Apple's Big Surprise: Anybody's Guess

For the Mac faithful this time of year is a special one: The always lively annual Macworld conference that Apple Computer Inc. and co-founder Steve Jobs host in San Francisco begins Tuesday.

Web sites concerning all things Apple (AAPL) abound with rumors and speculation that swirl weeks before the event and Jobs' keynote, to be delivered on Tuesday.

This time around, analysts say their money is on a revamped line of notebook PCs that is sorely needed, more deals with media companies for a larger mix of content on the recently announced video iPod and possibly, but less likely, a new flash-memory-based iPod.

"Apple's laptop line desperately needs to be refreshed," said Tim Bajarin, an analyst at Creative Strategies. "In that context, I wouldn't be surprised to see a strong updated line of laptops."

Apple, whose market-leading iPod digital music player has revived the company, is in the midst of shifting to microprocessors from Intel Corp. (INTC) and away from the PowerPC chip it has used for years. Apple has said it will start selling Intel-based computers by the middle of this year.

But many analysts have said for months they expect an earlier introduction of some Macintosh models, particularly ones using the older G4 processor.

"We think the iBook, PowerBook, Mac Mini, and potentially Xserve are areas that are going to move to Intel first," said Shaw Wu, an analyst at American Technology Research.

A new hard-disk-drive based iPod (its more recently introduced Nano and the Shuffle use flash-memory chips instead to store songs) is less likely, analysts said.

Cupertino, California-based Apple rolled out the video iPod in October. That announcement also came with a deal with Walt Disney Co. (DIS) to sell hit shows such as "Desperate Housewives" and "Lost" for download on its iTunes music store.

Apple followed up with a deal to sell some content from NBC Universal, the television network owned by General Electric Co. (GE). Analysts expect more at Macworld, following the announcement of a raft of content deals at the Consumer Electronics Show, which wound down on Sunday.

"I expect new content relationship announcements," said Roger Kay, president of technology consultancy Endpoint Technology Associates.

At the show, known as CES and the largest U.S. tech show, content took center stage for the first time, and Apple's Jobs will more than likely follow up with more deals to make more video content for sale on iTunes.

At CES, actors Tom Cruise and Tom Hanks and pop star Justin Timberlake rubbed shoulders with the top executives from Yahoo Inc. (YHOO), Sony Corp. (SNE) and Microsoft Corp. (MSFT).

Their appearances matched a litany of deals by Time Warner's (TWX) AOL, NBC Universal and Viacom's (VIAB) MTV at the Las Vegas convention, where media companies were once sidelined.

Apple has a minimal presence at CES and Jobs prefers to unveil his company's latest products — famously tightly kept secrets — at the Macworld convention in San Francisco.

And, of course, expect a surprise from Jobs. For years now, Jobs will appear to conclude his keynote, only then to say, "Oh, and one more thing ...."

Said analyst Bajarin, a long-time Silicon Valley watcher: "He also has something else up his sleeve that none of us have a clue about."