Ever since Apple came out with the one-two punch of the iPod Nano and Video iPod last year, I have been wondering where they are going to go next. One of the reasons for the rapid growth of the iPod has been Apple's relentless innovation with the device itself, not just from the growth of the music store.

Of course, I consume all of the Apple rumors and speculation that I can, but I have noticed a confluence of events recently that have really got me thinking about the iPod. And I think that Apple could be on to something "really big" with the iPod.

Going back as far as February, there have been rumors that the next iPod will feature a 3.5" or 4" screen that occupies the entire face of the device, and that control will come via a touch screen. Here is a mockup image of such an iPod that I found via MacRumors:

Mockup of an iPod where the entire face is taken up by a display, and control is via a touch screen.
Image source: MacRumors

According to the rumors of the time, Apple had perfected some new sort of touch screen technology that allows the screen to register multiple simultaneous presses. With current touch screens, if you press one finger on the screen, everything will work fine. However, if you press two (or more) fingers on the screen simultaneously, then the touch screen will no longer report accurate results. Such a touch screen would provide for a pretty amazing model for user interaction, which I realized when I viewed this demonstration by Jeff Han.

So, while an iPod with a large display and a wicked touch screen all crammed into a package much smaller than those clunky Windows Portable Media Players is great and all, I don't think that this is the end-game for Apple. The one hallmark of Apple's latest resurgence has been for them to not rest on their laurels and reap fat profits until the well is try, but rather to continue to push themselves, and continually out-innovate their competitors.

This is what makes the recent spate of rumors about Apple ditching long-time iPod CPU supplier PortalPlayer for a new vendor so interesting. If these rumors are to be believed, there is more going on with the next iPod than just the display and control technology. Apple is also radically changing the guts of the iPod. But why? The reasons could simply by to reduce size and weight, or to increase battery life, but I think that Apple is onto something greater.

And I think this, because it is now rumored that Apple has selected nVidia to provide the graphics chip for the new video iPod. And why would Apple go with nVidia - well, it seems pretty obvious it would be to get a chip that is capable of doing 3D graphics, but on a power budget (a chip which nVidia definitely has).

Up until now, I have mostly disregarded rumors of Apple bringing games to the iPod. My reason for dismissing these rumors have been due to Apple's near religious focus on keeping the iPod simple, and due to the fact that the click wheel, while great for navigating a huge music library, absolutely sucks for gaming.

But a touch screen (especially an advanced one), on the other hand, doesn't suck for gaming. To believe this, all we have to do is examine what Nintendo has been doing with the DS.

The Nintendo DS is Nintendo's latest portable game console. When it first came out last year, it was largely panned by the press and the pundits, for it's gimmicky nature. The DS features two screens, a microphone, WiFi, and a touch screen (including a stylus). However, Nintendo is having the last laugh, as DS sales have been through the roof (especially in Japan, where the DS is absolutely destroying the Sony Playstation Portable). The reason why the DS is doing so well, however, has to do the with the first rule of video game consoles: "it's all about the software, stupid". Basically, Nintendo and its 3rd parties have been releasing a steady stream of great games, that have taken advantage of the unique hardware in the DS in innovative ways.

In particular, Nintendo has been trying to make portable gaming appeal to a wider audience - including women and older gamers. Nintendo has hit these markets, first with the Nintendogs games, and now with games like Brain Training. More importantly, these games have been selling, which proves that there is a market for games that aren't designed for boys age 16 - 22 in mind.

But, what does all of this talk about Nintendo have to do with the iPod? Well, Nintendo has shown that using a touch screen for gaming works great. And again, Nintendo has shown that there is a huge untapped market of people who will pay to play video games. Now, let's examine our proposed iPod again. Touch screen? Check. Graphics chip capable of producing 3D graphics? Check. Market share that covers a wide range of demographics (including women and people over the age of 30)? Check again. Based upon this line of logic, the iPod is an absolutely killer gaming platform that is just waiting to be born.

Think about it -- Apple already has a perfect distribution mechanism in the form of iTunes. Want to buy a game for your video iPod? Simply purchase it in iTunes, and it will get synced to your iPod automatically. Want to play a game? You can find it easily with the on-screen scroll wheel, and it boots nearly instantly, thanks to the fast hard drive (or flash).

The only piece of the puzzle that Apple is missing is the platform. In order for the gaming iPod to succeed, it is going to need to have some killer games (remember the first rule of video game consoles?). But, launching a new platform in the world means that over-tax game developers would have a new, non-standard, platform to support. Normally, there is a huge chicken-and-egg problem when a new platform is launched. Apple can sidestep this beautifully, however, because they will be able to sell millions of these things without it being able to play a single game. Once a large market presence has been established, game developers will come running.

But it would be better if the gaming iPod supported an existing platform. One idea would be if the gaming iPod ran a slimmed-down version of Mac OS X. In that way, games written for Mac OS X could run on the gaming iPod. I don't think that this idea is very feasible, because any modern game written for Mac OS X has insane hardware requirements, which the gaming iPod won't be able to match. Worse still, games written for Mac OS X won't be written with a touch screen in mind, which you would need to do when targeting the gaming iPod.

So, what about supporting a platform like BREW? Supposedly, Microsoft's upcoming iPod "killer", the Zune player, is going to support games written to the BREW standard. I don't find this idea to have a lot of weight, because it would be hard for BREW games to take advantage of the iPod's unique controls, and the BREW standard seems to really be optimized for use on mobile phones (which have external network connectivity).

And now, of course, we should cue the crazy rumors of Apple buying Nintendo. While such a move would certainly solidify Apple's move into gaming (and get them several platforms to boot), I don't think it's going to happen. The two companies are far too different. Some sort of partnership, however, does have potential.

Well, while I may not have the gaming platform puzzle sorted out, I definitely think that the gaming iPod is going to happen. While the rest of Apple's competition struggles to come up with a player that bests the current generation of iPod, Apple is going to leapfrog everyone (again!) and move into the realm of gaming. Such a move would definitely put the hurt on the PSP, and it wouldn't be so hot for Nintendo, either. But at this point, the tea leaves are saying that this is going to happen.

2007 should be quite an interesting year. :)

-Andy.

Technorati Tags: Apple, Sony, Nintendo, iTunes, iPod, Analysis, Rumor