SAN FRANCISCO (AFP) - Apple on Wednesday cut the price of its hot-selling iPhones and unveiled a slick touch-screen iPod as part of a bold product line overhaul aimed at boosting year-end holiday season sales.

"I think it is a deep and complete line-up," Jupiter Research analyst Michael Gartenberg told AFP after watching Apple chief executive Steve Jobs introduce revamped iPod models and the new iPod Touch.

"A lot of consumers said they don't want a new mobile phone but they want all the other stuff the iPhone has."

Apple's tinkering with its money-making iPod line was done shrewdly, with the company adding video, memory or other coveted features while not pushing up prices, according to analysts.

"Apple has models with a range of appeal -- fashion, function, price," Gartenberg said. "Apple has set the bar high for competitors."

IPod Touch models feature Apple's Safari web browser and a built-in wireless antenna, meaning users can connect directly to the Internet at Wi-Fi "hot spots" the same way they might with a laptop computer.

Apple built custom Google and Yahoo search functions into iPod Touch models, along with YouTube video viewing and an iTune Wi-Fi Music Store that permits shopping at the online store without going through a computer.

Eight gigabyte iPod Touch models are priced at 299 dollars and 16 gigabyte models at 399 dollars.

The iPod Touch models have been localized to an array of languages and will be the first part of the new product line to ship worldwide, according to Jobs.

"I want an iPod Touch," said British musician K.T. Tunstall, who performed at the press conference.

"Steve Jobs is actually making it more fun to pay for music than steal it, which is great."

IPod Touch will be available by month's end in an eight-gigabyte model priced at 299 dollars and a 16-gigabyte model priced at 399 dollars. The devices are essentially iPhones without the mobile phone capabilities.

"We think it's one of the seven wonders of the world," Apple's chief executive Steve Jobs quipped as he pulled a new iPod Touch from a pocket of his trademark blue jeans during the San Francisco press conference.

"If you've used an iPhone you will feel very much at home."

Apple is cutting the price of the popular eight-gigabyte iPhones 200 dollars to 399 dollars in a surprising move that some analysts at the event said could give the California company "a lock" on the market.

"Apple is being bold and aggressive, which is in keeping with its style," Gartenberg said.

Apple's overhaul includes matchbook-size iPod Shuffles in new colors and iPod Nanos built with video and game capabilities.

A four-gigabyte Nano is priced at 149 dollars and eight-gigabyte models are priced at 199 dollars. Nanos are the most popular model in the iPod line and users clamored for the addition of video-viewing capability, Jobs said.

Jobs officially christened the original iPod model the "Classic" and said it would be available in 80 and 160 gigabyte models, enough memory capacity for users to take entire video or music collections with them daily.

Jobs also announced that Apple has an alliance with Starbucks to let iPod Touch or iPhone users link wirelessly for free to iTunes Wi-Fi Music Store at any of the ubiquitous chain's coffee shops.

When iPod Touch or iPhone users near a Starbucks store, a special icon will appear on the iTunes music store page and enable people to buy whatever song is playing at the coffee shop for the standard 99-cent price.

The Wi-Fi iTunes store will be added to iPhones as a software update later this month, according to Jobs.

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