A touch-screen iPod has been added to Apple's popular line of portable music players.
The gadget also has wi-fi and a web browser on-board so people can buy music when they are out and about.
The device was unveiled by Apple boss Steve Jobs during a press conference that also showed off revamped versions of the other models of music players.
The overhaul comes in time for the key US holiday season when Apple typically sees an upturn in sales of the players.
The iPod touch was the star of the widely anticipated announcements made by Mr Jobs which saw changes made to every music player the company makes.
Owners of the iPod touch will be able to use the built-in Safari browser to surf the web or buy music via the onboard wi-fi iTunes store.
A deal with Starbucks will let people use the wi-fi iTunes store for free while inside one of the company's cafes.
Dedicated icons on the touch screen give access to YouTube or the Google and Yahoo search engines.
The touch screen iPod comes in two versions that have 8 or 16 gigabytes of memory. In the US the smaller device will cost $299 (in the UK it will cost £199) and the larger $399 (£269 in the UK).
As with many Apple products prices in Europe are usually higher than direct comparisons suggest.
The iPod touch will be in shops by the end of September.
Said Mr Jobs: "It's one of the seven wonders of the world - it's just incredible."
Apple also announced that the full-sized iPod will now only be available in 80 or 160 gigabyte versions.
The iPod nano got an overhaul that saw it assume a squarer shape, the ability to handle video and bigger memory. The shuffle is now available in five colours.
Apple is also starting to sell ringtones via iTunes for iPhone owners. An update to iTunes will let them craft their own ringtones for $0.99.
The price of the iPhone with eight gigabytes of storage is being cut by $200 to $399. The four-gigabyte model is being dropped. Currently the iPhone is only available in the US.