Apple cuts iPhone prices, unveils new iPods

Apple today announced it is cutting prices on the 8-gigabyte iPhone by $200 and discontinuing the 4-gigabyte model. The company also introduced an iPhone look-alike, iPod Touch, the latest media player that has wireless Internet access and other iPhone features.

At a media event in San Francisco, Apple Chief Executive Officer Steve Jobs said the iPhone price cuts were intended to encourage holiday gift-givers to think of Apple. The 8-gigabyte iPhone will now sell for $399, which was the former retail value of the 4-gigabyte model that is currently being phased out. The new iPod Touch will be sold for $299 for the 8-gigabyte version and $399 for a 16-gigabyte model.

The iPod Touch features the same thin, touch-screen as the iPhone and is less than one-third inch thick. It can store photos, music, videos and digital data. The device also comes set up with Wi-Fi access and includes the Safari Web browser and Google and Yahoo search engines—essentially all the features of the iPhone except the ability to place and receive calls.

Owners of the iPod touch will be able to wirelessly download songs and ringtones for 99 cents a tune. And coming soon, Apple is partnering with Starbucks to expand the iPod Touch’s wireless capabilities to any Starbucks in the U.S. that offers Wi-Fi access. Beginning Oct. 2, 600 stores in New York and Seattle will have this capability, growing to include all U.S. Starbucks by the end of the year.