Image: Apple Inc.

In an early-morning teaser, Apple (AAPL) has chopped $20 to $120 off the prices of most of its iPod line.

The new prices were posted only hours before a special music event at which Apple is expected to replace most if not all of its existing iPods with new models loaded with more memory and added functions, such as a camera.

Among the cuts:

• 8 GB iPod touch reduced to $189 from $229 ($40 off)
• 32 GB iPod touch reduced to $279 from $399 ($120 off)
• 16 GB iPod nano reduced to $149 from $199 ($50 off)
• 120 GB iPod classic reduced to $229 from $249 ($20 off)

The new prices are posted, without comparisons to the old, on Apple's online store. Only the iPod shuffle appears to be unaffected. It still $79 for 4 GB.

Today's event is scheduled to start at 10 a.m. Pacific (1 p.m. Eastern) at San Francisco's Yerba Buena Center for the Arts.

UPDATE below with price changes announced at the event:

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Could Apple's (AAPL) new product marketing machinery get any more efficient?

Gone are those high production value Macworld keynotes starring Steve Jobs (he last appeared in 2008). Gone too, apparently, are the Special Events for selected press at Apple's Cupertino headquarters (the last, in the fall, featured Jobs).

Last week's refresh of the Mac desktop line was accomplished with a drumroll of spyshots and a pair of press releases, yet there didn't seem to be any lack of media interest. (See here.)

Wednesday's announcement of a new iPod shuffle — "the first music player that talks to you" — was a little more challenging. After all, it involved a price increase (from $49 for the 1 GB square shuffle to $79 for the new 4 GB rectangular model) and a new control mechanism that you might have trouble mastering on your own.

No problem. In this case, all it took was a press release and an online video. You can see "Hannah" give her 4 1/2-minute guided tour of the new shuffle at Apple's website here or watch the YouTube version below the fold.

Piper Jaffray's Gene Munster thinks the new features will drive iPod sales higher and fatten already healthy profit margins. After the announcement, he raised his 2009 fiscal year Apple earnings estimate a few cents, from 5.06 to $5.09 per share.

Munster points to the new shuffle and rumors of a new touchscreen device as encouraging evidence of Apple's continued innovation after the disappointments of Macworld 2009. He believes we will see a new touchscreen device from Apple — either in the form of a tablet computer or a smaller, cheaper MacBook — but not before 2010.

Below: Hannah's iPod shuffle demo.

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Apple's (AAPL) last Macworld Conference and Expo opens Monday at San Francisco's Moscone Center, but the real action starts Tuesday at 9 a.m. PT (12 noon ET) with senior vice president Phil Schiller's opening remarks — the first Macworld keynote not delivered by Steve Jobs since 1997.

Nobody's expecting breakthrough products that rise to the level of the iMac (Macworld 1998), the iBook (1999), iTunes (2001) or the iPhone (2007), but this Expo is not without its drama, speculation and hype.

Our top 10 favorite Macworld rumors:

10. Snow Leopard release date. We know a lot about Mac OS X 10.6, thanks to Jobs' June 2008 announcement that it was coming, Apple's official description of the product and a steady stream of leaks from the developer community. What we don't know is when it will ship.

9. Unibody 17-inch MacBook Pro. By several accounts, this machine was supposed to be released in October, along with the new unibody 13-inch MacBook and 15-inch MacBook Pro. But display issues and problems with the optical drive reportedly pushed its release back "several months" — which brings us to next week's Expo. UPDATE: Seth Weintraub at 9to5Mac adds this twist: the new 17-inch Pro will sport a superslim longer-lasting nonremovable battery pack.

8. Revamped iWork. The big news on New Year's Eve was the "truckload" of information dumped on various rumor sites about iWork — Apple's homegrown answer to Microsoft (MSFT) Office.  The thrust of it was that what's now a suite of desktop applications — Pages, Numbers and Keynote — is about to be transformed into a collection of Web-based apps like the .Mac Web Gallery, suitable for cloud computing.

7. 32 GB iPhone. Whispers that Apple was set to double the memory of the top-end iPhone have been floating around since September, but AT&T's (T) post-Christmas $99 iPhone sale and word that Apple had sewed up the lion's share Samsung's flash memory production all point to a January release.

6. 64 GB iPod touch. Rumors of this memory upgrade go back even further. It was supposed to happen in August, then in September, and then before Christmas. With memory prices falling, time is more than ripe.

5. New Mac mini. Rumors of the most affordable Mac's imminent demise have given way to a flood of new specs, among them  2.0 or 2.3 GHz Core 2 Duo processors, NVIDIA graphics platform, dual display outputs and dual drives that can be configured every which way.

4. New iMac. Some inspired sleuthing in the extension files that shipped with the new MacBooks found references to NVIDIA chipsets for both a Mac mini and a new iMac — along with hints that the reconfigured all-in-one desktop was supposed to ship in November but got pushed into 2009 by unexpected delays. DigiTimes now reports that Apple has ordered shipments of 800,000 per month.

3. New iPod shuffle. FBR Capital Markets' Craig Berger, whose track record AppleInsider describes as "questionable," expects Apple to release a new and smaller version of the iPod shuffle sometime in the first calendar quarter — which started on Thursday. AppleInsider adds that it has picked up chatter of a new shuffle that would be flat as a credit card but thick enough at one end to fit a headphone jack.

2. New Apple TV/Time Capsule. This one also comes from an analyst. Shaw Wu, a veteran Apple watcher newly ensconsed at Kaufman Bros., wrote last week about the possibility that Apple will introduce a new consumer device — "an enhanced version of Apple TV and/or Time Capsule" — that would give users access to their media content, SlingBox style, from anywhere on the Internet.

1. Steve Jobs. Show or no-show, Apple's CEO is both Macworld 2009's No. 1 rumor and the No. 1 source of rumors — whether it be that he's stepping down, that his health is failing, that he doesn't feel there's enough news in Nos. 1-9 to justify a Steve Jobs keynote, or that he just doesn't feel like playing in Macworld's sandbox anymore. We favor the theory that he's set the stage brilliantly for a surprise cameo appearance. Er, UPDATE: See What's going on with Steve Jobs' homones?

Below the line:

• iPhone nano. Despite all the chatter — and spy photos — not this Macworld. Maybe later this year.
• iPod tablet. Maybe later this year. Maybe never.

Is there truth to any of this? We'll be flying to San Francisco Monday to find out. Tune in to this space early Tuesday for our Macworld 2009 live blog.

[Photo courtesy of setteB.IT.]

Below the fold: How Phil Schiller could hit a home run next Tuesday, as imagined on The Mac Observer's Apple Finance Board by one of the regulars, retired Air Force pilot Pat Smellie.

UPDATE: In case you haven't heard, almost none of this came true on Tuesday. By my count, the rumor mill is batting less than 150. See Live from Apple's last Macworld!

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Taking advantage of rapidly falling memory prices — and offering customers the lowest entry point in the iPod's six year history — Apple (AAPL) today slashed the price of the 1GB iPod Shuffle from $79 to $49.

The 37.9% price cut is even steeper than the $200 (33%) cut in iPhone prices that Apple announced last September.

The company also announced today that a new, 2GB Shuffle will be available later this month for $69.

“At just $49, the iPod shuffle is the most affordable iPod ever,” said Apple VP Greg Joswiak in a press release issued this morning. “The new 2GB model lets music lovers bring even more songs everywhere they go in the impossibly small iPod shuffle.”

AppleInsider notes that the price cut comes amid analysts' reports that blamed the lack of a refresh in the Shuffle line before the holidays for recent softness in iPod demand. It quotes Citigroup analyst Rich Gardner:

While virtually 100 percent of the unit shortfall was in the low-end iPod Shuffle, allowing Apple to beat consensus iPod revenue despite the unit shortfall. We believe the unit shortfall reflected the lack of a compelling update to the Shuffle product last Fall; the Shuffle simply was not the compelling 'stocking stuffer' this year that it was last year. (link)

For more on this, see Analysts: Effect of iPod shuffle price cut is a wash