Apple has been working on a video iPod with a 3.5-inch screen since last year, a report claims.

The company is nearing completion of its new device, which will have a digital touch screen that emulates the present mechanical click wheel, ThinkSecret claims.

The display will occupy the entire front of the device, the report explains, stating that the controls will pop up on the screen when a finger is applied to it.

Alluding to Apple CEO Steve Jobs' mention of the company's thirtieth anniversary on April 1, the report speculates the new product could debut on that day.

In a further claim, the report states Apple sold 3.9 million of its video-capable iPods during its just-gone December quarter.