The new 4th generation iPod has been released by Apple. I was waiting to buy one because everybody thought this generation would have color screens and be able to play video. In reality, all they did with this new "generation" was to get rid of some buttons, improve battery life, drop the price, and update the menu. I may still buy the 40GB one through the education store for $359. But I have nowhere near that much music, so I may opt for the $259 20GB iPod even though it doesn't come with the docking cradle.

The $299 price point for the 20GB iPod model makes the 4GB iPod mini (priced at $249) a much less attractive option. It's not much smaller in size, but has significantly less storage for music. In the future, it's going to be hard for Apple to maintain their lead in hard-drive MP3 players. MP3 players are likely to become commodity items, especially as the big players like Dell improve their interface and style.

I imagine these new prices won't help Apple's bottom line. A big chunk of their profit is generated by the iPod--so they are likely to take a hit with a $100 price drop on the units.