UPDATE: Apple To Sell Movie Downloads, Plans 'iTV' Device

At a press event in San Francisco, Apple CEO Steve Jobs introduced the online movie service as part of the rollout of iTunes 7, a new version of its digital music/video jukebox software. The Cupertino, Calif., company also unveiled three new versions of its iPod portable music player.

The iTunes Store, which already sells TV shows and podcasts along with music, will offer more than 75 movies from Walt Disney Pictures, Pixar, Touchstone Pictures and Miramax Films, Apple said. The store also will now sell video games for fifth-generation iPods, including popular titles such as Tetris and Pac-Man.

New-release feature films will cost $14.99 each, and other full-length movies will cost $9.99 apiece, Apple said. TV shows are priced at $1.99 per episode, music videos and short films at $1.99 each, and games at $4.99 each.

Customers can buy and download the movies to watch on their computers, iPods and, starting early next year, on TVs.

Giving what he called an atypical-for-Apple "sneak peek," Jobs demonstrated the sleek iTV device, which will enable users to wirelessly stream movies, music, photos, podcasts and TV programs to big-screen TVs, set-top boxes and home entertainment systems. It features a built-in power supply, 802.11 wireless networking, a USB 2.0 port, an Ethernet jack, an HDMI connector, a component video jack, analog and optical audio connectors, and a remote control. It works with iTunes on Macs and PCs.

"We think it completes the picture," Jobs said, referring to the ability of iTunes to serve as a digital media hub for Macs and PCs, iPods, home entertainment devices and online content.

Apple aims to ship the device -- which still doesn't have a final product name -- in first-quarter 2007 at a price of $299, Jobs said.

With iTunes 7, all videos downloaded from the iTunes Store are near-DVD quality, with a resolution of 640 x 480 (up to 480, depending on the aspect ratio), or four times higher than before, according to Apple.

The iTunes Store currently sells more than 1 million videos per week, Apple said. It started carrying TV shows in October 2005 and now offers more than 220 TV program titles from 40-plus networks. On the music side, the store has more than 3.5 million songs and has sold a total of 1.5 billion songs.

In addition, Apple took the wraps off new versions of the iPod, iPod nano and iPod shuffle.

The new iPod features a brighter, richer 2.5-inch color display, among other new features, and comes in 30-Gbyte and now 80-Gbyte models, Apple said. The 30-Gbyte version costs $249, and the 80-Gbyte unit, which can hold up to 20,000 songs or 100 hours of video, runs $349.

Apple said the new iPod nano sports a new aluminum body, 24-hour battery life and more than twice the music capacity of the previous version. It comes in a 2-Gbyte model for $149, a 4-Gbyte model for $199 and now an 8-gbyte model for $249 (US). Also, the latest iPod shuffle is now roughly half the size of the original and features a new aluminum design and a built-in clip, the company said. Priced at $79, it has 1 Gbyte of flash memory and can hold up to 240 songs.

The new iPod and iPod nano models are available now, and the new iPod shuffle is slated to ship in October, according to Apple. iTunes 7 is available now as a free download for Macintosh and Windows platforms.

*Updated Sept. 13 with more information on iTV device.