In the first, major upgrade since the 2005 launch of its iPod Shuffle, Apple announced today a new version with 2 GB storage space. The price of the new version is only $69. In addition, the company has slashed the price of iPod Shuffle 1 GB version, also known as “the most wearable iPod”. The 1 GB version costs now only $49. Thanks to a built-in clip, the iPod Shuffle goes with anything.

The iPod Shuffle was the first iPod to use flash storage and Apple delivers it in four different colors, besides the original white. While the price cut is effective immediately, the 2 GB will be available late this month. The iPod Shuffle weighs only one ounce and is half a cubic inch in size. The battery offers 12 hours

The 2 GB are enough to store 500 songs in 128-Kbps AAC format, Apple said. The player offers support for AAC, Protected AAC, MP3 (8 to 320 Kbps), MP3 VBR, Audible (formats 2, 3, and 4), WAV, and AIFF files. Thanks to its USB connection, the iPod Shuffle can be used also as a storage drive.

The main competitors of iPod Shuffle are Creative’s ZEN Stone and SanDisk’s Sansa Clip. Besides Shuffle, Apple’s iPod lineup includes iPod Classic, iPod nano and recently launched iPod Touch.

Earlier this month, Apple has announced a new lineup of their iPhone and iPod Touch offerings which feature double storage capacities.