Move over netbooks. Apple, Inc. is coming to town, and its likely bringing with it a new entry to the low-cost, mobile computer market.

 

A new analyst report released this week renewed speculation that Apple (News - Alert) is developing a large-screen iPod touch, or a tablet-based device. The seven-inch to 10-inch “multi-touch” device would likely be released in 2010, the report said.

 

Piper Jaffray senior research analyst Gene Munster, who has been following digital media companies, including Apple since 1995, said in his research report obtained by BusinessWeek that the device would resemble a touch-screen tablet computer and cost between $500 and $700. The larger iPod Touch would likely roll out during the first half of 2010, the report said.

 

"Such a product would fill the existing gap in Apple's product line between the iPod Touch and the MacBook," Munster wrote.

 

For months, Apple has been rumored to be pursuing a netbook of its own. But company executives have dismissed the idea. Tim Cook, COO of Apple told investors during a fiscal second-quarter earnings conference call in April that netbooks have cramped keyboards, small screens, "junky" hardware and bad software, PC World reported.

 

Netbooks, which are less expensive, Internet-optimized mini-laptops, wouldn’t mesh well with the Apple brand, analysts say.

 

 "A low-cost netbook would serve to cheapen the Mac brand," Munster wrote in his report. “Apple is observing the netbook market in a similar way, and will eventually enter with a tablet, a premium mobile computing device.”

 

While Apple isn’t commenting on the swirling rumors of its possible touch-screen device, there are signs that something is brewing. As TMC (News - Alert) recently reported, Taiwan-based Wintek is designing touch panels for Apple’s new entry, and shipments are slated to start in the third quarter this year.

 

The netbook market appears to be a bright spot in a struggling consumer electronics industry. The devices are growing in popularity as consumers look for lower cost options in a weak economy. About 35 million netbooks are expected to ship this year, ABI Research predicts. That number is expected to blossom to 135 million by 2013, the company says.

 

Verizon (News - Alert) announced last week it began selling Hewlett Packard Mini 1151NR netbooks at its stores, TMC reported. Dell (News - Alert), too, announced plans this week to sell its new Latitude 2100 netbook. But that model targets kids, TMC said in a report this week.

 

So, for now, consumers remain in a holding pattern as Apple prepares its next greatest launch. But no matter what the company unveils, Apple already has enjoyed a healthy first quarter. As TMC reported, Apple reported a fiscal first-quarter profit of $1.61 billion, or $1.78 a share, on revenue of $10.17 billion. The company attributes the growth, in part, to the popularity of the iPhone (News - Alert).