SAN FRANCISCO (AP) – Purveyors of porn and entrepreneurs who spied a niche when Apple Computer Inc. unveiled its video-playing iPod are proving that sex even sells in tiny packages – especially when it is portable.

One online social network of amateur pinup girls said it logged 500,000 downloads of the sexy “featurettes” – three- to five-minute video clips – in the first 24 hours targeting the new iPod-toting crowd.

It’s a no-brainer: pornography to go.

The naughtiness is already finding its way into video handhelds through business models tried-and-true – along with some new ones – as the adult entertainment industry works to untether video content.

Soon enough, skin flicks whose viewing has been largely restricted to the privacy of homes and theaters could be on view in the open public of parks and mass transit, for all ages to see.

Porn is no doubt a big business on the Web.

Two in five Internet users visited an adult site in August, according to tracking by comScore Media Metrix. The company said 3 percent of all Web traffic and 2 percent of all surfing time involved an adult site.

The Internet accounted for $2.5 billion of the adult industry’s $14 billion in U.S. revenues last year, about the same as revenues from cable and satellite pay-per-view showings, according to Adult Video News, a trade magazine.

Vivid Entertainment Group, a major adult video producer that already offers high-resolution still images, video clips and footage from “voyeur cams” through its Web site, now plans to shoot shorter films specifically for the iPod and other portables.

“It could be a huge percentage of our business,” says the company’s chief executive, Steven Hirsch. “People love watching adult movies and to be able to carry an adult movie in your pocket is a powerful tool.”

Sin City, based in Chatsworth, Calif., already offers trailers of full-length adult films for the Sony PlayStation Portable, a handheld video game player. It now plans full-length adult films for the video iPod.

Apple wasn’t first on the scene with a small digital device capable of playing good-quality video.

Creative Technology and iRiver are among companies with pocket-sized devices already on the market; they use Windows Mobile software to display video, audio and still images.

In addition, one early entrant, Archos, has a Jukebox that can store and play a whopping 400 hours of video in the MPEG-4 standard.

Yet the very marketing and deal-making finesse that helped Apple rise to dominate the portable music market make its new video-playing iPod a likely vessel for adult movies’ expansion to portable porn.

The Apple’s iTunes online story already features several hot and heavy podcasts, audio downloads geared to portability. The company isn’t offering much in the way of sex on videos, though some of the music videos it sells for $1.99 each can tend toward titillation. Apple officials refused requests for interviews on whether they might offer adult content on iTunes for iPod owners.

For many high-profile companies, sex remains a tough sell.

Although wireless phone companies support devices that play video, they are reluctant to expose themselves to complaints from a large and valuable customer base.

One company that knows firsthand is Digital Orchid, which manages the delivery of streaming video to cell phones for top brands, including MLB.com, NASCAR.com, ESPN and the National Hockey League.

It also handles Hawaiian Tropic, the suntan oil company perhaps better known for its comely bikini models. That sort of content is about as racy as wireless carriers want to get, says Robert Betros, Digital Orchid’s co-founder and chief technology officer.

“We won’t cross that line because the carriers won’t distribute it, and that’s a majority of the revenue opportunity for us,” Betros said. “Now they may change their tune, and in some places in Europe carriers are distributing this kind of content.”

In the wireless industry, carrier-approved content exists within something referred to as a walled garden. In the United States, at least, that garden is generally safe for children.

Once users stroll outside garden walls and inside a Web browser, however, all bets are off.

A company called Xobile sells pornographic video clips for cell phones. No special operating system or other software is necessary: Just a Web browser, which is commonplace now for phones with access to digital data networks.

That it’s now easier than ever for minors to view X-rated content on portable devices concerns media watch groups that seek to protect children.

The problem is that children are often quicker to grasp the technology than their parents, says Jack Samad, a senior vice president with the National Coalition for the Protection of Children & Families.

“The arena is wide open, unfiltered, unrestricted, for adult content,” Samad said. “Children are very aware of where it is and how to download it.”