A new generation of iPods is set to be unveiled by Steve Jobs, the founder and chief executive of Apple, tonight. Apple is not commenting before the launch in San Francisco, but speculation points to updates for Apple's market-leading iTunes online music store and a new, “skinnier” look for the iPod nano. Price cuts are also expected.

The success of the iPhone has pushed the iconic iPod and its siblings, the Nano and the Shuffle, into the shadows. Some consumers are questioning the need for an MP3 player from Apple when all of its features are offered by the iPhone.

The new iPod Nano is said to be longer and slimmer, with a more distinct curve to the screen. The iPod touch is said to be getting a memory upgrade and a price cut to bring it in line with the cost of the 8Gb iPhone 3G.

In the United States the 8Gb iPod touch costs $299 (£169) and the 8Gb iPhone 3G costs $199. According to a post by Kevin Rose, founder of the Digg website, Apple will release iTunes 8 with a new music recommendation engine called Genius: iTunes recommends songs from its online store that users might like based on past purchases, but Genius supposedly will scan your entire music library and give recommendations.

Apparently, it will also choose songs that you already have and arrange similar songs to give you a more cohesive listening experience. Quite how remains unclear. It is understood that iTunes 8 will also include new tools to allow users to download high-definition versions of their favourite television shows and put them on selected iPods. At the moment iTunes offers the HD option only for select films rented over its Apple TV device.

Mr Jobs will take the stage tonight at the Yerba Buena Centre for the Performing Arts in San Francisco for the launch under the banner “Let's Rock”. He has made a habit of introducing new iPods in September, just in time for the Christmas market. In 2005 he unveiled the original iPod Nano. Last year it was the iPodTouch.

Sales of iPods have levelled off after a couple of years of huge growth. Analysts have said that the product line needs a boost to keep customers clicking into the lucrative iTunes store. Apple shares have been dropping recently as investors' expectations have lessened before the launch.

Shaw Wu, an analyst with American Technology Research, said that he did not expect Apple to use tonight's event to unveil any new Macs. “We continue to believe that MacBook Pro and MacBook are due for refreshes with more radical redesigns,” he said.

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