Apple plans to host a special event next week, feeding speculation that it may release updated models of the iPod media player to spur holiday...

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Apple plans to host a special event next week, feeding speculation that it may release updated models of the iPod media player to spur holiday sales.

An invitation for the Sept. 9 event in San Francisco, sent Tuesday, is entitled “Let’s Rock” and shows a silhouetted dancer holding an iPod below a “playing soon” banner.

Lower prices, smaller models and more storage may bolster Apple’s product line in the December quarter, its biggest sales period. Chief Executive Officer Steve Jobs has held events each September for the past four years to introduce new iPods. A year ago, Jobs introduced the iPod Touch, a touch-screen model that surfs the Web.

“It’s critical that they introduce the latest and greatest” to stimulate holiday orders, said Gene Munster, an analyst with Piper Jaffray. “We just thought it was going to be an updated version of the iPod Touch, but they may have something even more interesting to show.”

Jobs, 53, may offer higher-capacity versions of Apple’s slim Nano players and cut the price of the 8-gigabyte iPod Touch to $199 from $299, said Munster, one of 27 analysts surveyed by Bloomberg who recommend buying Apple’s shares.

The $199 price would match the cost of Apple’s new iPhone 3G, released in July. While the Touch has the same screen as the iPhone, it can only access shorter-range Wi-Fi networks, rather than mobile-phone connections. Apple also sells an iPod called the Classic and the low-priced Shuffle, which starts at $49.

Separately, Apple shares fell 2 percent after a Thomas Weisel Partners analyst trimmed his sales and profit estimates for this quarter. Apple shares fell $3.34 to close at $166.19. The shares have declined 16 percent this year.

Thomas Weisel analyst Doug Reid cut his profit estimate for the company by a penny, saying retail sales are slowing, and now expects Apple to earn $1.08 a share in the fiscal fourth quarter, which ends in September. Reid trimmed his sales estimate to $7.9 billion from $8 billion.

Analysts have predicted price cuts and new products since July, when Chief Financial Officer Peter Oppenheimer forecast lower gross margins this quarter than in the previous period. He cited back-to-school promotions and an unspecified “future product transition.”

“My guess is: new iPods at lower prices, given the cost of an iPhone is as low as $199,” said investor Romeo Dator, when asked about next weeks’s event. He owns Apple shares as a portfolio manager for the All American Equity Fund at U.S. Global Investors.

“Some sort of price cut has to be coming to make the iPod Touch, Classic and Nano make sense relative to the iPhone,” he said.

Apple currently offers a 4-gigabyte version of the Nano for $149 and an 8-gigabyte model for $199. An 80-gigabyte version of the Classic that can hold up to 20,000 songs costs $249.

While the invitation suggests that next week’s announcements will be music-related, Apple also is expected to update its MacBook notebooks before the end of the year, Munster said. The Mac computer accounts for almost half of all Apple sales.