New, cheaper iPod launches retail war

The iPod has revolutionised the music industry and become one of the first design icons of the century, but Apple has been forced to launch an improved version to fight off numerous competitors.

From today millions of people who paid up to £400 for one of the digital music players will find that it is already outdated, in a battle for market domination that looks set to eclipse the VHS versus Betamax war in the Eighties. The iPod, which stores thousands of songs digitally, has been a huge success with more than three million sold.

But yesterday in a move that took Apple's own staff by surprise, the company announced the launch of the iPod Series 4, smaller and £100 cheaper than the current product.

The move follows plans by Sony to launch a digital version of the Walkman personal stereo that will also allow music to be downloaded from computers. Philips and Samsung are also producing similar digital music players.

At the moment iPods have a 70 per cent share of the music download market. The recently launched Apple online music shop allows iPod owners to download their favourite songs for 79p per track.

It is hoped that the upgraded iPod will silence critics who claimed its success was more due to clever marketing and appealing design than sheer functionality.

Rival products are generally cheaper and often boast additional features such as FM radio tuners, removable batteries and longer play-time.

One of the biggest drawbacks of the iPod has been its eight-hour battery life compared with Sony's promise of 30 hours for the new Walkman. The rechargeable batteries also began to lose their life after as little as 18 months and have forced Apple to launch a replacement programme.