Video iPod: From rumour to reality?

With Apple confirming it will expand its product line on 12 October, could the Cupertino firm really be lining up an iPod capable of playing videos?

Second-guessing Apple's product launches has long been a favourite sport of the Mac faithful, and theories over the company's next baby turning out to be a video iPod are gaining legs fast.

While Apple's launch invite to journalists gives very little away - the words 'One more thing...' appear over a red stage curtain - its location has already set tongues wagging. The UK launch event will take place in BBC Television centre, while the US occasion is scheduled for the California Theatre in San Jose.

The rumour mill was first fed by record execs, who claimed they had been briefed on a video iPod, while iTunes gained video capabilities some months ago.

Bloggers have also claimed to have found 'buy video' and 'add video' images in iTunes' image resources.

The fire of iPod discussion was further stoked by news today from Cupertino-watching website Apple Insider, which reports "reliable sources" have seen the video iPod, which they believe could be on sale from "as early as next week".

The new iPod, according to Apple Insider, will be reminiscent of the 60GB iPod photo but thinner, with an iPod Nano-esque small click wheel. The smaller click wheel makes room for a larger display.

The launch will also coincide with a major overhaul of iTunes which will see the addition of a large catalogue of music videos and other short video clips, the site reports.

As recently as last month, Apple CEO Steve Jobs has been discouraging the rumours, telling press at Apple Expo: "Whether people want to buy a device just to watch video is not clear - so far the answer's been no. Devices that do video... have not been successful yet. No-one's figured out the right formula."

Of course, there's no denial there.

Simon Dyson, analyst at Informa Telecoms and Media, said the move into video seems a likely one. He said: "Apple have said they wouldn't launch a video iPod because the content isn't there for it - the audio iPod didn't really take off until iTunes came out. If Apple launched a video download service that argument that there isn't any content goes away."

Dyson added that a video iPod would shake up the existing market for portable media devices.

"I think take-up will be slower," he said, "But it needs someone to come out with [a popular device] for it to take off. I can't think of a better company to do that than Apple."