In the middle of the night, Apple dropped the price of the 1GB iPod shuffle from $99 to only $65, while at the same time introducing a 2GB model, the price of which was not released at 4:15 in the morning. The 2GB model will be available later in the month, but is not yet available for pre-order from the Apple Store.
The iPod shuffle has remained virtually unchanged in its present form factor for the last 18 months, a fact which led some analysts to blame the shuffle for the apparent slowdown in iPod sales towards the end of last year. The fact that unit sales targets were not met, while revenue targets were, would tend to point the finger at the least-expensive iPod in the family as the slacker. When the shuffle was first released it was seen as a cool "stocking-stuffer" at Christmas. Presumably that cool only lasts one Yuletide.
Since the update to its present form factor the iPod shuffle has seen colour changes, including the introduction of a more-expensive "Product (red)" edition, partial proceeds of which are used for charitable causes. Beneath the skin, though, it hasn’t changed in a while. Whether a price drop and a 2GB option will reinvigorate the line is the next question.
The iPod shuffle is the "wearable" iPod, which includes no screen, meaning users have to either set up playlists before syncing to the iPod or use the random-play "shuffle" mode to select songs. The iPod nano, iPod classic and iPod touch lines all feature much greater capacity and cost.
UPDATE: At 7am Apple announced the 2GB shuffle will cost $89. It still doesn’t seem to be available for pre-order though. Given that there are only nine days that can be considered "later in the month" that seems a little odd to me.