Apple boss Steve Jobs revealed the tiny iPod during his opening address at the Macworld conference in San Francisco this week with a UK price set to be around the Â£130 mark
The iPod Mini has enough storage to hold about 1,000 songs and is due to go on sale in the US in February and the UK in April.
During his opening keynote speech at Macworld Mr Jobs said that Apple had sold more than 2 million iPod music players, 730,000 of them in the closing three months of 2003.
At the show Mr Jobs said the 10GB iPod will be dropped in favour of a 15GB version but will keep the same price of Â£164, reports the BBC. Apple has a 31% share of the portable MP3 player market in terms of units sold and 55% of the market by revenue, said Mr Jobs.
The new device comes in five colours, measures 9cm by 5cm (3.6in by 2in) has 4GB of storage
The iPod Mini looks set to help Apple keep its position as the top MP3 player maker. But 2004 looks set to be the year of the portable music player as Apple faces renewed competition from other gadget makers such as Digital Networks, Creative Labs and Archos.
Mr Jobs said that iTunes has 70% of the legal download market and has now sold more than 30m songs. In late December Apple was selling almost 1.9m songs per week. But rival services from Real Networks and even retail giant Wal-Mart and many others could dent iTunes' lead.
News source: Dance Front Door