Apple Lowers the Price Bar

The company unveils a cheaper nano and drops the price tag on its shuffle players.
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Just a weeks ago, a failure by Apple Computer (AAPL) - Get Report to tweak its iPod music player line at its annual Macworld confab was nervously seen by some investors as a hint that the current lineup and pricing would be responsible for continuing to drive spectacular revenue growth.

Put those nerves to rest.

Apple unveiled the third member of its popular nano series on Tuesday with a 1-gigabyte player selling for $149, providing a cheaper alternative to its 2-GB and 4-GB siblings, which sold in a range from $180 to $250.

The new 1-GB nano holds up to 240 songs or 15,000 photos.

In addition, Apple cut prices by about one-third on its iPod shuffle lineup -- the 512-MB player is now priced at $69 while the 1-GB player sells for $99.

Investors seemed comfortable that the price-cutting was no indication that the company's more affordable players had reached a saturation point. The company's shares were recently up 94 cents, or 1.4%, to $68.24.

However, the stock has been slumping and is well off its 52-week high of $86.40, set after the company stirred up enthusiasm at Macworld with the early unveiling of its

Intel

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-based iMacs.