In a rock concert atmosphere complete with celebrities and groupies, Apple chief executive Steve Jobs announced the new products along with a new version of its iTunes online music store that leads the market for song downloads.
The telephone, called "ROKR", developed with Motorola, can hold 100 songs, podcasts or audio book files and has stereo speakers built in, Jobs said.
It also takes pictures, movies and accesses the Internet, according to Ron Garriques, president of the Motorola mobile division.
"The way we think of the phone, really, is that it is an iPod shuffle right on your phone," Jobs said after pulling the Motorola handset from a pocket of his blue jeans. "It's pretty cool."
Cingular Wireless teamed up with Apple and Motorola to provide the mobile network for the music service.
"There have been a lot of rumors," Ralph de la Vega, chief executive officer of Cingular, said in a playful reference to word of the innovation being leaked in August. "Today, the talk ends and the music begins.
"You are going to get your songs on your phone anywhere you want them, any time you want them and we are very proud to be here today."
Jobs also showed off a miniaturized iPod called the "nano" capable of holding 1,000 songs.
The "nano" is new "from the ground up" and "is the biggest revolution since the original iPod", Jobs said to an audience that included former US vice-president Al Gore and renowned cellist Yo-Yo Ma.
The nano is thinner than a pencil and about one-fifth of the size of the original iPod first shipped four years ago, Jobs said, showing off the device.
With the help of an Internet video telephone call to pop legend Madonna in London, Jobs announced exclusive deals to make all of the music diva's songs available at iTunes online store.
"I tried to hold out as long as I could," Madonna quipped. "I got tired of not being able to download my own music."
Madonna's eyes went wide with incredulity when Jobs asked whether she had an iPod.
"That's so duh," Madonna teased. "Which one don't I have. You've got to stop being so prolific. Every time I get a new one, another comes out the next week."
Jobs also touted a similar exclusive deal with British author J.K. Rowling to make all six Harry Potter books available at iTunes.
"With one click you can buy every Harry Potter book," Jobs said. "You could even buy them with a collectible iPod with the Hogwart's crest."
The nano weighs one-and-a-half ounces (42 grams) and has a 14-hour rechargeable battery, according to Jobs. It should be in stores by the weekend, Jobs said.
Four-gigabyte nanos will be priced at $249 and two-gigabyte nanos will retail for $199 each, Jobs said.
"My prediction is this is going to instantly become the most popular iPod in the world," Jobs said of the nano, which will be available in black or white. "And the most popular music player in the world."
By the end of June Apple had sold a total of 22 million iPods and commanded 74 percent of the MP3 player market, Jobs said.
Cars produced in the United States in 2006 will have stereos compatible with iPods, Jobs said.
Jobs showcased an array of iPod accessories, including a lanyard headset, colorful armbands and protective cases dubbed "nano tubes".
Apple's iTunes store had sold more than half a billion songs to date and has the world's largest online music library.
Refined iTunes software was available free online effective on Wednesday.
Since podcasting was launched two months ago the service has grown to more than 7 million subscriptions in 21 languages, according to Apple.
"Podcasting is taking off like a rocket," Jobs said. "That is pretty exciting."
The Apple event finished with a performance by Grammy award winning hip-hop artist Kanye West.
"Thank you for making my life much easier," West told Jobs before starting to sing. "I remember when I had a bag full of CDs. I remember when I had cassette tapes. I guess we've come a long way."
© 2005 Agence France-Presse
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