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Apple easily overshadowed the anticlimactic confirmation of the first iTunes compatible phone - the Motorola ROKR E1 from Cingular Wireless (see iTunes Phone Launched ... Finally) - yesterday with the unveiling of its newest music player, the iPod nano.

You might say the mobile music and home PC pioneer's strategy with its new iPods may have drawn inspiration from one of Steve Martin's old comedy bits: "Let's get small." Remarkably, iPod nano is about a third the size of the other major MP3 players on the market.

"Today we're doing something pretty bold," stated Apple CEO Steve Jobs. He said despite the fact the iPod mini is the most popular MP3 player in the world, and the main iPod competitors are gunning for, Apple decided to replace it with a new design.

The iPod nano is less than the thickness of a pencil and, as Jobs demonstrated, fits easily in the tiny pocket watch pocket of a pair of jeans. It also weighs a mere one and a half ounces or less than two quarters.

Thanks For The Memory … Flash Memory
But unlike Apple's other small player, the $99 iPod Shuffle, nano sports a color display and a click wheel for navigating song selection. Slated for immediate availability, iPod nano comes in two versions, $199 with 2GB of storage, or $249 with 4GB memory capable of holding 500 to 1,000 songs, respectively.

And whereas iPod mini's leverage miniature hard disks -- known as Microdrives -- for memory, with nano Apple takes advantage of falling solid-state memory prices to offer similar capacity levels in a storage format without moving parts. That should better long term reliability and improved battery life.

Cute touch: optional accessories for the iPod nano include multicolored protective covers called nano Tubes. Apple also is offering the iPod nano in black and the standard white.

Music Milestones
Jobs ticked off several sales milestones for iPod and iTunes at the press conference.

He said iTunes is the world's biggest online music store with over two million songs available. The company started with 200,000 at its debut, and has since sold some half a billion songs worldwide to some ten million credit card accounts. Conceding that it's hard to get exact numbers, Jobs boasted Apple's iTunes store may be the second largest ecommerce site behind Amazon.

Moving to push that number higher, Jobs announced several content exclusives. The iTunes store will carry audio versions of all the "Harry Potter" books and all fifteen albums of songs by Madonna who participated in the event via a live video hookup using Apple's iChat.

Madonna had resisted making much of her work available through online downloads, but said she decided to go with Apple because "I got tired of not being able to download my own songs."

Are iPods PDAs?
iPods have long offered very basic personal digital assistant (PDA) personal information management (PIM) functions, for Mac users. So if you own an Apple desktop you could use these wildly popular music players to sync data from the Palm desktop, Microsoft Entourage and iCal.

With the release of iTunes 5, Apple finally delivers this functionality to Windows desktops. As a result, Windows-PC-using iPod owners can now sync their address book and calendar entries from Microsoft Outlook to their MP3 player. Outlook Express users can transfer date book information only.

Since you still can't add data to your iPod directly—and therefore reverse the synchronization process, from player to desktoip—iPods are still a long way from becoming full-fledged PDAs.

Nonetheless, a highly functional iPod/PDA hybrid (SmartPod, anyone?) moved significantly closer this week with the introduction of iTunes 5, bringing a Mac only synchronization capability to Windows desktop users for the first time.