Apple getting into movie rental business

The Baltimore Sun

SAN FRANCISCO -- Now that it has conquered the online music business, Apple Inc. wants to do the same with online movie rentals.

Apple announced at the opening of the Macworld Conference & Expo yesterday it will begin renting downloadable movies at its iTunes store for $2.99-$3.99. High-definition versions cost $3.99-$4.99. Users will have 24 hours to finish watching movies once they start.

Apple also introduced what chief executive Steven P. Jobs said was the world's thinnest computer - a notebook PC that's only three-quarters of an inch at its thickest point and skinny enough to fit inside a manila interoffice envelope.

In what could be a harbinger of the beginning of the end of CD and DVD drives in computers, the new three-pound MacBook Air doesn't have an optical drive. Just as CDs and DVDs replaced floppy discs and tapes, Apple and Jobs say wireless innovations are beginning to make optical drives obsolete. Eliminating a drive also cuts down on space and weight.

"We don't think most users will need an optical drive because MacBook Air is made to be a wireless machine," he said. Just in case, though, users can buy an external optical drive from Apple for $99.

The new computer isn't cheap. It will start at $1,799 when it begins shipping in two weeks.

Apple, of course, isn't the first computer maker with an ultra-portable. Sony currently is a leader in the business, and Chinese PC maker Lenovo earlier this month unveiled its own ultra-portable as part of its entry into the U.S. consumer business. Dell rolled out a thin and light notebook of its own last year, as did other PC makers.

But some industry analysts are already predicting that MacBook Air's distinctive design and features will make it a hit with consumers and some business people - despite its hefty price tag.

"It's going to be the technology object of desire for 2008," said Michael Gartenberg of technology consulting firm Jupiter Research.

Apple isn't the first company to get into the online movie rental business. is among others also rolling out similar services. On Monday, movies-by-mail pioneer Netflix said it was removing limits on the number of movies and TV shows its customers can view over the Internet using its Watch Instantly service.

But Apple's service is unique in that users will be able to transfer movies from computers to their iPods. And if they buy one of the company's Apple TV set-top box devices, they can transfer them to their big-screen TV, too.

To help support its new movie business, Apple has overhauled its Apple TV device, Jobs said. The latest version of Apple TV will go for $229, Jobs announced yesterday, and will let users connect their TVs directly to the Internet - with or without a home computer.

Even more important, Apple's online movie rental has the backing of every major Hollywood studio. Jobs' history as a founder of Pixar Studios - and now as the biggest shareholder of Pixar owner Walt Disney Co. - undoubtedly helped in talks with studios.

Apple already sells movies, TV shows - and music, of course - on iTunes. But Jobs acknowledged movie sales haven't met Apple's expectations.

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