Apple to offer movies on iTunes music store

About 75 motion pictures are now available for full downloads on iTunes.

SAN FRANCISCO - Apple Computers said today it will begin selling movie downloads from Walt Disney's film studios, aiming to turn its iTunes online music store into a one-stop shop for digital entertainment.

Chief Executive Steve Jobs also said Apple planned to ship a device in the first quarter of 2007 to let consumers stream movies, music, photos, podcasts and television shows to their home entertainment systems. Code-named iTV, it will cost US$299 ($472).

Jobs said iTV and other new products will put Apple squarely in homes, cars and consumer pockets as it looks to stamp its mark on all aspects of the digital lifestyle.

"I hope this gives you a little bit of an idea of where we are going," Jobs said at an event in San Francisco, where he also unveiled new versions of the popular iPod media player.

Apple's eagerly anticipated movie service will sell new releases from the Disney, Pixar, Touchstone and Miramax studios for US$12.99 if pre-ordered or bought during the first week available. Normally, new releases will cost US$14.99 and other feature-length films will cost US$9.99.

Jobs said about 75 films are now available on iTunes, and that they take about 30 minutes each to download for users with high-speed internet connections. Consumers can view the movies on their iPods and computers, and eventually on televisions with the upcoming iTV player.

"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," Jobs said. "iTunes is selling over 1 million videos a week, and we hope to match that with movies in less than a year."

Jobs, a Disney director and one of the company's largest individual shareholders, also introduced new versions of the iPod with brighter screens and longer battery life as Apple looks to expand its dominant position in digital music.

Analysts have said it was only a matter of time before Apple started selling full-length movie downloads via iTunes, which has already sold 1.5 billion songs and more than 45 million TV shows.

If Apple's efforts are ultimately successful, the company could solve the entertainment industry's current dilemma: how to bridge the gap between the living room TV and the computer.

If Apple can do that, analysts have said, they can see the potential for another round of robust growth at a time when the company is facing a growing contingent of competitors in the digital music market, including from Microsoft Corp.

There are already competitors in the nascent movie download market, including CinemaNow, Movielink and Amazon.com Inc..

Other new devices unveiled on Tuesday include an iPod with the most capacity to date -- an 80 gigabyte player that would cost $349. Apple said new versions of the popular digital music players would sport video games such as Pac-Man and Tetris.

The company also introduced a thinner iPod Nano available in five colors with 24 hours' battery life. The new Nanos will sell for US$149, US$199 and US$249.

Apple introduced a 1 gigabyte Shuffle that holds up to 240 songs and is nearly half the size of the original version. It will sell for US$79.

Apple shares ended up 0.18 per cent at US$72.63 on Nasdaq.

- REUTERS