Apple announced overnight a complete change of its line of iPod portable music players and a significant cut in the price of its recently released iPhone.

The iPod Touch, essentially a phoneless version of the iPhone, has the same 3.5-inch screen, multitouch interface and home screen as the smart phone. The iPod Touch has the ability to connect to the Internet with 802.11b/g Wi-Fi, slower than the current 802.11n shipping in most notebook PCs. The Touch comes with Apple's Safari Web browser and has built-in Google and Yahoo search.

The new iPod comes in two configurations, an 8GB version that costs A$419 and a 16GB model that costs A$549. The battery in each can handle 22 hours of audio playback or 5 hours of video, according to Jobs. Both versions are expected to be available this month.

Apple is also revising some of its previous iPods including the regular iPod, the Nano and the Shuffle. Now known as the iPod Classic, Apple will offer a 160GB version of the regular iPod, which is enough storage for 40,000 songs, according to Jobs. It is thinner than the regular iPod and has better battery life, enough to handle 40 hours of audio. That model will go for A$349, and an 80GB version will now be A$479. Those iPods will be available immediately.

Apple is making only minor changes to its iPod Shuffle line, which will come in new colours and is available now for the same price as the previous line. A new Product Red Shuffle will benefit a program fighting AIDS, tuberculosis and malaria.

The iPod Nano will now have video capability, though its screen is only 2 inches wide. It comes loaded with new games and Apple's Cover Flow software, which lets users scroll through album covers when searching for music. The Nano will come in two configurations, a 4GB version priced at A$199, and an 8GB version that will cost A$279. The Nanos will come in the same new colors as the Shuffle and are expected to be available in stores this weekend, according to Jobs.

Jobs also announced news that may irk some early adopters of the iPhone in the United States: the price on the 8GB model has dropped to US$399--a savings of US$200--only two months after the product became available in stores.

iTunes Music Store goes Wi-Fi
On the software side of things, Apple announced a new version of its iTunes media player, which is planned to be released Thursday. A new feature in the updated iTunes allows users to create ringtones from any segment of a song they've downloaded. That service costs US99 cents per ringtone, and does not include the price of the song. The ringtones will be compatible only with the iPhone.

Apple also announced the iTunes Wi-Fi Music Store, which allows consumers to buy songs wirelessly. Users can preview, download and listen to songs right away on their iPod Touch or iPhone (after a software update expected later this month). Upon syncing the device with a computer, those songs will be transferred into the user's iTunes library.

Along with the Wi-Fi Music Store, Jobs announced a partnership with Starbucks in the United States. People with an iPod Touch or iPhone who walk into a Starbucks coffee shop will see a button pop up on their screen. They will then have the option to buy the last 10 songs that have been playing in the store as well as music from featured artists at Starbucks.

CNET.com.au new iPod reviews
Apple iPod Touch

Start saving your pocket money because the new iPod Touch is just like the iPhone except cheaper, thinner and without the phone bit. Oh, and it'll be here by the end of September in 8GB and 16GB flavours.

Apple iPod Nano (3rd Generation)

Cover Flow and video playback are the highlights of the new shorter but wider third-generation. It's here now and better value than ever. It's available in silver, black, blue and green and red.

Apple iPod Classic

The sixth-gen iPod is now branded as the Classic. Bye bye glossy plastic front. Hello anodised aluminium, Cover Flow and a capacious 160GB model.