And new units will boast OpenGL ES 2.0 and processor improvements
As well as claiming the lead over Nintendo and Sony in the handheld games race today, Apple also cut the prices of its iPod Touch devices, saying the move will drive App sales.
Calling the iPod Touch "the most affordable gateway to the App Store," Apple marketing VP Phil Schiller said that the device would now be at the 'magic price point' of $199 in the US.
That's for an 8GB model - there'll be a 32GB model for $299, and a new 64GB model for $399.
The two higher-price models will have faster processors and OpenGL ES 2.0m aking them "50 per cent faster at nearly everything you do" said Schiller. The move also brings the iPod Touch family into line with the iPhone 3GS.
He said that the firm "learned something really important a few years back in the iPod business" referring back to the iPod mini - its sales doubled when it dropped to $199.
Apple is expecting the same to happen with the the device now it is cheaper - and that this in turn will drive sales of apps, including games, on its App Store.