Apple

The iPod touch can do almost everything the iPhone can (except make phone calls).

While most companies with new products put out a press release, Apple pulls out all the stops.

They send out a cryptic invitation to hand-picked journalists.

They hire out a big hall.

And the pundits usually aren't disappointed.

Apple's chief cheerleader Steve Jobs took the stage Wednesday to announce a fresh lineup for its market-leading iPod music players and a surprising new price point for its revolutionary iPhone.

The iPod touch was the major new product. It looks very much like Apple's iPhone, but slightly slimmer (and without the phone functions).

As the name implies, the touch is operated by a 3.5-inch touch screen using technology borrowed from iPhone. The two touch models—with 8GB of storage ($299) and 16GB of storage ($399) will be shipping later this month, Jobs said.

"It's one of the seven wonders of the world, it's just incredible," Jobs told employees and journalists gathered at the special media event.

The touch will incorporate both wireless Wi-Fi access and a full-featured Internet browser, first-time options for any iPod. Both the touch and iPhone will sport new buttons that will appear whenever the unit is within range of a Starbucks coffee shop. The button will let the user wirelessly purchase music that's playing in the background.

In what may be the biggest shocker of the day, Jobs announced that the price of the 8GB iPhone will be immediately slashed by one-third—from $599 to $399. The 4GB model will be phased out.

"We want to put the iPhone in a lot of stockings this holiday season," Jobs said.

Apple's CEO said the other familiar members of the iPod family will remain, but with some changes. The "classic" iPod gets a full metal case and extra storage, up to 160GB (for $349)—enough to hold 40,000 songs. This model is available today.

Apple

The new nano gains a squarish shape.

The iPod nano also remains in the lineup, but it loses its rectangular form factor in favor of a squarish profile. The nano gains a sharper, larger, 2-inch screen and the ability to store and play up to five hours of video clips, something only the "classic" model could do previously.

"It's incredibly tiny. It's incredibly thin," Jobs said of the new Nano, which features a 320-by-240-pixel screen with 24 hours of audio playback. "We think it's really, really beautiful."

The new nano hits stores this weekend, with two models priced at $149 (for 4GB) and $199 (for 8 GB).

The lowest-priced iPod, the shuffle, will continue to be available, in four new colors but the same old price, $79.

Jobs also said that the iTunes store would be updated later today to offer 99-cent ringtones to iPhone users based on more than 500,000 songs (you also have to buy the song at 99-cents to create a ringtone from it).

Early Wednesday afternoon, the online Apple store continued to display a "We'll be back soon" virtual Post-It note. "We are busy updating the store for you and will be back shortly," the note says.

The Associated Press contributed to this report.

E-mail askwalt@wfaa.com