The much-anticipated video-capable iPod was one of three new products unveiled by the US tech giant, which also sealed a content deal with entertainment behemoth Walt Disney Co to allow fans to watch their favourite programmes such as Desperate Housewives and Lost while on the go.

Apple founder and chief executive Steve Jobs on Wednesday unveiled the video iPod, a new iMac G5 computer with a built-in video camera, and an updated version of Apple's iTunes online music store that allows users to download music videos and TV shows as well as songs.

The high-tech update of the company's famed iPod crams more storage and a bigger screen into a thinner package and will hit store shelves in the US next week, Jobs said.

"It's a stunner and yes, it does video," Jobs said at a glittering launch celebration in the California town of San Jose, as the company moved to boost sales and shore up its portable music player marketshare.

More storage

The new gadget, which boasts a 6.35cm colour screen, is 30% thinner and has 50% more storage than its predecessor.

It can store up to 15,000 songs, 25,000 photos or over 150 hours of video and is available in a 30 gigabyte model with a 14-hour battery for $299 and in 60 gigabytes with a 20-hour battery for $399.

"Because millions of people around the world will buy this new iPod to play music, it will quickly become the most popular portable video player in history," Jobs said.

The new gadget can store up to
150 hours of video

Apple also announced the next generation of its online music store - iTunes 6 - that will allow fans to download and buy 2000 music videos and six short films from Pixar Animation Studios for $1.99 each.
 
While full-length films will not be available to download on the new iPods, 2000 music videos, six Pixar Animation short animated films and five Disney-owned television shows will be.

"We are really excited by the intersection between great content and great technology," Disney chief executive Robert Iger said at a characteristically theatrical event attended by jazz trumpeter Wynton Marsalis.

Portable video jumpstart

Every episode of ABC television's Desperate House Wives, Lost and Night Stalker will be available online the day after they air in America under what Jobs called a "landmark deal" with ABC's parent Disney.

The Disney Channel shows "That's so Raven" and "Suite Life of Zack and Cody" will also be downloadable.

Analyst Stephen Baker of NPD Techworld said the video-capable iPod would jumpstart the portable video player market. "This will put video capable products in people's hands," he said.

Apple also revealed the next generation of its iMac computer, the G5, which has a host of new features, including a built-in iSight video camera for video conferencing and its brand new Front Row media system, Jobs said.

Some Disney Channel shows will
also be downloadable

Front Row features a sleek six-button remote control that effectively turns a computer into a home entertainment system, allowing a user to activate content from iMacs, including iTunes songs, photo albums, videos, Podcasts and DVDs, from up to 6.6 metres away.

"We are going to make a great computer even better," Jobs said of the G5 that will also be on sale in US stores for $1,299 or $1,699  - depending on the model - next week. "The new iMac is far more beautiful and thinner."

Apple has already sold 28 million iPods since 2001 and has a 75% share of the market.

Profits quadrupling

For months, industry watchers have been looking for the firm to roll out an iPod that can play videos and music, as firms such as Sony Corp begin encroaching on Apple's dominance of the portable music-player market.

On Tuesday, Apple announced record fourth-quarter profits with income quadrupling.

But the company's stock fell 11.13% or 5.74 per share after Apple announced record iPod sales of 6.5 million in the quarter to 24 September, a figure that did not meet some analysts' expectations.

Analysts had predicted that sales of iPod digital music players would reach up to eight million for the quarter.

"Apple has a pretty high bar to jump over," remarked Baker, as Apple shares dropped $2.34 or 4.5% to close at 49.25 on Wednesday in New York.