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iPod: You Tempted to Touch?

SAN FRANCISCO -- If Tower Records weren't dead before today's news from Apple and Starbucks, it would have been once it found out the companies have teamed up to sell music wirelessly.

The long-rumored iPod based on the iPhone came true as Apple  CEO Steve Jobs today introduced iPod Touch, a slimmer version of the iPhone minus the telephone but with audio, video and Internet capability.

While you can't make calls with it, the iPod Touch will have 802.11b/g wireless networking, and Starbucks founder Howard Schultz was present to announce that if you walk into a Starbucks with one of those sleek little devices, it will automatically tell you what songs are playing and let you buy music.

iPod Touch
It's got everything but a phone.
Source: Apple

"One of the most common questions asked of our employees at Starbucks is what song is playing," he told the gathered crowd, about half of which were Apple employees. "We think we will drive incremental traffic onto our stores and be a place where people can discover music. When I was a kid, you discovered music on radio. These days it's hard to discover new music on the radio."

Starbucks has already become a force in the music industry, winning eight Grammies for its productions, including Album of the Year for the late Ray Charles's final record, "Genius Loves Company." Music is sold at the stores and is always being played, but the employees never had time to tell customers what the song was.

The iPod Touch, with its Wi-Fi, will do all that. It will tell the customer what song is playing, as well as the last 10 songs played in the store, and users can purchase the song for $.99 cents with one touch of the screen. When users return home, their iPod will synch up with iTunes on their computers to make a copy of the song.

The iPod Touch will be just 8mm thick and slightly smaller than an iPhone. It will have the same touch-screen interface, the same picture and video playback features, plus it will come with the Safari browser for Internet access. "We think it's one of the seven wonders of the world," said the usually immodest Jobs.

iPod Touch
Slightly slimmer than the iPhone.
Source: Apple

The iPod Touch comes in two configurations: an 8GB version, which will sell for $299, and the 16GB version, which will run $399. Both have 22 hours of audio battery life, or five hours of video playback.

The iPod Touch was the cap of the big news of the day, but it wasn't alone. Jobs announced a huge price cut for the iPhone sure to anger all those who rushed out and bought one. He noted that the 8GB version of the phone was vastly more popular than the 4GB version, so the 4GB version is going away and the 8GB version, which sold for $599, will now sell for $399, a 33 percent price cut.

The iPhone has been on the market for just over a month and is already the best-selling smartphone in the country, but this $200 price cut is bound to make some customers mad. Apple officials declined to comment. The 4GB version of the iPhone is expected to be phased out once existing stocks run out, but Apple could not say what the price would be.

"People expect prices of these gadgets to eventually drop, but this is a bit steep," admitted Van Baker, research director for Gartner.

Apple made a bunch of announcements covering its entire iPod product line. First, it announced that more than 500,000 songs would be available to be turned into ringtones for the iPhone. They will appear in iTunes with a bell icon, indicating the song can be edited into a ringtone. It will cost $.99 cents to edit the song, on top of the cost to purchase.

An updated version of iTunes will come with the option to slice any 30 seconds out of the songs to turn them into a ringtone. Only a song approved for ringtone usage can be edited. At one point, Jobs played John Lennon's "Give Peace A Chance" and joked to the audience "That's the one you play when NBC calls."

He was referring to a split between the two companies in recent days, where NBC stopped selling its TV shows through iTunes. It's now selling its content through Amazon's Unbox service.

Apple is adding a (Product) Red item to its linueup. (Product) Red is a charitable organization where profits from red items go to AIDS and other disease relief in Africa.

iPod Touch
The shorter, wider iPod Nano.
Source: Apple

The iPod Nano is getting an overhaul of its own. It's now shorter and wider, with a two-inch screen and the same 320x240 resolution as a standard iPod. Jobs said it would come with the highest pixel density of any device Apple has ever made, 204 pixels per inch.

New software will allow for album artwork to be displayed like in iTunes for browsing by cover. There will also be some games, including a Sudoku game developed by Electronic Arts. The iPod Nano will have 24 hours of audio battery power or five hours of video playback.

The 4GB version, available only in silver, will be $149. The 8GB version will be available in five different colors, like the Shuffle, and sell for $199.

The iPod Shuffle will remain unchanged, but it is getting new colors. The technology and price remain the same at $79.

The standard iPod, which Jobs noted never had a suffix on it because it was the first, now has one: iPod Classic. The Classic is getting a minor physical overhaul and a huge increase in storage. Instead of 30GB and 80GB versions, the Classic will come in 80GB and 160GB configurations, yet both will be thinner than the current 30GB version.

The 80GB will have 30 hours of battery life for audio or five hours for video, while the 160GB version has 40 hours of audio battery or seven hours of video. The 80GB version used to sell for $349 but now sells for $249, while the 160GB version will sell for $349.

All of the new iPods will be in stores by this weekend, except for the iPod Touch, which will be in stores by the end of the month.

Baker was impressed with the scope of the news. "This is their most aggressive product line refresh ever. There are no holes in the product line now," he said.