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Thursday March 28, 10:00 am Eastern Time

Forbes.com IPod Redux By Ari Weinberg

Apple Computer ‘s iPod portable MP3 player debuted to rave reviews last fall. The newest version, released last week, does little to diminish the applause.

But it’s not yet deserving of a standing ovation.

The new iPod doubles the storage capacity to 10 gigabytes (roughly 2,000 songs) and adds 20 equalizer presets. That extra space comes at a cost. The 10 GB version retails for $499, $100 more than the original. Like the original, you can try to compare the Apple (NasdaqNM:AAPL – news) to the under-$400 20 GB offerings from SonicBlue (NasdaqNM:SBLU – news) and Archos. But you really can’t.

That’s because iPod still has limited Windows compatibility. It’s a shame considering that the vast majority of personal computers are Windows machines. Some third-party developers have come out with Windows-based software and firmware (for the iPod itself), but Apple has yet to reveal any plans for Windows compatability, though the company is rumored to be working on just such a product. The company is rumored to be hammering out a Windows solution, but that involves some mighty concession from both Apple and Microsoft (NasdaqNM:MSFT – news) .

Right now, Apple’s proprietary FireWire connection port is its leverage. FireWire transfers data at roughly 30 times Universal Serial Bus (USB), the current standard for interdevice connections for PCs and older Macs. The iPod’s FireWIre connection can tranfer 2,000 songs in 20 minutes. For a USB MP3 player, that would take ten hours. But as more portable devices–like digital cameras and camcorders–come with FireWire capacity, the Windows machine cartel may consider small concessions too keep the high-end digerati happy. The pressure is on Apple to play ball. Of course, it would be silly to assume that the minds at Microsoft and Intel (NasdaqNM:INTC – news) aren’t hammering out a technology to blow by FireWire.

Though many iPod owners use the device as a portable hard drive–which it is–the iPod was built for music. So why is Apple touting the introduction of new software that allows the iPod to display address databases from Palm (NasdaqNM:PALM – news) and Mac?

Could the iPod be Apple’s doorway into the crowded personal digital assistant market? Let’s hope not. Apple has a hit going with iPod’s current design and format–to try to morph it into an upscale PDA could be a Newton-sized mistake.

Related Links at Forbes.com

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