Apple touches on updates to classic iPods

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Trying to make video-on-the-go as ubiquitous as digital music, Apple on Wednesday unleashed a slew of new iPods, including a sleek Nano with a screen suitable for viewing TV shows and movies.

The new lineup also features an iPod "touch" that borrows interface technology from the iPhone, enabling users to surf the Internet, scroll through menus and resize images on a 3.5-inch screen by way of light finger touches.

The more video-friendly iPods come just days after NBC ditched iTunes in favor of selling such popular TV series as "The Office," "Scrubs" and "Heroes" through Amazon.com's Unbox service (HR 9/5).

Apple further embraced the wireless future with Wednesday's unveiling of its iTunes Wi-Fi Music Store which, among other niceties, lets iPhone and iPod touch users download songs, no computers necessary. Watching a video from YouTube -- or any other source -- in landscape mode on an iPod touch simply requires the user to rotate the device in the appropriate position for such viewing.

The Wi-Fi service will get a boost next month from 600 Starbucks stores in New York and Seattle. Customers at those locations with their iPhones or iPod touch devices will get free and simple access to iTunes, and a new "Now Playing" feature will display the title of the last 10 songs that played as they sipped coffee or stood in line at select Starbucks locations. Naturally, there's a one-click prompt to purchase each of those songs.

The Starbucks initiative will roll out nationwide next year.

As for the new Nano, Apple CEO Steve Jobs said, "We've taken the most popular music player in the world and added a stunning video playback just in time for the holiday season."

An 8GB iPod Nano boasts 24 hours of audio playback or five hours of video playback on a single charge and sells for $199. A 4GB model goes for $149. In order to accommodate video for the first time, the Nano is wider and shorter but no bigger than it was.

And for the purist, Apple has updated its six-year-old original digital music player and is calling it the iPod Classic. The Classic comes in an 80GB model or beefier 160GB unit capable of storing 200 hours of video.

"The first iPod put 1,000 songs in your pocket; this new iPod Classic can put 40,000 songs in your pocket," Jobs said.

Apple also reduced the price of its iPhone with 8GBs of storage from $599 to $399 and said it will phase out the 4GB model.

Attempting -- so far unsuccessfully -- not to be outdone by Apple, Microsoft said Wednesday that it will cut the price of its Zune from $249 to $199. Apple has sold about 100 iPods for every one Zune that Microsoft has sold.

Zune is a music player with a large screen that presumably will be used for a wide array of video some day. In the meantime, Microsoft has been touting the device's ability to share music by letting users zap songs from one Zune to another nearby Zune.

Apple also will sell ringtones for its iPhone for the first time. After buying one of 500,000 eligible songs for 99 cents, users can pay an additional 99 cents to customize 30 seconds of the song to use as a ringtone.

Wall Street heaved a symbolic yawn Apple's way Wednesday, perhaps because much of what Jobs and company unveiled in San Francisco at their "special event" had been the subject of rumor for several days. Apple shares sunk 5.1% on Wednesday to $136.76.

Investors are hoping and some analysts are predicting that Apple's new iPods will reinvigorate sales in time for the holiday gift-giving season. Although iPod unit sales increased a respectable 21% in the third quarter compared with the same frame last year, that's down from the 32% growth Apple enjoyed in the same quarter last year compared with 2005.

Apple executives said Wednesday that the company is on target to sell its 1 millionth iPhone by month's end. Its iTunes online store has sold more than 3 billion songs, 100 million TV episodes and 2 million movies.
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