``There's always a possibility they'll announce something that no one has thought of yet,'' said New York-based Bailey. He recommends investors buy Apple shares. Speculation about what Cupertino, California-based Apple might introduce contributed to an average 5 percent rise in the shares between Dec. 17 and the first day of Macworld Expo in each of the past three years, said Munster, who is in Minneapolis. The five-day conference in San Francisco drew 45,000 Apple enthusiasts this year. Apple spokesman Steve Dowling declined to comment on the plans. Apple, which also makes the iPod music player, rose $6.70 to $193.91 at 4 p.m. in Nasdaq Stock Market trading. The shares have more than doubled this year, making them the fifth best- performers on the Standard & Poor's 500 Index. Mac Focus Analysts speculated that Apple would add a ``sub-notebook'' or ``ultra-portable'' personal computer. The machine would be smaller than the smallest Mac notebook today, which has a 13- inch (33-centimeter) screen. Apple also sells the MacBook Pro, which have 15-inch or 17-inch displays. While sub-notebooks accounted for less than 8 percent of portable PCs sold in each of the past two years, shipments may rise 20 percent to 9 million units in 2008, said researcher IDC in Framingham, Massachusetts. The machines typically have 12- inch or smaller screens and weigh less than 4 pounds (1.81 kilograms.) ``Ultra-portables don't sell a ton,'' said Andy Hargreaves of Pacific Crest Securities in Portland, Oregon, who expects Apple to introduce one in January. ``Then again, music players didn't sell a ton until Apple came out with the iPod.'' The company last introduced a sub-notebook in 1997. Called the PowerBook 2400c, it had a 10.4-inch display and weighed 4.4 pounds. Prices for sub-notebooks start at about $1,500, more expensive than standard notebooks, IDC analyst Richard Shim said. Stylish Products A slimmed-down Apple notebook will cost less than the $1,999 MacBook Pro and have a screen between 11-inches to 13- inches, Munster said this week in a note, citing unidentified Asian component suppliers. Hewlett-Packard Co. and Dell Inc., the world's top PC makers, dominate the market for notebook PCs and offer ultra- light designs. Still, Apple's reputation may help lure customers. ``It's a segment they could dominate because of their ability to create stylish products,'' said Goldman's Bailey, who doesn't expect a smaller notebook until the second half of 2008. ``It's 10 percent of the market they didn't have access to previously.'' Any new device Jobs unveils will expand the Macintosh-iPod- iPhone trio that have contributed to record sales and profit. IPod shipments may climb as high as 25 million units this quarter on demand for the slimmer Nano and new Touch models introduced in September, Munster said. IPhone, TV Sales of the iPhone, released in the U.K., Germany and France last month, may reach 2.1 million units over the holidays, said Reitzes. Apple had sold almost 1.4 million phones in the first three months after releasing the music-and-video- playing device in June in the U.S. Apple may increase the capacity of the iPhone to 16 gigabytes while keeping the price at $399, Munster said. The company will probably introduce a version that works on high- speed networks in 2008, he said. Jobs, 52, also may introduce a larger-screen handheld device for playing music and video and surfing the Web, said Andy Neff, an analyst at Bear Stearns & Co. in New York. Apple may also unveil a new version of Apple TV, a $299 device that connects to TVs and lets people watch movies and shows stored on their PCs. Apple needs to add more movies to its iTunes store to spur demand for Apple TV, which hasn't been a big seller for the company, Neff said in an interview. There are more than 500 movies and 550 TV shows available through iTunes. Munster and Reitzes haven't ruled out a movie-rental service on iTunes. Apple doesn't have distribution agreements with Sony Pictures, Universal Studios, News Corp.'s Fox and Warner Brothers, Reitzes said. ``There are some hard core fans that no matter what Jobs announces, that won't be enough,'' said technology commentator Scott Bourne, who hosts a weekly podcast called the Apple Phone Show. ``And there are some people for who, no matter what he says, are words from God's mouth.'' To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1(at)bloomberg.net Last Updated: December 21, 2007 16:06 EST | 
