The company is also dropping the 4-gigabyte version of its iPhone, which was priced at $499. Instead, it will offer only the 8-gigabyte model at $399, which is $200 less than its original price.

The new full-screen iPod looks a lot like the iPhone and is the first to boast a WiFi antenna, which will enable users to wireless connect to the internet – and buy songs from iTunes. Dubbed the iPod Touch, it has a touch-screen display similar to the iPhone’s, is less than one-third of an inch thick and boasts Apple’s Safari web browser.

It comes in two flavors: an 8-gigabyte model for $299 and a 16-gigabyte model for $399.