...but does it make phone calls?

Owners of the new wi-fi-enabled iPod touch will be able to buy songs on the spin at Starbucks - while the songs are playing.

Both products — the wi-fi iPod touch, and the Starbucks liaison — were unveiled yesterday in an anticipated news event.

The new iPod boasts touch-screen capabilities, wireless functionalities and a Safari browser. Many Apple fans were able to predict its iPhone-esque appearance and functionalities in advance of the announcement.

The Starbucks relationship enables users to access — and instantly purchase — music played in Starbucks stores, as well as the last 10 tracks, and special Starbucks music collections. This capability will be available in participating stores as soon as October, and across the States by the end of 2008.

Users with a wi-fi-ready iPod, an iPhone, or a computer with the most current version of iTunes will also receive free wi-fi access to iTunes, including Starbucks' Now Playing content, within Starbucks stores.

The cost of the iPhone was also dropped. An eight-gigabyte is now US$ 399, while the four-gigabyte will be phased out. This should encourage still stronger adoption of the unit, which notably competes with both smart phones and feature phones.