Apple Debuts Audio Player

CUPERTINO, Calif.—Apple Computer Inc. on Tuesday burnished its vision of a consumer-friendly "digital hub" when CEO Steve Jobs introduced a new product category that breaks the Mac mold: the iPod, a portable digital audio player equipped with a FireWire connection.

For good measure, Apple also took the wraps off Version 2 of iTunes, the companys consumer application for creating digital audio playlists.

The iPod, which plays MP3, .WAV and AIFF audio, is slated to ship Nov. 10 for $399. The new device packs a 5GB hard drive that Jobs said could store 1,000 songs at a bit rate of 160Kbps. Via the FireWire interface, users can download an entire CD in less than 10 seconds, Jobs said. It automatically recharges via the FireWire cable when users are downloading audio files.

In addition, the iPod will also be able to serve as a portable FireWire hard drive, Jobs said. The hard drive space not filled with music, he said, could store data files for transfer from Mac to Mac, with the iPod appearing on the desktop as another hard drive. An unsupported feature mentioned on the iPod Web page is that users could store the basic components of a Mac operating system on an iPod and use it to boot any FireWire-enabled Mac.

The systems lithium-polymer battery can power the iPod for 10 hours and takes one hour to charge. The devices chrome chassis measures 2.43 by 4.02 by 0.78 inches, and the iPod weighs 6.5 ounces. It features a backlit, 2-inch LCD display and a scroll wheel for browsing through audio files by play list, artist or song.

It includes a 60-mW amplifier and comes with earphones outfitted with neodymium transducer magnets, which the company said support a frequency range of 20 to 20,000 Hz.

The new device will work with iTunes 2, which will be available for free download in November to users of Mac OS 9 or Mac OS X. The new version of the software supports direct burning of MP3 CDs without converting the files to AIFF, cross fading and an equalizer. When Mac users connect their iPods, iTunes will launch automatically and download all songs and playlists to the device.

Jobs pointed out that though there were competitors in the music field, there was "no market leader."

"People trust the Apple brand," he said, adding that only Apple, with its vertical integration of operating system, applications (which he termed "iApps"), and hardware could make the iPod.

Jobs also stressed that the iPod and iTunes did not include any built-in digital rights management (DRM) features. "Piracy is not a technology issue; its a behavior issue," he said, noting that every security scheme based on technology and secrets has so far been defeated.

Though currently iTunes 2 and the iPod require either Mac OS 9.2.1 or Mac OS X 10, Jobs said that its not inconceivable that Apple might produce Window-compatible versions. "We will look into taking it to Windows down the road," he said, adding that the company was currently focusing on the existing product.

A Frenzy of Speculation

The company last week sparked a frenzy of speculation when it sent out an intriguing invitation to journalists to witness the rollout. ("Hint: Its not a Mac," the mailing read.) Many news and rumor sites speculated that the device would be used for digital music recording and playback.

Sources reported that the security-conscious Apple kept a tight lid on the new product even within the confines of its Cupertino campus. While the company reportedly considered unveiling the gear to employees on Monday, Jobs instead issued a memo inviting them all to watch the Tuesday rollout via closed-circuit video.

The iPod marks Apples first foray into peripherals beyond the basic mouse, keyboard and display since the company pulled the plug on its imaging hardware division. The group, which shipped its last laser printer in 1999, generated billion-dollar revenues in the 1980s and 90s with an assortment of Apple-branded printers, scanners and digital cameras.

"Not in it for overnight success"

Tim Bajarin, an industry analyst with the Campbell, Calif.-based firm Creative Strategies, said that he believed the iPod would be a plus for Apple in the long run, even if it currently faces less-than-optimal conditions.

"Given Apples digital hub strategy, it was only a matter of time before they brought out a product that enhances the digital lifestyle," he said. "With the Apple stores and the ability to control sell cycles, theyre now bringing in new products to enhance the overall Mac experience."

About the iPods Mac-only nature, Bajarin said "in one way, its a risk." However, he explained, "Steve has a strategy in mind: to create products that work well only in the Mac environment" but are so desirable that they could spur sales of Macintosh computers. Even without Windows converts, though, Bajarin said he thought the iPod could be a "hit." He noted that despite the new-form hard drive, iPods still commanded a 25 to 30 percent margin -- in line with Apples other products but strong in the commodity consumer market.

"Its a brand enhancer," Bajarin said. "Apples not in it for overnight success."