Speculation is mounting Apple will unveil a new film download service as early as next week. The plan could be accompanied by new iPod music player models.

Rumours that the company is set to reveal deals with a number of movie studios were fanned last month when the chief executive of Lions Gate Films, Jon Feltheimer, said his company has "delivery deals in place" with a number of groups, including iTunes, Apple's online music store.

The Lions Gate president, Steve Beeks said in a conference call with investors: "We know when they are planning on launching," adding that the Apple service would begin before the end of the year.

As well as Lions Gate, it has been reported that Disney, where Steve Jobs, the Apple chief executive is a board member, will also sell films through iTunes.

According to thinksecret.com, a website with a track record in leaking details of forthcoming Apple products, the film announcement was originally scheduled for August but was postponed.

It added that contrary to a number of other reports, Apple would not release a wide-screen iPod next week - but would unveil a second-generation iPod nano.

The company was not immediately available for comment when contacted by Times Online.

Apple has been locked in negotiations with studios for some time in efforts to fix the prices it would charge for movies over the web. A major hurdle has been the influence of large retailers such as Wal-Mart, which account for the majority of DVD sales and are resisting any moves from the studios that could see them undercut by online rivals.

Apple's film downloads will be priced from $9.99 to $14.99 in the US, according to a Business Week report. The split-tier pricing is likely to represent a compromise from Apple which sell music tracks for a flat rate of 79p in the UK - a policy whih has frustrated music executives eager to pump up prices for newer tracks.

It is understood that Apple will pay wholesale prices of as much as $14 for new films.

These pricing levels could pose a problem for Apple, technology bloggers said, as films downloaded from iTunes are likely to be far less flexible than DVDs.

The Real Tech News blog said: "The movies you download are certainly going to be restricted with Apple [digital rights management systems]. This will likely mean headaches for anyone wishing to watch their movies on more than one computer, much less burn them to DVD’s for offline viewing."

All eyes will now be on next week's Apple Expo 2006 conference in Paris and on a simultaneous press event set to be relayed by satellite from California to London.

The showcasing of a new product at the show would fit with Apple's strategy in previous years, when it has unveiled new music players in time for the key Christmas shopping season. The news that Apple would switch to Intel chips for the first time was beamed to the European press in real time from the US.

The move could give Apple a boost as it comes under pressure to extend and defend it dominant position in online music. A major announcement could steal the thunder fom Microsoft's new Zune music player - due to be released later this year - analysts said.

Universal, the world's largest music group revealed last week that it will offer free music downloads via SpiralFrog, a website that will earn money through advertising.

Tsvetan Kintisheff of Kintisheff Research in a note: "We view the upcoming launch of the SpiralFrog online music service as a major development, directly threatening Apple’s digital music business."

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