Apple cuts price of 8GB iPhone, drops 4GB

As we reported yesterday afternoon on our website, Apple has lowered the price of the 8GB iPhone from $599 to $399 and dropped the 4GB iPhone model altogether, citing a clear customer demand for the model with more internal memory. The price reduction seems to be a strategic move as Apple launches WiFi-enabled iPods that look to echo all the features of the iPhone, save the actual phone capabilities. The price reduction marks a $200 price cut: "We want to put iPhones in a lot of stockings," Jobs quipped. Here's more on the WiFi-enabled iPods.

iPod Touch
Looks like there's a new iPod in town--the heavily-rumored, touchscreen-sporting iPod Touch. The form factor looks almost identical to the iPhone and it boasts WiFi, Cover Flow, Multitouch, Calendar, Contacts, Clock, Calculator and a very iPhone-like UI.

iTunes over WiFi
There's one more thing today--the rumored iTunes WiFi Music Store. Accessible from the iPod Touch (and, ostensibly, from the iPhone as well), the WiFi store has the same selection and pricing as its desktop brother and allows you to preview songs in the same manner. Download a song directly to your iPod and you can listen to it right away--sync your iPod with your Mac or PC when you get home and the songs you purchased over-the-air will automatically download to your hard drive.

Apple teams up with Starbucks
Starbucks has been trying to break into the music retailing game for a while now, so it makes sense that they've partnered up with the king of the hill in the digital music game. Walk into any Starbucks and a special Starbucks icon will pop up on your iPod or iPhone. You'll then be able to browse the last 10 songs played in the store and purchase them over-the-air from iTunes. You'll also get free access to the iTunes Store over the in-store WiFi, though I'd assume you can't use the WiFi for anything else. They'll be rolling the service out in most U.S. metropolitan areas by the end of this year, with all Starbucks locations slated to get it by 2009.

For more details and photos of the new iPods:
- read this full write-up