Apple is expected to launch a new range of iPods this week designed to receive digital radio.

The company will make an announcement about the new products on 5 September, but is remaining quiet about what changes will be made.

However, a reliable industry insider has told vnunet.com that the announcement will include plans to bring digital radio to the iPod along with an option to buy music using the device.

The source said that the new iPods will be able to receive digital radio, and will include a 'buy-now' function to allow the user to download and buy tracks as they are being played.

This facility will be limited to tracks sold from the iTunes store, but Apple hopes to dramatically increase the number of tracks available via the service. It is not known whether the same functions will be included in the iPhone.

Other rumours about the new iPod line suggest the inclusion of a full touch-screen that does away with hardware buttons, and a new version of the iPod Nano that can handle video.

Meanwhile jewellery designer Thomas Heyerdahl has confirmed that he is selling the world's most expensive iPod, a Shuffle worn as a necklace coated in white and pink gold and covered with 430 diamonds. It will sell for just under £21,000.