Next generation includes iPhone features

Apple unveiled a new line of iPods and slashed the price of its iPhone in advance of what Steve Jobs is obviously hoping will be a huge holiday season.

At a promotional event in San Francisco Tuesday, Jobs announced a new wireless version of iTunes, a series of upgrades to the iPod line, and a partnership with Starbucks to promote wi-fi music downloads in the coffee chain’s stores.

And in a bid to boost sales of its iPhone, which at $599 has thus far sold fewer than one million units primarily to tech-heads with lots of discretionary income, Apple slashed the price of the well received device by one-third, and discontinued a poor selling version with less memory that had cost $499.

“We want to put iPhones in a lot of stockings this holiday season,” Jobs boasted.

Company also unveiled a new, and widely expected, version of the iPod called iPod Touch. It essentially has all of the features of the iPhone except for the phone itself. Jobs also announced that the device’s wi-fi connection will connect to a new wireless version of the iTunes Music Store that will let users download songs wirelessly. A software upgrade to the iPhone will soon let that device do the same thing.

Though a few other devices that allow wireless music downloads are already on the market, none have been able to make a dent in iPod sales. With the addition of wi-fi, Apple has now countered one of the few advantages other device manufacturers have been able to claim.

“‘Finally,’ I know some of you are saying,” Jobs noted when introducing the feature.

Due to the large size of video files, TV shows and movies likely won’t be available for wireless download.

In the wake of NBC Universal’s decision not to renew its deal to sell shows on iTunes due to a pricing dispute, and Apple’s subsequent pulling of NBC’s new fall shows from the service, Jobs made little mention of video at the event, except to note that Apple has sold over 95 million TV shows in the past two years. Event was primarily about music.

Starbucks partnership will see the coffee chain offering free wi-fi access to iPod touch and iPhone users in some of its stores, along with a channel featuring songs that are playing in the store or available through its Hear Music service.

Jobs said Apple has been discussing a partnership with Starbucks for over two years until this wi-fi deal finally came to fruition.

Starbucks will start rolling out the service to wi-fi enabled stores in New York and Seattle in October and continue with other major cities over the next year. CEO Howard Schultz said Los Angeles would be included in early 2008.

Jobs also showed off a new feature in iTunes that will let users create their own ringtones for the iPhone. A select number of songs on the service will be available for users to edit into their own ringtone for an additional 99 cents on top of the song’s price.

“We’re going to do ringtones in our own special way,” said Jobs. “Rather than let somebody else make your ringtones, we’re giving our users a custom ringtone maker.”

Service should spark a reaction amongst competitors in the already health ringtone biz, where pre-made ringtones typically cost $2.49.

Along with the iPod Touch, Jobs unveiled an upgraded version of the iPod Nano, the best selling version of the device, that will play video for the first time.

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