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Apple Unveils iTunes Phone, New iPod

New York — Apple and Motorola announced a widely anticipated combination mobile phone pre-installed with its iTunes music software last night.

The GSM phone, called Rokr (pronounced “rocker”), will be available in the United States through Cingular for a suggested $249.99 with a two-year commitment.

It can store up to 100 songs in the AAC format. A dedicated music key allows users to switch between listening to music and placing a call. Music will pause automatically on an incoming call.

The phone features a color display, dual built-in stereo speakers and stereo headphones that double as a mobile headset with microphone.

Music can be downloaded to the phone via USB using Apple’s iTunes software. Cingular will not offer a cellular music download service with the phone.

Apple also announced a replacement for the iPod Mini in the iPod nano. Available immediately in 4GB and 2GB capacities for a suggested $249 and $199, respectively, the nano is “thinner than a standardNo. 2 pencil” and weighs in at 1.5 ounces, Apple said.

The nano features Apple’s click wheel navigator, a color screen that can display digital images, 14-hour battery life and will work with all iPod and iPod mini accessories. It will also offer a world clock and stopwatch screen applications.

At a press conference introducing the new products, Apple’s CEO Steve Jobs hailed the success of iTunes, claiming it owned 85 percent of the digital music market, having sold 500 million songs.