Steve Jobs took the stage at San Francisco's Moscone West expo center promptly at 10:00 AM Wednesday morning, to thunderous applause from the crowd. 
"Today we're here to talk about music," Jobs said.
"We've distributed 600 million copies of iTunes so far, and customers hve bought and downloaded over 3 billion songs from iTunes. iTunes is the number one online music store in every single one of the 22 countries it operates in," he explained. "We started with just 200,000 songs and we have over 6 million songs in every single one of those stores."
Jobs told the audience that the iTunes Store -- now the number three music retailer in the U.S. behind Wal-Mart and Best Buy, carries over 550 television shows and has sold 95 million TV shows to date. The service features links to over 125,000 podcasts, with more than 25,000 of them featuring video.
"This last stat I want to share with you blew my mind. In the US, of all the music releases in 2006, 32 percent were digital only releases," said Jobs. "They were not released on a CD. Wow. Look how far we've come: A third of the music released in this country was not on a CD. So that gives you a feeling for how far we've coming in the last 5 years in the digital music revolution."
Jobs revealed that Apple plans to release a new version of iTunes on Wednesday evening that will support the products that are being announced Wednesday -- the biggest new feature in iTunes will be ringtone support for the iPhone.
"We're going to do ringrtones in our own special way," explained Jobs. "And, of course, these are for the iPhone. And what we want is rather than having someone make ringtones for us, we're going to make a custom ringtone maker. We're going to build it into iTunes, and you can make ringtons from many songs available on iTunes including some songs you've already purchased."
Jobs compared iTunes ringtones to the competition, which cost up to US$2.49. "Our ringtones, make 'em yourself, you pay another 99 cents to make the ringtone," he said."
Jobs demonstrated how the new feature works using Aretha Franklin's classic soul number "Respect." All of the songs on the iTunes Store that are "ringtonable" will feature a bell icon column in the music list. You click on the bell, the ringtone maker pops up, and you can click and drag to find the part of the song you want to use as a ringtone. iTunes creates a new file in the ringtone folder, and a new tab in Tunes then lets you decide what to sync to your iPhone.
Jobs played "Give peace a chance," and then added, "That's [for] when NBC calls," referring to Apple's recent dispute with the TV network, which said it will end its partnership to publish shows on the iTunes Store in December.
iPod news
Jobs said that Apple has sold 110 million iPods to date. "The place when the sales curve is strongest is the holiday season," said Jobs. "We're approaching the holiday 2007 season and we want to get ready."
"Today we're going to refresh or replace every product in the lineup," said Jobs.
The iPod shuffle is being updated with "some really nice new colors," said Jobs. Apple is also adding a Product(red) shuffle model, with proceeds going to help fight diseases in Africa.
"Now let's move on to something more substantial: The iPod nano," said Jobs.
The iPod nano is the most popular music player in history, said Jobs. People love it, he added, but Apple wnated to make it better based on customer feedback. New features of the redesigned iPod nano include the ability to watch video on a larger, brighter display. The new iPod nano also features Cover Flow, the ability to scroll through album artwork visually. What's more, the new nano also has games support, more storage features and a full metal design.
The redesigned iPod nano comes in five colors -- red, black, silver, blue and green. "It's incredibly tiny, it's incredibly thin," said Jobs.
The iPod nano now features a 2.0-inch display that features the same resolution as the previous-generation full-sized iPod: 320 x 240 pixels. "We've achieved this with a screen with the highest pixel density we've ever shipped: 204 ppi," explained Jobs. "And the screen is just gorgeous. We you see it you're going to really love it."
The user interface has been enhanced on the iPod nano -- the left side has the traditional iPod menu, and on the right, a preview of what you're selecting. Jobs also indicated that the new iPod nano ships with three games -- Vortex and Sudoku were both named specifically.
Jobs demonstrated the iPod nano playing video by watching an episode of The Daily Show featuring John Hodgman, the actor who appears as the PC in Apple's "Mac and PC" television ads.
Jobs said the new iPod nano provides 24 hours of audio and five hours of video playback on a single battery charge.
The redesigned iPod nano comes in two versions -- a 4GB version in silver, for $149, and 8GB version in colors, for $199.
"These new nanos have left our factories already. They shipped Wednesday, they're on planes, they should be in stores by this weekend," said Jobs. "'A little video for everyone'" is our new line.
The 'classic' iPod
"Now the iPod's got a funny name," mused Jobs. "It's just called 'the iPod' because it was the first one. We though, 'It's time to give it a name.' We're going to call it the iPod classic."
The new iPod still features a click wheen, and it's now in a full metal design in silver and black. The low-end iPod classic (at 80GB) is now thinner than the 30GB thin model that preceded it. Jobs claims the new iPod gets 30 hours of audio playback and five hours of video plaback on a single charge.
Like the iPod nano, the new iPod classic features an enhanced user interface.
Apple is also offering a model that features 160GB of storage.
"This boggles the mind," said Jobs for emphasis. "The first iPod put 1000 songs in your pocket. This new iPod puts 40,000 songs in your pocket. It's amazing."
The new 80GB model costs $249, while the 160GB model costs $349, with availability beginning Wednesday.
The iPod Touch
"You know, when we introduced the iPhone in January, we said it was the best iPod ever. And iPhone owners agree with us. It's incredible, with its multitouch UI, its incredible album artwork and video, it is the best iPod ever," said Jobs. "And people have been wondering, when are we going to bring this tech to the iPod? The answer is, we're going to do it today, and this is what the product looks like."
Jobs revealed a new iPod model that looks exactly like the iPhone, but without the ear speaker slit. It's the same size as the iPhone, but 8mm thinner, according to Jobs, who said, "We think it's one of the Seven Wonders of the World."
The iPod Touch sports a 3.5-inch widescreen display, and along its bottom run music, video and photo icons. "Just like the iPhone, this is the best way to share photos on a portable device ever," said Jobs proudly.
The iPod Touch's button-driven interface also showed icons for a calculator, contacts, clock, calendar and settings icons. What's more, the new device has Wi-Fi -- the iPod Touch is the first iPod to feature wireless networking capabilities, with support for 802.11 b and g networks.
"Others have done this and have failed," said Jobs, referring to wireless networking -- and perhaps making a casual swipe at Microsoft's 'iPod killer,' the Zune. "We think we know why it's failed. What's the problem with adding Wi-Fi? Part is getting on Wi-Fi itself."
"When you're at home, you might need a password. When you're in the office, you might have a password," said Jobs. "But everywhere in between can be challenging. You go to any hotel, and to log in, they throw up a Web page. Portable devices don't know how to deal with Web pages. You go to an airport, you'll see a Web page. Even walking through Stanford University, to use their wi-fi, you have to log into a Web page."
The solution, said Jobs, was to add Safari to the iPod touch.
"So you can view all those Web pages, zoom in, log into any wi-fi network pretty much. But beside that, you get an incredible Web browser ... the best Web browser on any mobile platform," said Jobs. YouTube is also supported.
The iPod touch's battery lasts for 22 hours of audio playback and five hours of video playback per charge, according to Apple.
The iPod touch is a worldwide product launch, said Jobs. It's the first touch product Apple has shipped outside the Uited States, and it's been localized into many languages.
The iPod touch is coming in two configurations -- 8GB and 16GB, for $299 and $399 respectively. Both models are expected to be available "in just a few weeks," according to Jobs, who said that Apple will ship them in September, "in plenty of time for the holiday season."
One more thing
"But there is one more thing, if you'll bear with us," said Jobs.
"You might have noticed that there's an empty spot on that dock of the new iPod touch," said Jobs. "What could that possibly be for? Well, it's for a new app we've written called the iTunes Wi-Fi Music Store."
"'Finally,' some of you are saying," said Jobs. "It's so cool. So let's take a look at what it is."
Opening the iTunes Wi-Fi Music Store displays four buttons: Features, Top Tens, Search and Downloads. You can pick Top 10 songs from all of iTunes or only from specific genres. If you see a song you like, you can preview it, and if you like it, you can tap it to buy it using a Buy Now button. You'll download the song, and the next time you dock your iPod touch to your computer, it will sync back to iTunes.
Jobs demonstrated the new software's capability by buying John Lennon's Imagine. The song was visible in a playlist on the iPod touch called "Downloads."
"Isn't this incredible?" asked Jobs.
The iTunes Wi-Fi Music Store is available internationally in every country where Apple operates an iTunes Store, said Jobs.
"And we're going to bring it to the iPhone," he added. Jobs said the new software will be delivered to iPhone users via an iPhone software update later this month.
Apple and Starbucks partnership
"There's even one more incredible part of this," said Jobs, who said that Apple has been working on this for two years. "I cannot tell you how much pleasure it gives me to announce we've got a great partnership with Starbucks today."
Jobs called Starbucks "an incredible phenomenon in our culture" and added that a lot of Apple employees are great customers. Apple wanted to combine iPods and their love of music with Starbucks' coffee and love of music.
"In the new iTunes Wi-Fi Store, when you get near a participating Starbucks, automatically a fifth button is going to pop up in the store with a Starbucks button," he said.
"You will know what songs they're playing in Starbucks, and you can buy it with one tap of your finger. And if you just missed it, you can look at the last 10 songs they've played. They're going to program some cool music for us in terms of their collections," Jobs said
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