Apple has unveiled a new version of its iPod music player than can download music directly from the internet without having to connect to a computer.
The company has also announced a significant reduction in the price for its iPhone, which has been selling at great speed in the US.
The new iPod Touch, shown off by Apple chief executive Steve Jobs yesterday, can play music and video, store and display photos, manage a diary and contact list and access the internet. It has no buttons, but is controlled instead via a touchscreen that takes up the entire face. The screen is the same size as the screen on the iPhone, but the device is just 8mm thick.
In effect, the new product is Apple's iPhone without the phone element. It can connect to wireless Wi-Fi networks and the popular YouTube video sharing site can be accessed with a single click on an icon.
As has become customary with Apple, there had been rampant speculation online about what exactly Mr Jobs would announce at the event in California yesterday.
Despite extensive use of imagery and music from The Beatles, yesterday's event did not, as some had speculated, include an announcement that the Fab Four's back catalogue would be available to buy and download from iTunes.
It also launched a version of the iTunes music store that can be accessed from the iPod Touch and the iPhone.
The iPod Touch will be available in two versions - an eight-gigabyte model that will sell in the US for $299 (€219) and a 16-gigabyte version for $399. Mr Jobs also said Apple would ship its one millionth iPhone this month and as a result the price would be slashed on the top-end model from $599 to $399.
It is expected to announce shortly that the iPhone will be available in Britain, Germany and France, with the rest of Europe, including the Republic of Ireland, having to wait until 2008 to purchase one.
Mr Jobs, the co-founder of Apple and the man credited with returning the firm to rude health on the back of the iPod's unprecedented success, has never been known for his modesty and claimed the iPod Touch was "one of the seven wonders of the world".
Although Apple did not provide any specifics on when it would be available in the Republic, Mr Jobs said it would ship later this month.
"This is a worldwide product, the first touch product Apple is going to ship outside the US, it's going to be shipping all around the world," he said.
Apple's blossoming: the story so far
1997: Steve Jobs, Apple co-founder, rejoins the
company as interim chief executive.
2001: Apple introduces the iPod, which quickly becomes the
best selling digital music player.
2003: Apple introduces the iTunes store to sell music
downloads. Subsequently expands into selling films and episodes of
TV series.
2004: iTunes music store introduced to Europe.
2005: iTunes expands into video and 1 million videos are sold
in less than 20 days.
2007: January - After years of speculation, Apple announces
the iPhone (left), a combination music player, internet access
device and mobile phone.
June 29th: iPhone goes on sale in the US.
July: Apple announces three billion songs have been sold
through iTunes.
Sept 5th: iPod Touch launched.