Online Rumors of a Touch-Screen iPod Heating Up

With more than 100 million iPods on the street, it's easy to see that the Apple-designed music player has become a cultural phenomenon.

Consumer interest in the iPod shows no signs of waning. Want proof? The blogosphere is buzzing with rumors that a next generation iPod is going to be released in the next few days, and those mere rumors may have actually boosted the company's stock price.

On Monday, the tech blog Secret Notes posted a short bit from an unidentified source that offered: "… the possibility of an iPod update as early as tomorrow, with a touch-screen iPod taking center stage."

That lightly sourced rumor, which has since been retracted by the site, was enough to get traders moving on Wall Street. Shares of Apple shot up more than 3 percent during trading yesterday with no real news coming out of Apple's Cupertino, Calif., headquarters.

An Apple spokesperson tells ABC News the company doesn't comment on speculation about its products and noted that Apple does not have any public announcements scheduled in the next few days.

Apple's Burgeoning 'Ecosphere'

Analysts who follow the company closely say a sixth-generation iPod is just one of many possibilities for building the Apple digital media "ecosphere." But, they say, any new hardware from Apple probably will not be introduced until after the company gets its highly anticipated iPhone to the market in late June.

"The most important product in Apple's pipeline is the iPhone," said Tim Bajarin, an Apple analyst at Creative Strategies. "Nothing is going to steal the limelight from the iPhone. That's the No. 1 reason that I don't think we'll see a new iPod any time soon."

The new mobile phone and music device is Apple's first push into the cell phone space. The iPhone features an innovative touch-screen display that takes up the entire face of the device.

Much of the blogosphere speculation centered on the belief that a new iPod could have a similar touch screen. Many experts say this technology will eventually be integrated into the iPod, but not too soon.

"There's a real question mark from a lot of us in the sense of Apple actually doing an iPod that has the touch screen like an iPhone during the first year of the iPhone," said Bajarin.

A Bigger Nano?

Apple executives have set expectations that the company will sell 10 million of the $500 phones during the first 18 months on the market, with the new touch technology a key sales driver. If the touch-screen option is offered on iPods right away, some analysts believe it could erode the sales of the iPhone.

Instead, they believe the next big iPod announcement from Apple will be higher memory versions of its popular Nano iPod models, which currently top out with eight gigabytes of memory -- enough memory to hold roughly 2,000 songs.

Previous iPod product introductions have been accompanied by P.T. Barnum-style fanfare at one of the two major Apple conferences held each year. The next big Apple shindig is the Apple Developers Conference in June, at which most analysts believe the company will focus on the next generation Mac operating system -- known as OS X Leopard.

So when will American consumers get their first look at the next big thing in portable music?

"If we see new iPods, the more likely time you'd see them most likely will come just before or some time in the third quarter," said Bajarin. "What you want to do is have the products in the pipeline for the Christmas quarter."