Apple announced its vision of the merger of the digital and analog worlds with the iPod Hi-Fi. Apple's entertainment properties, including iPod music players and iTunes music store now account for 60% of Apple sales.

The $349 iPod Hi-Fi is essentially a premium speaker that an iPod plugs directly into.

Here is fluff from the Apple product page:

Just slide your iPod into the built-in Universal Dock to turn on and tune in to digital music as you've never heard it before. From pumping bass to bright treble, iPod Hi-Fi delivers natural, room-filling sound. Close your eyes and you'd think you were listening to a huge stack of speakers. But iPod Hi-Fi measures just 17.0" x 6.6" x 6.9."
Virtuoso performance

As versatile as it is compact, iPod Hi-Fi incorporates thoughtful touches that make playing your music pure pleasure. Use the included Apple Remote to control music playback from anywhere in the room. Charge your iPod through the iPod Hi-Fi dock while you play music. Or take your show on the road courtesy of D-cell battery(2) power. All that makes iPod Hi-Fi pretty extraordinary. Just like iPod.