iPod won't always be the best digital-music player, an analyst has warned Apple.

Jupiter Media analyst Michael Gartenberg told the Financial Times: "Sooner or later someone else will figure out music as well as Apple. Then the iPod will become one among many. "

The FT suggests that for Apple "the pressure to innovate is mounting" because Mac sales have stagnated. "Against this background, digital entertainment appears to represent Apple's best long-term growth prospects, instead of PC sales. Investors certainly think so: Apple shares shot up 124 per cent to $31.08 in the 14 months after it launched iTunes and an upgraded version of the iPod," says the report.

According to the FT, this innovation may still include a video enabled iPod, despite Apple CEO Steve Jobs' claims that there will be no video iPod, because people do not want to look at video on tiny screens.

Gartenberg says: "Apple is going to downplay the notion of a video iPod because they don't have one at the moment. But that is something that is going to have to change."

Gartner analyst Michael McGuire believes Apple should develop software that could serve as the operating system for a wide range of digital entertainment devices offering music, video and photos.

The report concludes: "Unless it acts soon, Apple could see its commanding lead in digital music disappear. The risk is that history would repeat itself, with Apple again relegated to the fringes of a booming market."