Steve Jobs' Health Upstages iPod Event

He needs to keynote Tuesday's iPod event to ease investor worries, an analyst says.
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Apple

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shares traded lower Monday, a day before its highly anticipated "Let's Rock" media event, as concern over the health of CEO Steve Jobs took center stage.

At the event, scheduled for 1 p.m. EDT on Tuesday, Apple is widely expected to unveil a redesigned

iPod nano

, a new iPod touch and a software update for its popular iTunes computer program. In the last few years, Apple has used the September media events to update its wildly popular iPod players.

"We expect the company to release a redesigned iPod touch and a new iPod nano along with price cuts and capacity changes for the

iPod shuffle and classic," writes Piper Jaffray analyst Gene Munster in a research note. "In other words, this event will likely be focused on Apple's music products, which is widely expected by the Street."

But unlike the last three Septembers, when Apple's stock rallied in the days before the big event, shares have fallen 8% over the last week. For Wall Street, Steve Jobs' appearance has been key to where the stock trades.

"Shares of

Apple have traded down...due in part to revised expectations surrounding the event," Munster wrote. "We believe the event will be a net positive for the stock due to reassurance regarding Steve Jobs' health."

Steve Jobs' Health Is Your Business

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Jobs has previously battled pancreatic cancer, but his frail appearance during the launch of the

iPhone 3G

in early June ignited speculation that he is continuing to battle the disease, sending Apple shares tumbling more than 7% during the week. Many Apple shareholders hope Jobs will be the keynote speaker during tomorrow's event, assuaging fears.

"We are confident that Steve Jobs will be presenting and we anticipate his appearance at the event to be viewed as a positive," Munster wrote. "While some investors are concerned that Jobs will not deliver the keynote, we have reason to believe he will. Therefore, we believe his health has improved since the June event, which would be a positive for the stock."

Investors may not be convinced yet that Jobs will make an appearance. Apple shares were lately down $6.88, or 4.3%, to $153.30. For comparison, shares of Apple climbed more than 4% ahead of last September's "The Beat Goes On" event, where Apple introduced the iPod touch for the first time, a refresh for the iPod shuffle and iPod nano product lines, a partnership with

Starbucks

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and a price cut for the first generation iPhone.

For its September 2006 "It's Showtime" event, Jobs introduced an updated version of the iPod nano as well as a completely new design for the iPod shuffle. Apple also updated its iTunes software and offered a sneak peek at the Apple TV device. During the week leading up to the conference, Apple's stock gained roughly 6%.

In 2005, Apple shares jumped more than 5% the day before the September event where the company replaced the iPod mini with the new iPod nano. The company also unveiled the

Motorola

(MOT)

ROKR iTunes handset, which would ultimately be overshadowed by the iPhone.

Also on Monday,

Best Buy

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became the first outside retailer to offer Apple's iPhone 3G. The Minneapolis-based electronics retail giant's Best Buy Mobile stores have begun selling the popular handset nationwide for the suggested retail price of $199 for the 8-gigabyte model and $299 for the 16-gigabyte version.

Last month, Best Buy completed a two-year conversion of its 970 stores to include Best Buy Mobile in order to offer the iPhone as well as an array of other wireless carriers and handsets. Best Buy Mobile offers wireless plans from as many as nine carriers and up to 95 devices.