Not content to rest on its laurels, Apple has now unveiled its master plan to extend its digital music dominance into the coming holiday season. Here is how the latest developments shake out.

iPod Touch

What it is: A Wi-Fi-enabled, touch-screen carbon-copy of the iPhone in every way except it has no phone functionality. For the first time, users can search, browse, sample, buy and download music from the iTunes service directly from a portable device—no computer needed. The company will release a software upgrade for the iPhone in the coming weeks to allow the same.

What it means: The company’s decision to make the iTunes music store accessible via Wi-Fi marks perhaps the most significant evolution of the iPod/iTunes juggernaut since it made a Windows-compatible version of iTunes.

While iTunes remains the most popular digital music download service in the world, the average iPod owner buys only 20 songs per year. Just as sales increased after Apple made iTunes available on the PC, iTunes VP Eddy Cue expects a similar increase by adding wireless access to the service. “The ability to discover, preview and buy anywhere you are on a mobile device with Wi-Fi will cause people to buy more music,” he says.

“This is the way this stuff is supposed to work,” Jupiter Research analyst Michael Gartenberg wrote on his blog during the event. “This is not about a refresh of the products aimed at the existing market. Apple is not preaching to the choir here, they’re looking to get a whole new customer into the house of worship and that’s exactly what’s likely to happen this holiday season.”

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