Surprise at the core of Apple's showcase

APPLE Inc Chief Executive Officer Steve Jobs's annual Macworld surprise may be a slimmed-down laptop and a higher-capacity model of the iPhone.

Jobs traditionally uses the Macworld Expo in January to showcase new products. Last time, it was the iPhone and Apple TV; the year before, faster Macs with Intel Corp chips.

Piper Jaffray & Co analyst Gene Munster and UBS AG's Benjamin Reitzes expect Jobs to capitalize on demand for the Mac by introducing a smaller, lighter version of Apple's MacBook notebooks.

Goldman Sachs Group Inc analyst David Bailey anticipates a version of the iPhone with 16-gigabytes of storage, double the capacity of the current US$399 device.

"There's always a possibility they'll announce something that no one has thought of yet," New York-based Bailey told Bloomberg News. He recommends investors buy Apple shares.

Speculation about what Cupertino, California-based Apple might introduce contributed to an average five-percent rise in the shares between December 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 US$4.09 to US$187.21 yesterday in Nasdaq Stock Market trading. The shares have more than doubled this year, making them the sixth-best performers on the Standard & Poor's 500 Index.

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 33-centimeter screen. Apple also sells the MacBook Pro, which have 38cm or 43cm displays.

While sub-notebooks accounted for less than eight percent of portable PCs sold in each of the past two years, shipments may rise 20 percent to nine million units in 2008, said researcher IDC in Framingham, Massachusetts. The machines typically have 30cm or smaller screens and weigh less than 1.81 kilograms.

The company last introduced a sub-notebook in 1997. Called the PowerBook 2400c, it had a 26cm display and weighed 2kg.