Apple Inc. (AAPL) is expected to unveil a new line up of iPod portable music players for the holiday period when it will hold a special media event in San Francisco on Sept 9. Apple declined to name the products.
 
It is widely believed that Apple will use the event to announce major updates to the iPod Touch, the classic iPod and the iPod Nano. The upgrades could include adding a digital camera to the devices, while the iPod Touch could also be augmented with a video camera. No updates to iPod Shuffle are expected.
 
Apple is also expected to provide an update to the iTunes media management software at the event. Rumor has it that Steve Jobs may appear for the first time at the event after he returned to Apple from his temporary leave of absence.
 
Apple’s resurgence has been driven by the tremendous success of its iPod portable music and video players and iTunes online store. Apple unveiled the iPod nano in 2005, which was followed by the launch of iPod Touch in 2007. Apple’s iPod remains popular, as evident from the 6% increase in unit shipments to 54.8 million in fiscal 2008 compared to 2007.
 
However, growth in the digital music player market may slow down as the core market becomes saturated. Apple suffered declining year-over-year sales of its iPods in the first nine months of 2009 as demand fell due to global recession. The company could sell only 44.1 million iPods during the first nine months of 2009. iPod revenues were down 13.0%.
 
Apple faces significant competition from Palm (PALM), Nokia (NOK), Motorola (MOT) and Research in Motion (RIMM) in all areas of its business.
 
To revamp the slowing demand, updates to the company’s iPod line will be a major driver. We expect a growth in more advanced iPod Touch units in the next few quarters. We believe the event will be quite important as Apple’s new product launches will be a thing to watch out for.
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