Steve Jobs' annual address unveiled movie downloads and the ultra-slim Mac Air, but nothing to match last year's iPhone, writes Karlin Lillington
Such is the current broad media entertainment power of the company formerly known as Apple Computer that an announcement on Tuesday that it has launched a movie downloads service forced a fall in share value of US movie rental stalwarts Netflix (down 5.4 per cent) and Blockbuster (down almost 17 per cent).
On the other hand, shares from Apple Inc (as it is now known, in recognition of the fact that it isn't just a computer company) also slid on Tuesday following the always much-anticipated keynote speech by Apple chief executive Steve Jobs at the annual MacWorld conference in San Francisco.
Investors seemed lukewarm on the big announcement of the "Stevenote" (as his opening State of Apple talk is termed by Mac enthusiasts) - a lean, green laptop called the Mac Air, a 3lb, 3/4in-thick machine made partly of recyclable materials.
Many observers rated the talk a medium-strength Stevenote - failing to reach the hype-osphere of last year's speech, when Apple announced its much anticipated iPhone and floored just about everyone with its unexpectedly clever and functional design.
Nonetheless, the range of announcements seemed to satisfy attendees and the Air is a typically gasp-inducing piece of Apple technology-meets-art - so slim that Jobs unveiled it by pulling it out of a brown office envelope.
One analyst, Aleksandra Bosnjak at StrategyEye Digital Media, dubbed the Air a "size-zero catwalk computer", noting Apple and Sony will now be going head to head in the ultra-slim space and predicting "fierce rivalry" ahead between these two leading design-focused computer makers.
The Air is so slim that it has had to abandon an optical (CD/DVD) drive - a controversial move by Jobs, and reminiscent of his trend-setting decision to drop disk-drives from all Macs years ago. Though widely criticised at the time, Jobs proved right in his prediction that people were abandoning disks for CDs and wouldn't care about having a disk drive.
Now, he seems to be predicting a similar move away from DVDs and CDs towards downloads and online storage, or at least a multi-computer home where the Air can use a special bit of Apple software to access optical drives on another PC or Mac.
Conveniently, Jobs also announced a router/storage device called Time Capsule to enable PC or Mac users to store their things on its independent drive and access them wirelessly. With one of the options being a whopping teraflop of storage space - an amount that only major companies might have had use for a decade ago - Apple is definitely signalling it thinks people will use computers to access data largely held elsewhere, and will need large digital vaults for backing up their digital lifestyle documents, movies, music and photos.
Other product announcements included version two of Apple TV, a device which is now able to download movies directly, rather than needing to go through a PC. Several analysts considered this to be a major breakthrough for what was an intriguing but initially clumsy offering.
Despite uneasiness among movie rental company investors, some analysts noted they felt Apple's iTunes Movie Rentals (initially only available in the US, but going internationally during the year, said Jobs) wouldn't dent companies like Blockbuster and Netflix because downloads will probably most interest those who wish to load films on to a portable device like an iPod.
A Netflix spokesman told Associated Press: "Apple and Netflix are taking two different approaches . . . to getting people watching movies on the internet. But it's still a DVD world, and it will be for a long time."
However, music studios said the same thing about music CDs until iTunes proved people were willing to pay for music downloads and increasingly wanted to manage music collections on computers, not buy CDs.
And just as the music companies had largely failed in the online market when they tried to establish a range of download services themselves, pre-iTunes, so several of the DVD services also have movie download divisions (Watch Instantly at Netflix, Movielink at Blockbuster) that haven't ignited consumer interest though they have considerably larger libraries of films than Apple.
AppleTV and other set-top box devices directly linked to the internet through high speed broadband connections may well give movie downloads a faster foothold in the market than some will concede.
But cable and satellite companies - which already have the set-top boxes - have done little in this potentially lucrative area.
Jobs acknowledged the market - merging internet and TV - is new and tricky, hence AppleTV's initial failure.
"We've all missed. No one has succeeded yet. We learned that what people really wanted was about movies, movies, movies. And we weren't delivering that. So we're back."
Tom Lesinski, president of Paramount Pictures Digital Entertainment, told the New York Times that Apple's movie service may well be the breakthrough that gets movie downloads on to TVs: "All the barriers that have existed with other solutions pretty much go away now."
Jobs' speech also revealed that Apple continues to see healthy growth with its iPhone. Sales have hit the four million mark, he said - 20,000 sales a day around the world. But Apple has still not said when the device will be available in Ireland.
Many analysts feel, once the dust settles post-MacWorld, consumers and investors will see a range of product and software announcements that confirm the company remains a major innovator and player in both entertainment, electronics and computing markets.
"Even in a year where there were no tsunamis coming out of Macworld, the company showed that it can still make waves," Jupiter Research analyst Michael Gartenberg told BusinessWeek.
