SAN FRANCISCO -- Apple Computer CEO Steve Jobs brought along plenty of star power as he introduced a music-playing cell phone capable of storing about 100 songs, but a video-phone appearance by Madonna and onstage performance from Kanye West only added to the excitement surrounding the latest iPod product.

The iPhone, made by Motorola and loaded with iTunes software, can store podcasts as well as music. Users can transfer songs to the device from their P-C or Macintosh computers and make calls through Cingular Wireless.

Jobs says it's "an iPod shuffle right on your phone." He noted at a news conference in San Francisco that both the iPhone and iPod shuffle randomly sort music, hold about the same number of songs and have display screens.

Jobs also introduced a pencil-thin iPod Nano, which will replace the iPod Mini. It's one-third the size of the Mini -- "thinner than a number-two pencil" -- and holds one-thousand songs.

The Nano can store music, games, photos and a calendar.

A four-gigabyte Nano will retail for $249, and a two-gigabyte model will sell for $199. Both versions are to be available in stores this weekend.