Apple Unveils Video iPod, TV Deal

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After months of rumors, Apple Computer unveils a new iPod with the ability to play video. It also made an unexpected announcement: a groundbreaking deal with ABC that will allow users to download episodes of shows such as Desperate Housewives from the iTunes store.

MICHELE NORRIS, host:

Get our your bifocals. Apple Computer confirmed rumors today when it unveiled a new iPod with video. And it made a surprise announcement: A deal with ABC Television Group that will allow fans of shows like "Desperate Housewives" to download episodes from the iTunes Store. NPR's Laura Sydell reports.

LAURA SYDELL reporting:

Apple's CEO Steve Jobs made the announcements with his usual showmanship in a packed theater in downtown San Jose. He staged his show in three acts: Act one, a new iMac computer with easy video and a remote control; act two, the must-anticipated iPod video. Jobs unveiled the latest model of what he calls the wide iPod.

Mr. STEVE JOBS (CEO, Apple Computer): What about the wide iPod? It's been a huge success and, therefore, it's time to replace it.

(Soundbite of laughter)

SYDELL: The new wide iPod comes in two colors--black and white--and two prices, 299 or 399. The new iPods hold up to 15,000 songs or 150 hours of video.

Act three: Jobs introduces the new version of the iTunes Store, which includes music videos. But Jobs relishes surprises, and they always begin with what has become his much-anticipated and now cliched line.

Mr. JOBS: But we do have one more thing today. One more thing.

SYDELL: Jobs then announced a groundbreaking deal with ABC Television Group.

(Soundbite of "Desperate Housewives")

Unidentified Woman: Previously on "Desperate Housewives"...

SYDELL: The iTunes Store will now sell episodes of five ABC and Disney shows for $1.99 each: "Lost," "Desperate Housewives," "That's So Raven," "The Suite Life of Zack and Cody" and a new program, "Night Stalker." Fans will be able to buy shows from all the previous seasons and...

Mr. JOBS: Yes, you can buy current episodes. And you can buy them the day after they are broadcast.

(Soundbite of cheering and applause)

SYDELL: It will be possible to watch the shows both on a computer and an iPod. Bob Iger, Disney's current CEO, joined Jobs onstage and called the partnership a beginning.

Mr. BOB IGER (CEO, Disney): One of the things that Steve and I are incredibly excited about is the intersection between great content and great technology. And we're really excited about it because of the opportunities that that intersection, or that marriage, actually creates.

SYDELL: After the show, reporters, guests and analysts roamed through the theater examining the new devices. Mike McGuire, an analyst with Gartner Group, thinks Jobs and Disney have taken a major step towards a future where this is how most people will get their entertainment.

Mr. MIKE McGUIRE (Gartner Group): Not to buy in totally into Steve's showmanship, but yeah, in 24 hours, they've managed to change a lot of our preconceptions about what we ...(unintelligible) the media business to be for the last several years. And--oh, it's changed very quickly.

SYDELL: McGuire is still uncertain how consumers will take to the small-screen iPod to watch their videos, but he does believe they will like getting their entertainment whenever they want for a small price and without commercials. That, he thinks, might send some shudders through the advertising industry. He thinks there are already people from other networks thinking about having a chat with Steve Jobs.

Mr. McGUIRE: And I think what's going to be a very interesting race to see who gets the best--first flight out to San Jose to cut licensing some deals with these guys.

SYDELL: McGuire says right now he doesn't see much competition for Apple. For consumers who want to download programs from the iTunes Store, that can happen right away. But the new iMac and iPod won't be stores until next week. Laura Sydell, NPR News, San Francisco.

NORRIS: It's ALL THINGS CONSIDERED from NPR News.

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