Sales of Apple's most affordable iPod shot up more than 50 percent a week after the company unveiled new, more compact models that shift the push controls from the player itself to the included pair of earphones.

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The iPod shuffle has taken on an unusual role in Apple's lineup both as its price leader and as an example of the company's efficiency in design. But with its third version now out the door, there may be signs Apple isn't sure of where to go next with its least expensive media player.

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Apple this weekend was hit with a media assault after reports suggested that a mysterious authentication chip in the third-generation iPod shuffle, responsible for supporting the player's new headphone-integrated playback controls, signaled a rogue attempt on the company's part to block third parties from developing their own replacement headphones for the device without paying a licensing fee. Update: Apple has denied that any DRM authentication mechanism is involved.

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The latest, most petit version of Apple's iPod shuffle music player can be disassembled without major challenge, according to a new tear-down report, which notes that the player is compatible with third-party headphones if all you want to do is listen to music straight and not control playback or volume.

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Apple retail stores on Thursday began receiving the company's third-generation 4GB iPod shuffle in extremely limited quantities. What follows are a few dozen unboxing and comparison shots, along with some commentary.

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Apple has detailed the remote control features of the new third generation iPod shuffle, which pairs Apple's now-standard earphones with an integrated remote that includes voice feedback and visual signals from an indicator light.

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As anticipated, Apple on Wednesday evening delivered iTunes 8.1 with performance enhancements, support for CD imports to iTunes Plus, and new Genius features. Separately, the company also updated its Front Row media application.

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Apple on Wednesday introduced an all-new iPod shuffle that's nearly half the size of the previous model and includes speech technology, making it the first music player "that talks to you."

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Apple later this morning is expected to introduce a new version of its iPod shuffle digital music player with 4GB of storage capacity, new colors, and other tweaks, according to a source.

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FBR Capital Markets said Wednesday that it believes that Apple is gearing up to release several new products during the first half of 2009, including a new version of the iPod shuffle and cheaper versions of its flagship iPhone and MacBook offerings.

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Renderings of a protective case for a device that resembles a smaller iPhone have been published online, rekindling speculation that Apple may be planning to introduce a new low-end handset sometime in the near future.

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Although Macs and iPhones were seen as Apple's ticket to a healthy holiday quarter, the electronics maker has reportedly been struck by surprising demand for iPods and is now scurrying to restock some of its reseller channels.

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Living up to a promise it made in January 2007, Taiwanese electronics maker Luxpro has at last filed a lawsuit against Apple claiming that the American company was plotting a multinational scheme when it sued Luxpro over its iPod shuffle doppelganger.

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Although it wasn't mentioned during chief executive Steve Jobs' keynote presentation Tuesday morning, Apple refreshed the color options for its second-generation iPod shuffle. Separately, the company introduced a new 120GB version of the iPod classic.

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Apple will announce later today an entire refresh to its iPod family of digital media players, including an iPod nano with some form of motion sensor, AppleInsider has been told.

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A Mac website has obtained what's believed to be the first proven genuine photo of a fourth-generation iPod nano, days ahead of its launch.

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Digg creator Kevin Rose says he knows many details of Apple's iPod revisions for September, including what appears to be a photo of the fourth-generation iPod nano and a teaser for information of iTunes 8.0.

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Apple could boost its least expensive iPod this fall with a redesign and 4GB of storage, according to one report. Also, Quark has shipped a major overhaul of its long-running publishing software, the iFund is now backing a game developer, and Apple is now offering daily statistics to iPhone software developers for their App Store sales.

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The owner of an iPod repair shop is being sued by Apple for misuse of the coveted iPod trademark -- and of allegedly manipulating Apple to both send him replacement units for free as well as tricking the electronics giant into repairing out-of-warranty iPods.

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Analysts at Piper Jaffray see iPod shipments on the rise and suggests Apple is bucking fears of a continued downturn. Also, Sybase is readying a native iPhone app, AT&T may offer iPhone insurance, and two carriers in Japan and Korea may launch the iPhone at the same time.

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