Apple is reported to be in discussions with Disney in order to license the latter firm's content for a video iPod, a report claims.

Rumours of Apple's plans continue to emerge. The Wall Street Journal this week claimed Apple is also in discussions with music industry representatives in order to arrange rights to sell music videos through iTunes.

That report also claimed Apple to be in talks with "a number of media companies" in order to provide TV shows through its anticipated service, which may launch in the US as soon as September.

Jobs plots course with Disney

Today, Business 2.0 claims Apple CEO Steve Jobs is in discussion with Disney's new CEO Bob Iger to license content, and predicts: "If the past is any measure of what's to come, Jobs will enter the arena late (as he did with the iPod) only to leapfrog over the competition with some entirely different device."

A report on Cnet lends weight to the rumours, detailing the clues buried within Apple's existing products, such as existing support for video within iTunes, system-wide support for the scalable H.264 video format, and Apple's move to add colour screens to iPods (though not iPod minis).

H.264, Apple's secret weapon

In tandem with QuickTime 7, the H.264 video codec may emerge as critical to providing such a service. The Age speculates that using H.264 would let a 60GB iPod hold 240 hours of standard definition or 60 hours of high-definition video.

"A 4GB iPod mini would hold ten broadcast-quality feature length films and even a 512MB iPod shuffle could conceivably host a single film," it states.

Apple's video creation and editing products (Final Cut Pro and Studio, for example) also mean the company can easily furnish broadcasters and others with simple solutions to make their content available through iTunes, should they choose to do so.

Intel and the Hollywood connection

The Cnet report suggests the significance of such a strategy, observing Apple's future processor supplier Intel's deepening relationship with movie companies. Apple could produce a home media server, it says, pointing to the Mac mini as a potential element to such plans.

Wired last month claimed that Apple's move to Intel was driven by its need to offer movie companies a level of digital rights management they have confidence in.

"Apple - or rather, Hollywood - wants the Pentium D to secure an online movie store (iFlicks if you will), that will allow consumers to buy or rent new movies on demand, over the Internet," Wired wrote.

Star Wars director George Lucas told US news channel CNBC last month: "The (movie) business is going to go down, down, down before they finally realize what Steve Jobs and a few others have already realized--that there is a way to make a business model out of this and then people won't steal it quite so readily."

Infrastructure building

In April 2004, Jobs stressed Apple's focus on making the iPod a best-of-breed music player, describing music listening as a "background activity", while watching video he characterised as a "foreground activity".

In January 2005, Apple's director of worldwide iPod marketing Stan Ng dismissed the conceit of a video-capable iPod, citing the dearth of available legal content for such a product.

"There is no legal way today of taking a DVD and making it viewable on a portable device. There are issues with video, and no infrastructure for acquiring that content." he said.

All recent reports suggest Apple to be working to create an infrastructure for video content acquisition.

Apple's new processor partner, Intel, is also directly involved in helping create such an infrastructure. Intel has invested in a "premium movie download service" called ClickStar. The company: "Is focused on bringing top Hollywood movies directly to consumers over the broadband Internet."

The inevitability of gradualness

Inside Digital Media analyst Phil Leigh believes Apple's move to deliver a video iPod is "inevitable".

Echoing earlier comments from Jobs, Leigh states that a video iPod will be of limited use if users can only watch programming on its tiny screen. He also observes that similar Windows-driven products introduced this year have, "stimulated little lasting interest".

He believes Apple should develop a portable solution, such as glasses equipped with miniature video screens, or a dedicated video jack on the product to help make such a product more user friendly.

This part already exists: Apple sells an "Apple iPod AV cable", which lets users display iPod-stored photographs on a conventional TV set.

Leigh observes another opportunity for the company, should it make such a move: "A video iPod that could record conventional television programs would essentially be a portable TiVo, and that is quite thought-provoking," he writes.

The need to watch video content held on an iPod on larger screens has been recognised as critical by UK sociologist and so-called "iPod professor", Michael Bull.

He warns that even though consumers are more tech-savvy, this: "Doesn't mean they're going to want to watch crappy TV shows, whilst they move, on a one-inch screen."

Microsoft ready to battle

Apple faces opposition as it moves swiftly to prepare the infrastructure to ensure the ready availability of content that will be required to make a video iPod succesful.

Microsoft chairman Bill Gates has revealed his company to be working hard to build bridges with the movie industry.

"We'll see a broader range of movies available for both rental and ownership" via the Internet, he told the LA Times.

With Apple's apparent victory in dominating the market for digital music downloads, Microsoft is preparing to battle for the video download market, Gates said.

"We're really having to work more closely with partners in the hardware industry and content industry, to really think through the whole end-to-end experience and make it better. That's where we've done our mea culpa. We are fixing that," he said.