GADGETS

Friday, January 06, 2006

NEW GADGETS EXPAND IPOD ECONOMY

The soaring iPod economy is expanding to video with the first wave of new gadgets aimed at consumers eager to watch their favorite television shows and movies on the portable devices.

A raft of companies offering accessories such as leather carrying cases and speakers have already struck gold in a lucrative secondary market dependent on Apple Computer Inc.'s (AAPL.O: Quote, Profile, Research) ubiquitous iPods.

Now many see video fueling the next boom for a mushrooming market some analysts are pegging at a $1 billion, where start-up and well-established companies are in a race to find the next can't-miss, add-on item for the portable devices.

"There is absolutely no question video is the next big accessory category," said Jeremy Horwitz, editor-in-chief of iLounge, an independent online magazine devoted to the iPod and iTunes. "2006 is when companies are going to bring their new stuff to the table."

At least 30 million iPods have been sold since late 2001, giving Apple about 75 percent of the U.S. market for portable music players, and spawning an iPod economy driven by consumers who typically spend about half the price of the actual device on accessories, said Richard Doherty, research director at Envisioneering Group.

Designer cases, adapters for listening to the iPod in the car, audio recording plug-ins and protective shells are just a few products that boost the features and functions of the devices.

And following Apple's recent jump into video, analysts say consumers will start seeing an increasing number of accessories that cater to the iPod faithful who want to watch content using their machines.

One of the first of these new products comes from a California company started by former Apple executives who have found a way to turn most iPods into portable video recorders.

The iSee 360i allows users to slip their iPods into a slightly bigger box, which contains a 3.6-inch screen, and download video directly from computers, televisions, satellite, or any other analog source.

Advanced Technology Office introduced the iSee -- its first product -- this week at the Consumer Electronics Show in Las Vegas, where analysts say video is the next big trend in the iPod accessory market.

John Scott, the company's chief executive officer, said the iSee has a larger screen than Apple's own device, provides a longer-lasting battery and offers better resolution when connecting the machine to a television.

The iSee is expected to hit retailers' shelves early this year and sell for $249.

"The reason we went after this is that the iPod is a very well defined vertical market with about 35- to 40 million people who have MP3 players they really love," Scott said. "We tried to figure out how to add video around the iPod so you can carry it as one unit."

Some of the other new products introduced at the Consumer Electronics Show include Rochester, New York-based Icuiti's DV920 video eyewear headset that sells for $549 and displays video in front of both eyes.

EMagin's Eyebud allows users to watch movies from a tiny screen that sits in front of one eye. Eyebud models will be available later this year at introductory prices of $799 and $599, the company said.

The latest accessories came after Apple in October introduced its eagerly-awaited video iPod and unveiled a deal with Walt Disney Co. (DIS.N: Quote, Profile, Research) to sell television shows like "Desperate Housewives."

And while the stream of video-related products might just be a trickle at the moment, some in the technology industry are predicting that a slew of gadgets will soon hit the market.

"Thirty million iPod owners. That is what intrigued us," said Dave Pederson, a vice president at Zoran Corp., which makes the chips used in the iSee video player.

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