Apple saved the music business with the iPod. Can they do the same for Hollywood?

In the five years since the iPod’s rollout, Apple has locked down the online music business. 1 in 5 Americans owns or has owned an iPod and consumers have downloaded more than 1 billion songs from Apple’s iTunes music store. Riding on the heels of that success, yesterday, Apple founder Steve Jobs fired his first shots in the battle to revolutionize the movie industry. In a special event called “It’s Showtime,” Apple unloaded new gadgets like it was Christmas morning.

In this single event, Steve Jobs announced the following new products and preannounced a new wireless video router called the iTV:

  • new versions of both iTunes 7 and QuickTime 7.1.3
  • bigger Video iPods including an 80GB iPod
  • new multi-colored iPod Nanos that go up to 8 GB and don’t scratch
  • a matchbook-sized iPod shuffle

The new version of iTunes (iTunes 7) sells more than just music and TV shows. iTunes now sells movies and games. The movies are priced starting at $9.99 and include new releases such as Pirates of the Caribbean: The Curse of the Black Pearl, as well as older classics. If you were disappointed at the quality of some of the iTunes videos you’ve downloaded in the past, then you will be happy to know that the video quality has also gotten an upgrade. Any movie you buy is at “near” DVD-quality, 640-by-480-pixel video, and in Dolby Surround sound.

WARNING: While I was writing this blog post, 4 readers reported that iTunes 7 erased their iPod. So you might want to wait and backup your iPod before you upgrade to iTunes 7.

When you’re not watching movies on your iPod, you can always check out some of the new games Apple is selling in iTunes 7. Each game is in full color and uses the Click Wheel as a controller. The selection of games include addictive classics from Tetris and PAC-MAN to a few newer games like Vortex and Texas Hold’Em.

Games, movies and new iPods are nice, but what is going on with the iTV? In a major break in Apple tradition, Steve Jobs only preannounced a new wireless router product called iTV (screenshots). Apple usually likes to have products ready to buy the day they announce them, so this preannouncement caught everyone off guard. According to CBS MarketWatch, the iTV can attach to a television and wirelessly receive and play digital content from any computer (Mac or PC) running iTunes software. The iTV will also feature a HDMI port for high-definition digital televisions. You can expect to see the iTV sometime during the first quarter of 2007 for around US$299.