SAN FRANCISCO (Reuters) - A thin and smiling Apple Inc Chief Executive Steve Jobs launched a much thinner, curved iPod nano music player and joked about the state of his much-discussed health on Tuesday.

But shares of Apple fell more than 4 percent after the presentation, which had no major surprises for investors. Apple last week invited reporters to a music-related event, stoking expectations of new players. Some had hoped for new computers as well as iPods, but that did not happen.

Jobs introduced a curved aluminum and glass nano -- the best-selling iPod -- for $149 with 8 gigabytes of storage, $50 less than the predecessor model, and a 16-gigabyte version for $199, with up to 24 hours of music playback or four hours of video.

He also rolled out a thinner, $229 version of the Internet-connecting iPod touch with rounded edges and 8 gigabytes of storage.

Apple dominates personal digital music players, with nearly three-quarters of the U.S. market in July, Jobs said, adding that the product line-up was strong for gift-giving season.

"I would call it a series of both expected and unexpected announcements. Clearly the new iPod nano in the flesh is certainly more appealing than it's been. It was expected but I think it will sell well in the holiday season," said Michael Abramsky, analyst with RBC Capital Markets.

He added that Jobs did not look much different from June, when his gaunt frame drew speculation of a recurrence of cancer or other problems and unnerved investors who see him as crucial to the success of the company.

DEATH REPORTS EXAGGERATED

Jobs appeared thin but jaunty as he walked around the stage in his trademark outfit of jeans and long-sleeve black shirt in front of a screen which flashed "The reports of my death are greatly exaggerated" -- a quotation borrowed from Mark Twain.

In 2004, Jobs, 53, said he had undergone successful surgery to remove a rare type of pancreatic cancer.

Apple Marketing chief Philip Schiller said video games have emerged as the first big category of applications on the iPhone and iPod Touch. He said 700 of the roughly 3,000 applications sold on Apple's AppStore were games, the largest software category.

"Apple tends not to think in terms of demographics," Schiller told Reuters in an interview. But he added: "You are likely to see more people using iPod nano than a Touch in athletics. If you are a kid who plays lots of games, perhaps you would be more likely to own a Touch," he said.

Apple also said new nano has a "shake to shuffle" feature that changes songs as the player itself is jiggled and that television broadcaster NBC had rejoined online video and music store iTunes.

Apple stock slid $5.09, or about 3.2 percent, to $152.83 in afternoon Nasdaq trading.

The stock had been off just over $40, or a little over 20 percent in the year-to-date, but has weathered the sell-off in stocks tied to the U.S. credit crunch far better than most other shares, including many technology names.

(Reporting by David Lawsky and Eric Auchard, writing by Peter Henderson, editing by Maureen Bavdek and Derek Caney)

(Additional reporting by Sue Zeidler in Los Angeles)

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