The future for iPod is as an internet-connected handheld media-savvy computer.

Apple's future strategy to maintain its hold on the portable media player market is beginning to emerge in the form of analyst speculation.

The company took some good news on its stock price yesterday, when Piper Jaffray analyst Gene Munster elected to maintain his 'buy' rating and $250 target price on the stock.


Munster believes the company is in position to transform the portable music market into a portable computing market.

Acknowledging that growth in sales of personal media players such as the iPod is beginning to slow, Munster speculates that Apple will introduce cheaper iPods with WiFi access and multi-touch technology, essentially expanding the iPod touch family.

"We believe that the iPod touch is the first of several internet-connected iPods that Apple is currently developing,' Munster said in a research note as reported by CNN. These devices will include email and web browser applications, the report claims.

AppleInsider adds speculation on the part of Munster that Apple will enable iPods in such a way that users will be able to use them to order food or drink from coffee shops while on the way to that shop, paying for the items through the iTunes store.

Munster also speculates Apple may introduce new ways to wirelessly stream music, a notion that was also ruminated upon by U2 manager Paul McGuinness at Midem this week.

"Personally I expect that Apple will before too long reveal a wireless iPod that connects to an iTunes "all of the music, wherever you are" subscription service. I would like it to succeed, if the content is fairly paid for. "Access" is what people will be paying for in the future, not the "ownership" of digital copies of pieces of music," McGuiness said.

The confluence of rumour combined with Apple's 2007 introduction of the iPhone and the iPod touch suggest the company has been stealthily putting together the building blocks for its long term strategy to maintain momentum in the iPod market, despite growing competition.

While many competitors are still attempting to catch up on the iPod or iPhone in terms of usability, Apple seems set to respond with added use and versatility.

And it's not taking any of these strategic moves lightly. "Apple knowingly gave up as many as 1.5 million iPhone sales during the holiday quarter to establish the future of the iPod as a mobile device," reports Apple Insider in repetition of statements recently uttered by Needham & Co. analyst, Charles Wolf.

Wolf argues that the more affordable iPod touch may be securing sales at the expense of the iPhone. Wolf also notes comments made this month by Apple chief operating officer, Tim Cook, who stressed the company's aim is to turn the iPod touch into a "mainstream WiFi mobile platform."

"If the company is successful in this endeavor, it would provide a compelling upgrade path for the estimated 85 million people who already own iPods," Wolf says.

The analyst expects a 3G iPhone in summer and anticipates summer price reductions in existing iPhone models.