Apple may soon launch a service that allows users to download feature-length films, boosting its presence in the digital home, analysts said on Tuesday.
Apple on Tuesday sent out e-mail invitations for a "special event" on September 12 in San Francisco. The invitation features the Apple logo and the phrase "It's Showtime" against a backdrop of Hollywood-style opening-night spotlights.
"They've done really well in music, they've done well in music videos and they've done well in TV shows, so logically movies are the next area of focus," said Shaw Wu, an analyst at American Technology Research who has a "buy" rating on the stock. "It's a first kind of bigger step in the direction of movie content."
Wu and UBS analyst Ben Reitzes, who also has a "buy" rating on the stock, both said they expect Apple to unveil a movie download service at next week's event.
Wu does not own Apple stock and his firm does not provide investment banking advice to Apple, according to American Technology disclosures. UBS has been an investment banker for Apple and Reitzes or a member of his team or family holds the stock, according to a UBS disclosure.
Apple, maker of the popular iPod music player, already has more than 70 percent of the digital music player market in the United States alone. Its iTunes Music Store digital music library on the Internet has about 3 million songs available for download at 99 cents a piece, and Apple last year started selling downloadable television shows for $1.99 each, also on iTunes.
Apple also may unveil new versions of its iPod nano music player and Macintosh computers with faster processors made by Intel, UBS's Reitzes wrote in a research note on Tuesday.
"We believe the event will highlight our view that Apple is establishing itself as the leader in the digital home entertainment market," Reitzes wrote.
Videos downloaded from the iTunes Music Store can be played back on a personal computer or an iPod music player. About 200 television shows have been made available through iTunes since Apple introduced its video iPod last year.
A movie service, if announced, may let users stream films wirelessly from their computers to home theaters much as Apple's existing AirPort Express base station allows users to stream downloaded music to home stereo equipment, AppleInsider, an online forum, said in report on Monday.
AppleInsider, which like Wu and Reitzes said it believes Apple will unveil a movie downloading service at next week's event, didn't disclose the source of its information.
Movies would probably be downloaded to a device similar to the AirPort Express, AppleInsider said.