COMPUTER giant Apple last night moved to strengthen its grip on the digital media market with the launch of a new film download service - plus a device which will make it compatible with TV sets.
The gadget - dubbed the iTV - will wirelessly transmit iTunes' music, film, TV and video content from users' computers to their flat-screen televisions.
Giving a preview of the box before its 2007 launch, the Apple chief executive, Steve Jobs, said it would bring Apple into the living room.
It will be preceded by the technology giant's film download service, which will launch in the United States with 75 titles, and an international launch expected next year.
However, the iTunes Music Store will have minimal Hollywood support, carrying only movies from Walt Disney , where Mr Jobs is a board member.
By contrast, rival Amazon's movie service launched last week with distribution deals with seven studios - but not Disney.
At the Apple launch, Mr Jobs said 75 films, from Cinderella to Pirates of the Caribbean were now available for purchase on iTunes from Walt Disney, Pixar, Touchstone and Miramax.
Films take about 30 minutes each to download using a high-speed internet connection. Each download will cost between £5 and £8 in the US market, and the iTV device will be priced at about £160.
"In less than one year we've grown from offering just five TV shows to offering more than 220, and we hope to do the same with movies," Mr Jobs said. "iTunes is selling more than 1 million videos a week, and we hope to match that with movies in less than a year."
Industry experts said the iTV was an attempt to solve the entertainment industry's current dilemma: how to bridge the gap between the living room television and the computer.
Mr Jobs also announced a new, thinner iPod nano, with a 24-hour battery life and new games. It will be available early next year in the US.
While Apple paraded its products at a launch in San Francisco, however, the company faced a fresh challenge to its domination of the market for downloaded music as US rival eMusic announced the launch of an online music service across Europe with songs from 17p.
Apple's iTunes service accounts for around 80 per cent of the UK market for legally downloaded music. iPod sales continue to be strong but with the growth rate slowing.
In the US, Apple has already expanded iTunes by making 2,500 music videos, a range of television shows and some short films available for paid-for download. To cater for this new market, Apple sells a version of its iPod with a 2.5in colour screen which can store 150 hours of video.
Christopher Phin, features editor of MacUser UK magazine, said: "The first hurdle was jumped successfully with the iTunes music store and the obvious next thing to do was movies."
While Apple has enjoyed incredible commercial success through global sales of 58 million iPods over the past five years, its iTunes service faces fresh competition. Amazon last week unveiled a service called Unbox, which allows customers in the US to buy movies and TV shows for download from 30 studios and companies. And Microsoft plans to launch its "Zune" portable media player before year-end.
Yesterday, New-York based online company eMusic launched a service in 25 European countries which will allow users to buy tracks for as little as 17p each for a monthly subscription fee of £8.99 to £14.99.