Review: Shake, shuffle and ready to roll - the new iPod

Pictures really don't do the Nano justice - it is without doubt one of the slickest, best looking pieces of consumer electronics you're ever likely to see.

Every edge is curved, even down to the glass covering the screen. It's also incredibly light.

The new cheaper version of its iPod music player - costing £109 and described by Apple CEO Steve Jobs as "the thinnest iPod ever" - is just 6.2millimetres thick.

It includes a two-inch widescreen display. The menus will be familar to any iPod user but the system has been upgraded to take advantage of the Nano's new bigger screen.

Video is impressive, and simply putting the iPod on its side switches the display, thanks to the inbuilt sensors. These are also used for the Nano's newest party trick - "shake to shuffle" where the user changes songs simply by giving it a shake.

Last night Mr Jobs revealed that the company had sold more than 160million iPods since the MP3 player was introduced seven years ago - it now has a 73per cent share of the music player market. Speaking in San Francisco, he said the iPod Nano - "the world's most popular music player" - had been made even better for this holiday season.

He paused briefly to laugh off reports of his poor health, walking past a screen which read: "The reports of my death are greatly exaggerated."

Concerns about the chief executive's health emerged in June when he introduced the latest version of the iPhone at a conference in San Francisco.

The 53-year-old MrJobs looked thinner than usual and in 2004 he announced that he had undergone successful surgery to remove a rare type of pancreatic cancer.

Last night he said that he could stand to gain some weight but added: "I'm doing just fine. I'm healthy."

Mr Jobs went on to list the new iPod's green credentials, including arsenic-free glass and a mercury and PVC-free body that is "highly recyclable".

However, experts said that the new product reflected how big an impact the credit crunch is having on the electronics market.

"The new products are impressive but they are a refinement and just slightly better and cheaper," said Stuart Miles of gadget site Pocket Lint.

"This is a clear indication that the credit crunch is really affecting electronics companies now. They are not releasing the 'big bang' products but focusing on giving consumers value for money."

Apple has also updated its iTunes software to include a new "Genius" feature, which builds customised playlists based on whatever song the user is listening to.

"Genius allows us to analyse the music collections of millions of users to see what songs they listen to, and how often," said Oliver Schusser of Apple. "This then allows us to create playlists of songs that we think will fit together really well." The company denied that it launched the service to collect data about customers. "We do not collect any user identity data, just the details of their music library," said Mr Schusser.

The new service is expected to boost sales from Apple's online music store, which now boasts 65 million customers worldwide.

"We really want people to focus on the music again," said Christi Wilkerson of Apple. "With the Nano, and the new version of the iPod Touch we also launched today, we think we can do that." Apple also responded to customer complaints about its new iPhone 3G, which has suffered call problems and crashes. A software update which will be distributed on Friday will fix "lots of bugs", Apple said.

Overall, the new Nano really shows just how far ahead of the competition Apple really is. It's not a revolution, and owners of previous iPod Nanos probably shouldn't bother.

But this is, without doubt, far and away the best small MP3 player on the market.