By Michael Kanellos
Thursday, July 27 2006 09:45 AM
URL: http://www.zdnetasia.com/news/hardware/0,39042972,39378304,00.htm

PALO ALTO, Calif.--In about five months, you'll be able to watch high-definition video on your iPod.

San Carlos, Calif.-based ATO will come out with a sleeve with a built-in LCD (liquid crystal display) screen that slips around Apple Computer's iPod--whether it's a video iPod or not--and turns it into a portable high-definition video player, John Scott, CEO of the start-up, said at the AlwaysOn Innovation Summit taking place this week at Stanford University here.

The HD player will sell for between US$199 and US$250 and will be released in five months. The initial players will be able to handle MPEG 4, Divx, HD.264 and other video formats. The battery on the device will last about five hours.

The company launched its first iPod video sleeve, the iSee 360, earlier this year and is selling them in Wal-Mart Stores, Best Buy and other retailers. "Sales are going well," Scott said.

Physically, the device is a sleeve. The iPod slips in the bottom, locks into a USB 2 connector, and effectively vanishes into the larger iSee.

While the last couple of generations of iPods have used USB 2, plugging into the USB 2 slots of the different iPods is difficult because the physical implementations of the various versions are slightly different. ATO has had to tailor its product so that it works with standard-size iPods and iPod Nanos.

The iSee also partitions the storage inside the iPod, creating an area that is for regular iPod content and another for content meant to be watched with the iSee. By partitioning the hard drive or memory, the iSee lets consumers store video clips not encoded with Apple's copyright-protection software.

Most people will use these devices to watch small clips, Scott said, and not the kind of studio fare that Apple is selling on its site.

"It's to get around the DRM (digital rights management)," he said.

Scott, like most of the other employees at ATO, came from Apple and produces the product under a license from the Mac maker. Philips will make some of the chips for the iSee.