Sources have confirmed to Think Secret that the new, "true" video iPod will be featuring a 4-inch display rather than the 3.5-inch display that has been previously speculated. This iPod is being rumored for a late-March or early-April announcement, but this could be pushed back pending Apple's negotiation with the movie industry to include full-length movies in the iTunes Music Store. They might be looking to make this iTunes feature-length movie announcement along with the "true" video iPod announcement.
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Apple thinks big(ger): video iPod to pack 4-inch display [ThinkSecret]