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The Honolulu Advertiser
Posted on: Wednesday, September 13, 2006

Apple launches movie service, iPods with brighter screens

By Andy Fixmer and Ian King
Bloomberg News Service

Apple Computer Inc. began selling 75 full-length Walt Disney Co. films over the Internet yesterday, including the first "Pirates of the Caribbean," and introduced iPod players with brighter screens and more storage.

Apple's iTunes store will offer new releases from Disney for $14.99 each on the same day DVDs are available, Chief Executive Officer Steve Jobs said yesterday in San Francisco. Older movies will cost $9.99.

He also cut prices on iPods and offered a matchbook-size iPod Shuffle.

The movie service and new products may help Jobs, 51, defend his dominance of the market for digital entertainment against rivals such as Microsoft Corp. and Amazon.com Inc. With the introduction next year of a device that plays films over TV monitors, Apple also may become a threat to DVD retailers such as Wal-Mart Stores Inc.

"Apple is getting further and further into the digital home, and that's a good thing," said Stephen Coleman, chief investment officer of St. Louis-based Daedalus Capital/Chicken Little, which owns Apple shares. "Their ease-of-use will be key to their becoming the de facto leader."

The new iPods have screens that are 60 percent brighter and longer-lasting batteries, Jobs said.

A model with 30 gigabytes of storage costs $249, down from $299. An 80-gigabyte version costs $349, down from $399 for 60 gigabytes. Batteries on the largest iPod will last as much as 6.5 hours for video viewing.

Jobs also introduced iPod Nanos with storage of as much as 8 gigabytes, selling for as much as $249. The smallest iPod Shuffle will have 1 gigabyte of storage and sell for $79.

That may spur low-end sales, said Janna Sampson at Oakbrook Investments in Lisle, Illinois who helps oversee investments in Disney and Apple.

"You can reasonably give it to a small child," Sampson said. "If you lose it, it's not like losing a $300 iPod."

Apple plans to sell a device that allows viewers to see movies through their TV sets using a connection to the computer. The product, called iTV, will cost $299 and be released in the first quarter of 2007.

ITV will boost iTunes sales and offsets the lack of a wide-screen iPod, said Chuck Jones, an analyst at Atlantic Trust Stein Roe in San Francisco, which has $16 billion in assets including Apple shares.