Steve Jobs is blurring the lines between the iPod and iPhone.
Apple yesterday unveiled a new iPod that looks and acts much like the popular iPhone, and at the same time slashed the price of the iPhone by $200 in a bid to boost the appeal of both devices and bring them closer together in price.
The moves headlined a top-to-bottom overhaul of Apple’s wildly popular multi-media players ahead of the holiday shopping season. The revamp also included a new video-capable iPod Nano, increased memory and a sleeker body for the original iPod, now dubbed the iPod Classic, and a new ringtone store in iTunes for iPhone users.
The newest iPod, dubbed the iPod Touch, looks quite similar to the iPhone, right down to the celebrated wide touch screen, and does virtually everything the iPhone does – except make calls. Most notably, the new gizmo can connect to the Internet using a built-in wireless antenna and Wi-Fi technology.
The Touch, which hits stores later this month, comes in two versions: a 16 gigabyte (GB) model for $399 and an 8 GB model for $299.
Meanwhile, in an effort to keep the Touch from eating into iPhone sales, Apple also cut the price of the two-month-old 8 GB iPhone to $399, down from its initial $599, and below the $499 4 GB iPhone, which is being discontinued.
Users of both iPhones and the iPod Touch will be able to buy music wirelessly through a new version of iTunes designed specifically for use with Apple’s Wi-Fi-enabled devices.
Though iPod fans and technophiles are likely to cheer at the new iPod and a lower priced iPhone, the unveiling of both spooked investors, who sent Apple shares down more than 5 percent to $136.76 on concerns that a price cut for the iPhone, combined with a copycat device on the iPod side, signals tepid demand for the mega-hyped iPhone.
What’s more, investors were not convinced by bullish views from the likes of Piper Jaffray and Bear Stearns, which positioned the strategy as a more palatable price for the iPhone and a vote of confidence by Apple in the mobile business.
In what figures to herald a wave of new opportunities to sell digital music in physical retail environments, Apple and Starbucks have cut a deal that will allow iPhone and iPod Touch users visiting the coffee giant’s locations to identify and download songs playing in its stores.
Some of the most dramatic changes are coming to the iPod Nano, the most popular version of the iPod that Apple sells. The tiny device has been given a new shorter, squatter body with a two-inch screen capable of playing movies, TV shows, games and other video.
The Nano, as well as the updated version of the traditional iPod, now called the iPod Classic, both feature the traditional “click wheel” navigation system as opposed to the touch screen interface used by the Touch and the iPhone.
The new Nano costs $149 for 4 GB of memory and $199 for 8 GB. The updated Classic costs $249 for the 80 GB version and $349 for the 160 GB model.