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Apple CEO Steve Jobs introduces the new Apple iPod Touch in San Francisco on Wednesday.

Apple eats its young – again

MATT HARTLEY,  Globe and Mail Update

Some are calling it a "mobile internet device," while others have tentatively dubbed it a "digital lifestyle device," but no matter what it's called, the new iPod Touch from Apple Inc. is a market-changing piece of technology that has analysts and tech geeks alike buzzing about its potential.

The iPod Touch incorporates the touch-screen user interface from Apple's iPhone but will also feature WiFi wireless networking capabilities and a full Safari browser.

"Every time the competition starts to zero in on Apple in the music player market, they move the target and change the rules of the game," Gartner Inc. analyst Van Baker said. "They believe absolutely in eating their young; they're going to replace their products before they give the competition a chance to replace their products."

Mr. Baker said the new iPod line is the strongest batch of products Apple has ever had.

Mr. Baker said the lineup should give Apple a lift heading into the busy holiday shopping season, which is typically the strongest for the company's sales. "This is a new category that a lot of people are talking about that is, for lack of a better label, a mobile Internet device," Mr. Baker said. "This makes this [the iPod Touch], in essence, a new category."

Apple chief executive officer Steve Jobs unveiled the new flagship iPod at an invitation-only event in San Francisco Wednesday as part of an entirely redesigned lineup of the popular music playing devices.

Although the devices won't be ready to ship until the end of September, Apple already has the products for sale through its Canadian online store. The eight-gigabyte iPod touch will run consumers $329 while the 16-GB model costs $449. However, some analysts said the relatively low storage capacity could initially hurt sales of the Touch as it competes for market share against the other iPods.

To complement the Touch's wireless capabilities, Mr. Jobs also announced the launch of an iTunes WiFi music store, as well a new feature where consumers can create custom ring tones for iPhones using songs purchased from the music service. Although it will cost users an additional 99 cents (U.S.) on top of the price of the song to create the ring tone.

In addition to the Touch, Apple beefed up its standard iPod model — now called the iPod Classic — by doubling the storage capacity and slashing the price. A stouter version of the iPod Nano, capable of playing videos and dubbed the "iPod Phatty" by bloggers, was also revealed.

Apple has sold more than 100 million iPods since the first-generation devices hit the market in 2001. Although the company has tweaked and repackaged the iPod over time, analysts are calling the near-total revamping of the Cupertino, Calif.-based company's signature product line an aggressive move designed to bolster sales and position Apple one step ahead of competition from products like Microsoft's Zune player.

Wednesday's announcement proves that Apple is number one in the digital device market for a reason, Yankee Group analyst Josh Martin said.

"Apple really needed to innovate on their high-end device and people were waiting for a long time for a lot of those iPhone features to be incorporated into the iPod," Mr. Martin said. "This was definitely an opportunity for Apple to reinvent what a digital audio player is … if you can even call it that any more."

By developing a new platform running an Apple operating system, the company has created a new means of reaching and maintaining consumers, according to Jupiter Research analyst Michael Gartenberg.

"It may very well be the ultimate Trojan Horse device along with the iPhone," he said. "You've got a whole new platform architecture here and lots of blank spaces for icons for Apple to deliver new levels of service and function, of course, for profit. So it will be interesting to see how that evolves over time."