Sources reveal Apple to launch new product, talks of iPhone upgrade

SAN FRANCISCO – Apple Inc. is facing the culmination of months of rumors and speculation when it takes the stage in San Francisco next week to lift the wraps on what the company calls its “latest creation,” widely expected to be a touch-screen tablet device.

Chief Executive Steve Jobs is expected to make one of his rare public appearances Jan. 27 in downtown San Francisco to introduce the “creation.”

As usual for the highly secretive company, no further details were given. But months of leaks from sources close to the company and through the supply chain have pointed to a tablet – possibly dubbed either the iSlate or iTablet.

The device is expected to be similar in appearance to a large-screen version of the company’s iPhone. Such a device would offer the always-on connectivity of a cell phone while also offering a more usable format for media files such as books, music and video.

Shaw Wu, who covers Apple for Kaufman Brothers, said that checks with supply-chain sources suggest the new gadget will be a hybrid device that falls between an iPod touch, an iPhone and Mac.

“From our understanding, it’s not intended to replace a Mac, but to be somewhat of a ‘super’ iPod touch,” Wu wrote in a research note. “Video, gaming, Web browsing, e-books and the ability to run multiple apps would be enhanced with a much larger screen.”

Previous leaks to the media have varied widely in terms of specifications and price. Analysts expect the device be less than the $1,000 range, though a subsidy deal with a wireless carrier could push that price even lower.

In addition to the tablet, another potential new offering at the event could be a major update to the iPhone’s software.

On Tuesday, the gadget blog Boy Genius Report posted alleged screen shots of the new software upgrade called iPhone 4.0. The upgrade reportedly will support expanded multi-touch features, upgrades to the user interface to make navigation easier and the potential to run applications in the background – also called multitasking. Another speculation is a video-subscription service.

If a tablet is announced at the event, there may also be an accompanying shift in the company’s iTunes store to add content such as books, newspapers and magazines.
Apple reportedly has been in talks with newspaper and book publishers for content to feed the device. That could also position the device as a rival to the growing market of e-readers – including the popular Kindle from Amazon.com Inc.

“We see major newspapers, magazines, books and other print media being integrated into a new iTunes store,” wrote Peter Misek of Canaccord Adams. “We see the iSlate as a direct competitor to the e-readers, attempting to make them obsolete.”