Apple Peeled as Street Sweats an iPod Delay

But the company seems to be bumping up against technological constraints, Wu said. On the nano line, Apple is planning to change chips and architecture from a system made by PortalPlayer(PLAY Quote) that solely plays music to one potentially made by Samsung that can play both music and video, Wu said. Difficulties inherent in making that transition will likely push out the launch of the updated nano from the third quarter this year to the fourth quarter, he said.

Meanwhile, Apple has been widely expected to launch a new video-playing iPod that includes an LCD screen about twice the size or more than the one on current models. But Apple also wants to increase the battery life of the model, a contradictory goal since larger screens consume more energy. As might be expected, trying to meet both those goals at the same time has proved difficult, Wu said.

The company likely has tried to fix the problem by including a bigger battery, developing better software to manage battery life and developing a hybrid drive system that includes both a hard drive and NAND flash, which consumes less energy than hard drives. The attempt to find a solution will likely delay the launch of the new iPod from the fourth quarter of this year until sometime in the first half of next year, Wu said.

Ironically, the delay may actually help Apple, he said. By releasing both the video iPod and the nano last fall, Apple boosted fourth-quarter sales. But at the same time, the moves tapped out its short-term development efforts, forcing the company to delay the release of new or updated models, Wu said.

"For these next-generation iPods, we believe AAPL will likely pursue a strategy with refreshes in a more linear fashion," he said.