Apple is adding social networking functions to iTunes with a feature called Ping that will let users see what friends and celebrities are listening to.
"It's like Facebook and Twitter for iTunes," said chief executive Steve Jobs at a media event in San Francisco on Wednesday. "Ping is all about social music discovery."
ITunes users will be able to create lists of their favourite songs and albums through profiles, which can be shared with friends or left completely public. Artists will also have profiles that can be followed. Jobs demonstrated the feature by showing off Lady Gaga's profile.
Users can also list biographical information on their profiles and share news on what concerts they are planning to attend.
Ping is part of iTunes 10, which is available for download immediately, Jobs said.
Technology industry observers commented that Apple's Ping service will be a major new competitor for social network MySpace, which stresses music functionality as one of its major draws.
"Apple just killed MySpace," technology blogger Robert Scoble said on Twitter. "Totally dead now."
Jobs also introduced a new version of Apple TV, the set-top box the company launched in 2008 to tepid sales. The new version is only a quarter the size of the original, and can fit into the palm of a person's hand.
The new version will only allow users to rent content rather than purchase and store it. All content will be in high-definition, where applicable, and movies will be released the same day they come out on DVD and cost $5.99. Commercial-free television show rentals will be 99 cents per episode, as opposed to the $2.99 it previously cost to own them.
The television rentals will only be available in the United States, Apple said in a follow-up press release.
So far, only ABC and Fox have joined the service. "We think the rest of the studios will see the light," Jobs said.
The device, which will be available late this month in Canada for $119, will also support YouTube and Netflix streaming. Netflix is planning to launch service in Canada in the next few months. Apple said the 99-cent television rentals will only be available in the United States.
Apple will also be issuing a software update for iPhones next week that Jobs promised will fix several bugs, including those that have made the original iPhone 3G run sluggishly.
A software update for the iPad is coming in November, he added.