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Apple Flaunts New iStuff

By Mike Musgrove
Washington Post Staff Writer
Thursday, September 6, 2007

It has finally come to pass: iPod users waiting for their decaf cappuccinos at the local Starbucks will be able to wirelessly download that latest Norah Jones song while standing in line.

In a flurry of announcements to spruce up its line for the holiday season, Apple said yesterday that it was transforming its music player into a multimedia Web surfing device, adding WiFi access, among other features, to its latest version of the iPod.

Apple also lowered the cost of its iPhone by $200, after launching in June to hordes of people waiting to pay $500 to $600 each.

Some tech pundits tried to read meaning into the price cut.

Roger Kay, president of Endpoint Technologies, said he wondered whether it meant there has been less demand than anticipated for the iPhone. "To lower the price so much . . . after introduction -- that's such a huge drop you have to think that was not a planned maneuver," he said. "That raises quite a red flag."

Since 2001, Apple has launched six generations of iPods, selling more than 100 million. The latest iPod model, called the iPod Touch, will look and work much like the company's smartphone, minus the phone. As with the iPhone, users work its controls work by tapping and brushing the screen.

Apple its refreshed its entire music-player line, which was unveiled during a presentation in San Francisco by chief executive Steve Jobs. A new version of the iPod Nano comes in a different shape and new colors, and comes with games and video playback capability. A $349 model of what the company now calls the "classic" iPod comes with 160 gigabytes of memory, or twice the previous top capacity for the device.

Most of the new iPod lines shipped yesterday and should be in stores by this weekend, Jobs said. The iPod Touch will be available later this month, he said.

"At this point, it looks like it's going to be a good holiday season for Apple, and its competitors are going to be on the defensive yet again," said Michael Gartenberg, an analyst at the research firm Jupiter who attended the event. Wall Street seemed to disagree: Apple's stock fell $7.40, to $136.76.

At least one competitor has already taken the defensive stance. Yesterday, Microsoft said it would lower the price on its slow-selling Zune by $50. The 30-gigabyte version of that device now costs $200.

Apple didn't comment on the reason for slashing the price of the iPhone, except to say it was on track to sell its 1 millionth unit by the end of the month. It had said its goal was to sell 10 million through 2008.

Jobs also introduced one service that owners of its iPhone have been clamoring for: Custom ringtones, for 99 cents per track.

While introducing the service, Jobs made a crack about Apple's recent fallout with NBC.

The network tried to negotiate more money for the shows it has made available through the iTunes service when the contract runs out in December; Apple responded this week by keeping NBC's new season off iTunes.

Jobs played a snippet of the John Lennon song "Give Peace a Chance" as a ringtone.

"That's [for] when NBC calls," he said.

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