Apple has launched the world's smallest MP3 music player, the new iPod shuffle. The tiny device measures just 1in by 1.6in, with much of that taken up by the familiar iPod control wheel.

It is so small that you can take it everywhere, and there is even a clip on the back so you can attach it to shirts or trouser pockets.

Once songs have been loaded on, playback is simple, and you can fast-forward and rewind tracks with ease - though as with previous iPod shuffles the lack of a screen may irritate because it is not possible to select a specific song rather than play randomly.

At £55 including VAT this is a bargain, although those who can afford it will consider its bigger sibling, the updated iPod nano, launched simultaneously from £99 in a ramping-up of the whole iPod range.

The nano, Apple's middle-sized iPod, has longer battery life and an increased capacity of up to eight gigabytes - an average of 2,000 songs - for the £169 model. It also has an aluminium case, after widespread complaints that the first iPod nano scratched too easily.

At the top of the range, the iPod video now goes up to 80 gigabytes for £259.

At the same time today Apple launched a movie download service for iPods and computers

Four major Hollywood studios have been signed up to the service - Pixar, Touchstone, Miramax and also Disney - where Apple's chief executive Steve Jobs is also a director.

It will initially sell films for about £7, and a UK version is promised for early next year featuring films such as Shakespeare In Love, Toy Story and Pirates Of The Caribbean.

In tandem with the service Apple also revealed a new gadget, dubbed the iTV, that allows users to beam films from their computer to their TV.

The iTV, on sale early next year for around £180, is a small box that plugs into a TV and connects it wirelessly to a computer.

"Pretty much whatever kind of set-up you've got, iTV fits in," Mr Jobs said. "Now, you can get great content online. It's playing now on a computer near you. You can play it on an iPod near you and it is coming to a TV near you."

Commentators criticised the price of the film downloads, and warned that picture quality could become an issue for Apple.

"Prices are similar to DVDs, and I think people would prefer a DVD in that case," said Tom Dunmore of Stuff magazine.

Apple hopes to break into the lucrative film download service before arch-rival Microsoft, which launches its own film and music service in November alongside a new MP3 player, Zune.