPod and its iPhones. However, in the event it take the direct subsidization route — as a recent pricing survey suggests — the key to differentiation could rely heavily on advances in solid-state memory.

With rapid price declines affecting the NAND flash market, Apple has reportedly initiated prototype mockup and other exploratory techniques as it anticipates a shift in the flagship iPods away from 1.8-inch hard disk drives and towards all NAND flash.

Come late this year or early next, a combo of discounts in NAND flash pricing and Apple's long-term supplier agreements could allow the company to deliver an all-flash player with an approximate 32GB capacity. Such a move would also pave the way for significant increases in battery performance and give way to slimmer, sleeker designs.