Speculation over whether Apple is preparing to launch an iPod phone all but ended on Thursday after a patent application revealed that the computer group is working on a device that will combine a “media player” with a mobile phone.

Apple fanatics and Wall Street analysts have long speculated that the company would move into the mobile handset market.

“Today was probably the final hard evidence that they’re working on something,” said Gene Munster, analyst at Piper Jaffray. “Now the key question is the timing.”

Many observers believe Apple, which is notorious for its secrecy around product launches, might launch a mobile phone in January at MacWorld, its annual convention and expo. But Van Baker, an analyst at Gartner, said such speculation was premature. “Every time you get close to MacWorld the rumour mill and speculation ramp up,” he said.

Apple’s patent application outlined plans for a device that would combine a “cell phone” and a “media player.” The bulk of the application was dedicated to describing a new way of assembling the device. It contained few details about the device itself.

Detailed drawings were submitted along with the patent application, but could not be recovered from the US Patent and Trademark Office’s website.

The mobile handset market is seen as an important new growth area for Apple, which dominates the market in portable music players. It comes as Microsoft and other digital music rivals are stepping up efforts to grab market share from the Apple’s iPod in the music player market. Zune, Microsoft’s answer to the iPod, made its debut last month to mixed reviews.

Apple has sold more than 70m iPods since the device first launched in 2001. That number pales in comparison with the potential market for mobile phones, however. Analysts expect more than 1bn mobile handsets will be sold in 2007.

Apple shares were steady in after-hours trading at $91.66.

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