Apple on Tuesday introduced a 1GB version of its iPod nano that sells for £109 (inc VAT). The new model is being offered alongside its 2GB and 4GB siblings, which cost £139 and £179. Apple also cut prices on its entry-level iPod Shuffle, making them more affordable.

The new 1GB iPod nano has the same features as the 2GB and 4GB models already in circulation -- it sports a color screen and 30-pin dock connector, and works with Macs or Windows PCs using USB 2.0. The new nano also comes in both black and white exterior colors.

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"It [the Shuffle] makes joining the iPod revolution a very easy decision to make," Greg Joswiak, Apple's vice president of worldwide product marketing for iPod, told Macworld.

Apple said the iPod Shuffle has proven to be a very popular product for them -- the company even sold out of the Shuffle during the Christmas shopping season.

With three distinct iPod product lines, Apple has continued to foil its competition's plans to overtake them in the market. The reason for this, says Apple, is more than just the iPod.

"It's relatively simple," said Joswiak. "We have world class hardware, software and services -- it's rare for a company to have one of those, but we have all three. We can bring products to market quicker and we can move faster than competition because we control everything. It's a difficult equation for our competitors to match."

The iPod nano replaced what Steve Jobs said was the most popular iPod in Apple's arsenal -- the iPod mini. Even with the mini gone, Apple's iPod sales have continued to increase steadily.

"In the first 3 years we sold 10 million iPods; last year alone we sold over 30 million iPods, with 14 million being sold in the holiday quarter. The nano has been an unbelievably popular product for us," said Joswiak.