American Technology Research analyst Shaw Wu expects Steve Jobs will surprise Macworld Expo attendees during his keynote presentation with announcements that focus on the subnotebook market, Blu-ray, and iTunes movie rentals. He also expects that Appleis CEO will have something up his sleeve that no one has yet predicted.

Appleis last offering in the subnotebook market was the PowerBook 2400 in 1997. This time, however, the Cupertino company will likely forego tradition design elements by using NAND Flash RAM for primary data storage to reduce power consumption, improve reliability, and reduce weight. Likely names for the laptop, according to Mr. Wu, include ""MacBook mini" or "MacBook slim."

Blu-ray, one of the potential successors to the DVD movie format, will likely make its first appearance in Apple computers at Macworld Expo, too.

"Our sources indicate that Apple will outline is high-definition video strategy with the support of Blu-ray as opposed to HD-DVD," Mr Wu said. "We believe this is a key announcement as current Macs ship with DVD and Sony gains a strong ally in Blu-ray. We would note that Disney supports Blu-ray and Microsoft is a big supporter of HD-DVD."

Appleis movie-related announcements wonit be limited to Blu-ray support. Mr. Wu expects Apple will also announce movie rentals through the iTunes Store. He believes "that rentals are a significant change in [Appleis] philosophy with its current iTunes download business model. The positive implication from this is that Apple enhances its video experience and makes it more compelling to move and/or stick with the iTunes + iPod + Mac + iPhone + Apple TV ecosystem."

Mr. Jobs may also announce storage and speed bumps for other Mac models and possibly the iPhone, but Apple TV updates may not come until later in 2008 or even sometime in 2009. Mr. Wu added "We believe a 3G iPhone will most likely ship in the mid to [second half of] 2008 timeframe. We believe that by then the network coverage, price points, and battery life issues will be better addressed."

Mr. Wu is maintaining his "Buy" rating and US$210 target price for Appleis stock. Apple is currently trading at $195.48, up 0.64 (0.33%).

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