Mac sites were abuzz Friday on reports that Apple Computer is readying a color-screen iPod in time for the holidays.

According to Mac news and rumor site Think Secret, the 60GB device would be similar to the current fourth-generation iPod but would be capable of displaying photos on its high-resolution color screen. The $499 device would also be able to show photo slideshows set to music and output its display onto a TV, the site said.

Apple remains tight-lipped about its new products, but Think Secret has accurately ferreted out details on a number of recent Mac products, including the G5 iMac. An Apple representative was not immediately available for comment.

While other companies are pursuing devices that can play videos and TV shows, as well as photos and movies, Apple CEO Steve Jobs has downplayed the idea of a video iPod, noting you can't watch video while doing other things, as you can with music.

Lending credence to the rumors of a Photo iPod is the fact that the latest processor from iPod chipmaker PortalPlayer supports many of those new functions. According to documents PortalPlayer filed with the Securities and Exchange Commission in August, its PP5020 supports color LCD displays as well as output to a TV or printer. The company said its chips are also capable of displaying photos and playing slideshows set to music.

The possibility of such a device raises the question of whether Apple might bring a version of its iPhoto software over to Windows. The company has already ported its iTunes software from the Mac to support the iPod and its music store efforts.

As for the 60GB capacity, drive maker Toshiba has announced plans for a 60GB drive and a spokesperson in Asia was quoted earlier this year as saying Apple would be a customer. The Mac maker said when it launched the latest generation of iPods in July that it had no immediate plans for a 60GB player.

Toshiba has already said it would have a 60GB music player of its own.

From News.com