A Fool Looks Back

Another spin on the iPod and a refreshing twist in chat software were fit to be featured this past week. Let's take a closer look.

An Apple a day keeps the short sellers away
You want to know when you've got it made on Wall Street? It's when you're like Apple Computer (NASDAQ:AAPL). One day after getting hammered despite a reasonable quarterly report, the stock bounced back with a 9% gain on Thursday. Was it investors, mulling over the financials a day later and suddenly liking what they're seeing? Was it the market, making sure that it didn't hop off the Apple bandwagon too early? Was it the video iPod?

Ahh, yes, the video-enabled iPod. Apple's latest creation won't just play tunes and show still photographs. It will store up to 150 hours of video, too. Amazing, right? When you think of Sony (NYSE:SNE) trying to pitch its handheld PSP gaming device as a video platform, with pricey movies on an obscure format, it seems as though Apple's got it surrounded. Portable DVD player manufacturers? Enjoy those overpriced paperweights. Apple's got a winner on its hands.

Or does it? Will consumers find the 2 1/2-inch screen too small for their viewing habits? It may work out great for music videos or some of the Pixar (NASDAQ:PIXR) shorts that will be available for purchase, but are you ready to hunker down with your iPod for a three-hour epic?

Does it matter, really? Offering video is just a way for Apple to throw its net even further into the mainstream. Even if you ignore the video functionality, you are talking about an iPod with a longer battery life and a sleeker, compact design than the original. This perpetual one-upmanship on Apple's part -- I mean, weren't we trading in the Shuffle for the Minis for the Nanos? -- is brilliant, given that it keeps its fan base in a perpetual state of upgrading.

In other words, even if you couldn't care less for streaming video clips on an iPod, you've got to like what you see.

Plug that boombox back in and pour me another
Meanwhile, Yahoo! (NASDAQ:YHOO) had Microsoft (NASDAQ:MSFT) duck out of its iPod burning party long enough to announce a partnership that will make the companies' popular instant messenger software compatible with each other's.

It's about doggone time!

Even though it would be great to see the market leader -- AOL's AIM -- enter the mix, it's great to see two of the three largest players coming together. One of the biggest drags of communicating online was that someone with a Yahoo! Messenger account had to fire up MSN Messenger to chat it up virtually with someone on Microsoft's service. Yes, these are free services. Most chat addicts have downloaded all of the popular platforms. Still, it's great to see two competitors realize that a handshake for the sake of efficiency can be a handshake worth making.

The headlines behind this week's stories:

• Apple's Shares Get Pared
• Oops, Apple Does It Again
• Microsoft, Yahoo! Aim for Convergence

Until next week, I remain,

Rick Munarriz

Pixar is a Motley Fool Stock Advisor recommendation.

Longtime Fool contributor Rick Munarriz is already eyeing a video iPod for the holidays. He does not own shares in any of the companies mentioned in this story. The Foo l has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.