Apple Computer Inc.’s chief executive, Steve Jobs, flanked by U2 band members Bono and The Edge, unveiled a new version of its iPod that can store photos and music as the company capitalizes on surging demand for the devices.

The latest iPod, with a color screen and capacity to hold as many as 25,000 photos, begin shipping yesterday, Mr. Jobs told a press conference in San Jose, Calif. A 40-gigabyte version will sell for $499 and a 60-gigabyte version for $599, Mr. Jobs said.

“We think music-plus-photos is the next big thing,” Mr. Jobs told the press event, where he also showed off a special-edition black and red iPod that comes with U2’s music. “Everyone has a digital camera right now. So everyone is taking tons of digital pictures and building digital libraries.”

Apple’s iPods, first released in October 2001, are now the fastest-growing product made by the Cupertino, Calif.-based company. IPods accounted for 23% of Apple’s $2.36 billion in revenue in the fourth quarter, up from 12% a year earlier. The sales surge helped make Apple the second-best performing stock in the Standard & Poor’s 500 Index this year.

Mr. Jobs, 49, built the company’s success around the “classic” white iPod and a “mini” version released in February that comes in five colors. Apple sold 5.74 million of the players, including 2.02 million in the quarter ended September 25. iPod revenue more than quadrupled to $537 million in the period from a year earlier.

Apple yesterday also released in conjunction with Bono and U2 a black version of the iPod. A 20-gigabyte version of that iPod, available in mid-November, will sell for $349. Apple also said it expanded its iTunes online music site to nine more European countries.

“They’re trying to capitalize on the hype and the way to do that is bring Bono out and make a big splash,” said Gene Munster, analyst at Piper Jaffray & Co. in Minneapolis who rates the shares “outperform” and said he doesn’t own them. “The new products are targeted at the higher end so this is about trying to get at new market.”

Bono described the iPod as “the most interesting object since the electric guitar in terms of playing music.”

Apple’s 20-gigabyte white iPod sells for $299 and the 40-gigabyte for $399. The mini-iPods are priced at $249.

IPod sales growth will continue, said analysts such as Merrill Lynch & Co.’s Steven Milunovich. He estimates that Apple will ship 2.68 million units during the holiday season, almost four times as many as the company sold a year ago.

Apple began shipping the mini overseas in July, helping bolster sales. The company delayed the release to meet demand in America.

Retailers such as Costco Wholesale Corp. and Sears Roebuck & Co. have begun carrying the iPod, Mr. Milunovich said.

Mr. Jobs also signed a licensing deal with Hewlett-Packard Co., allowing the world’s no. 2 maker of personal comput ers to start selling its own branded version of the iPod in mid-September.

Palo Alto, Calif.-based Hewlett-Packard shipped 121,000 units in less than a month, accounting for 6% of all iPods sold in the fourth quarter.

Apple shares have more than doubled this year, and are trading near their highest levels since September 28, 2000, when the shares closed at $53.50. The stock rose 42 cents to $47.97 in Nasdaq Stock Market composite trading yesterday.

The iPod won 82% of the market for hard-disk-based players sold in American retail stores in the 12 months ended in August, up from 64% in the same period a year earlier, and 33% two years ago, according to Port Washington, New York- based NPD Group Inc.

The success of the devices has made the iPod a target for competitors from Japan’s Sony Corp. to PC king Dell Inc. of Round Rock, Texas. So far, Mr. Jobs has stayed ahead of his rivals because the iPod, which works with its iTunes software and online store, adds up to an easy-to-use combination of hardware and software that other manufacturers have not been able to mimic, say analysts such as Piper Jaffray’s Munster.