Apple Sets Out for New Frontier: Video

Updated from 3:33 p.m. EDT

SAN JOSE, Calif. -- Already dominating the digital music market, Apple(AAPL Quote) hopes to broaden its reach into video -- and the living room.

CEO Steve Jobs on Wednesday announced three updated products, all with the video theme, including, as expected, a pair of new iPod models that will play movies and music videos. But Jobs didn't stop there, introducing an updated version of Apple's iMac desktop computer that enables owners to launch and play digital videos, DVDs and music using a remote control.

And he announced a new version of the company's iTunes music store that will allow customers to purchase videos, including first-run television programs, including the hit ABC series Desperate Housewives, and short films from the Jobs-headed Pixar(PIXR Quote).

The announcements mean that Apple will "have some really hot products" this holiday season, Jobs said. But they also represent something bigger, he said, emphasizing the company's move to allow the online purchase of video, and allow its playback on both computers and portable devices.

"I've got a feeling we're not in Kansas anymore," he said.

The effort represents Apple's first overt attempt to create a place for itself in the living room, and to counter such products as computers that run Microsoft's(MSFT Quote) Media Center PC software as well as upcoming video-game consoles from both Microsoft and Sony(SNE Quote) that those companies intend as much more than game-playing devices.

Prior to Wednesday's announcement, Van Baker, an analyst with Gartner, was skeptical that Apple would launch a video iPod because of the lack of potential movie content. But following the presentation, Baker said he was impressed by the content that Apple lined up, particularly the deal with Disney.

Although the amount of content that Apple has in iTunes won't be enough long-term, Baker says it's a good start and predicted that other media companies soon will be calling Apple to strike their own deals.