What will Apple come up with next?

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SAN FRANCISCO -- Now that the Consumer Electronics Show has packed up and left Las Vegas, attention is shifting to this week's Macworld Expo in San Francisco and Apple Inc. CEO Steve Jobs' keynote speech on Tuesday morning.The notoriously secretive technology company has kept a tight lid on rumors, but that hasn't stopped the rampant speculation about its anticipated new products and services.This time last year, Apple introduced the iPhone, a move that reinforced Apple's role as a digital lifestyle trendsetter and still reverberates in the consumer electronics industry. The company's stock climbed furiously through 2007, tipping over $200 per share in late December -- though, like the rest of the technology industry, it has dropped in early January. Now the question for Jobs is: What's Apple going to do for an encore?"What everyone wants from Steve is, 'What's next?'" said Creative Strategies' principal analyst Tim Bajarin. "You don't have to create a new blockbuster every year. What you have to do is make it better. ... They're looking for Apple to keep the record going."Reports leading up to the conference suggest that Apple will introduce an online movie rental service on iTunes, to complement its current download-to-own offering. Warner Bros., 20th Century Fox and Walt Disney are among the Hollywood studios that are believed to have signed deals with Apple. Rival online movie services such as Amazon's Unbox already offer rentals. Consumers download the film and have a certain amount of time to watch it. Once that period is up, the movie is deleted from the viewer's playlist. One report suggested that Apple could charge $2 to $5 per 24-hour-rental. Though Apple's iTunes model always has been to sell downloads of music, television shows and films for consumers to own, a movie rental service in this case makes sense, said Ross Rubin, an analyst with NPD. That's because consumers are already used to renting movies through services such as Netflix and Blockbuster. It also would encourage its audience to watch more films. "They might have an interest in other movies that they don't want to purchase," Rubin said. A Financial Times report also said that Apple could team up with the studios to allow their DVDs to be copied into a person's iTunes library. Currently, DVDs cannot be transferred onto personal computers because of copyright protection software, although there are programs that let consumers get around it. James McQuivey, an analyst with Forrester Research, said Apple could go even further in reshaping its online video service. It could offer not just movie rentals, but also commercial and ad-supported videos, just like television."If we allow rental, then why not ad-supported video?" McQuivey said. "It could put Apple right back in the driver's seat in shaping the future of online video."Some analysts also expect Apple to update its Apple TV, a set-top box that beams the music, photos and videos in a person's iTunes library to the television. Jobs introduced the Apple TV last year because he felt that consumers would prefer to watch their television shows and movies on their flat-screen televisions, not on their computers. Though there are no published reports on Apple TV sales, the consensus has been that it has not been popular among consumers, particularly in comparison with Apple's other products. It also isn't clear if Jobs will update consumers on his progress in securing deals to sell music without copyright protection, which would allow consumers to purchase songs on iTunes but play them on non-iPod MP3 players. Jobs has led the push for record labels to drop copyright protection restrictions on online music and last year struck a deal to do so with EMI. Since then, however, other record labels such as the Warner Music Group have partnered with Amazon's online music service to sell copyright-protection-free music. Meanwhile, building on the advances made from its iPhone and iPod, some analysts speculate that Apple could introduce a small, ultra-mobile laptop or mobile device. Shaw Wu, an analyst with American Technology Research, called it the "Mac mini" or the "Mac slim," a smaller laptop that uses flash technology instead of a traditional hard drive to store data. Rubin suggested it could be a premium 12-inch MacBook in the $1,500-range or a less expensive, 7- to 10-inch mobile device in the $700 to $1,000 range. (Distributed by Scripps Howard News Service, www.scrippsnews.com.)