First music, then TV,now Apple to sell movies

Apple Computer Inc. yesterday made its long-awaited move from hip pockets to living rooms. The company unveiled a service for selling full-length movies over the Internet, and a new device that will broadcast those movies from the user's computer to a standard television set.

For now, the only Hollywood studio to offer movies for sale through Apple is Walt Disney Co., where Apple chief executive Steve Jobs is a board member. But Jobs predicted Apple's movie business would be as successful as its foray into sales of television programs over the Internet.

``In less than one year we've grown from offering just five TV shows to offering over 220 TV shows, and we hope to do the same with movies," said Jobs. ``ITunes is selling over 1 million videos a week, and we hope to match this with movies in less than a year."

Under its deal with Disney, the company will sell new movies at the same time they go on sale as DVDs. Apple will charge $12.99 for new films during their first week of release, raising the price to $14.99 thereafter. Older movies will cost $9.99.

Apple is offering about 75 movies at first, including the first of the popular ``Pirates of the Caribbean" films. Meanwhile, two other movie download services, CinemaNow and Movielink, offer hundreds of films from all of Hollywood's major studios. And last week, the huge Internet retailer Amazon.com launched its own movie download service.

Apart from offering much larger libraries, Apple's rivals let customers choose to simply rent a movie rather than purchase it. Ted Schadler, an analyst with Forrester Research in Cambridge, said that many people want to see a movie just once.

``Not everyone wants to own these things," said Schadler, who expressed disappointment that Apple didn't provide a rental option. In addition, the Apple service won't offer a way for users to burn their purchased movies onto DVDs, for viewing in any kind of movie player.

Instead, Apple wants consumers to purchase its iTV device, expected to cost about $300, which will use WiFi wireless networking to stream video to any standard television set. It's hardly a new concept; several companies have offered similar products, but none have gained much success. Schadler thinks that Apple is the company to make a go of it.

``When Apple gets into a market," he said, ``they do it right. It looks like they've got the pieces put together pretty nicely here."

But iTV won't be available until next year. ``They're not going to have it for the critical fourth quarter," said Rob Enderle, principal analyst at the Enderle Group at San Jose, Calif. Enderle also warned that the market for iPods may be approaching the saturation point, and said new models released yesterday will do little to bolster sales. ``They needed a way to really drive people back," Enderle said. ``This isn't going to do it."

Jobs kicked off the Apple press event in San Francisco by unveiling new models of the company's iPod music players. The new full-sized iPods will have brighter screens for viewing movies and TV shows, and batteries that are designed to last for more than six hours of video viewing or 20 hours of music listening. Apple will offer a 30-gigabyte model for $249 and an 80-gigabyte version for $349. The new iPods are available now at Apple retail stores and at the company's Internet site.

Apple also updated the hugely successful iPod Nano, an extremely thin player that uses flash memory chips to store music instead of a bulky hard drive. Nano users have often complained that the device is easily scratched. But the new version, which went on sale yesterday, will feature a tougher aluminum case. It will be available in multiple colors, as well as the traditional black. Apple will sell three versions with different amounts of memory on board, priced at $149, $199, and $249.

The low-end iPod Shuffle player also got an update. The new version, due to go on sale in October, is the size and shape of a book of matches and can be clipped to a pocket or belt loop. The Shuffle has 1 gigabyte of memory, enough to hold about 240 songs, and will sell for $79.

Apple's venerable iTunes software has been overhauled to enable online movie sales. The new version allows for video downloads at near-DVD quality, and it allows users to keep track of their music collection by flipping through a display of CD cover art. The new iTunes also lets users buy videogames that can be played on iPods. Apple is offering popular games like Bejeweled and Pac-Man, at $4.99 each. The software is available free for Apple's Macintosh computers and for PCs running Microsoft Corp.'s Windows operating systems.

Apple stock rose 34 cents to $72.84 on the Nasdaq yesterday.

Hiawatha Bray can be reached at bray@globe.com.