There are two opinions (rumors) regarding the future of Apple’s iPod Touch. There are those who believe that the device will be discontinued, or should be. Then there are those who believe that the iPod Touch will not only avoid the butcher’s knife, but rather gain a 3G radio.
Needless to say, I don’t agree with either of these opinions. Let’s first look at the possibility of discontinuation. The iPod Touch may get discontinued, but I don’t think it will be this year, or in the next few years for that matter. All you have to do is look at the iPod classic.
The classic is the original iPod. It was introduced in 2001 with a 5GB hard drive, black & white screen, FireWire port, Mac-only support and a price of $400. Over the next 6 years, the device has gone through 6 iterations, losing the FireWire port and gaining USB and Windows support. It has also grown in size, to the current generation’s 160GB capacity.
When the iPod touch was launched in the fall of 2007, people speculated that the classic would be discontinued, but that never happened. The iPod classic’s biggest advantage over the iPod Touch is the capacity. At 120 GB, the classic has more than double the storage of the largest capacity iPod Touch for almost half the price. In fact, the only iPod Touch cheaper than the classic is the 8GB iPod Touch. That 8GB iPod Touch is $229.
And while the iPhone is more expensive if purchased off-contract, the iPod Touch costs more than the iPhone with the same internal capacity. I’d wager that most iPhones are purchased at the subsidized rates of $199 for the 16GB and $299 for the 32GB.
At launch, the iPod Touch was the iPhone for the folks who wanted the apps, beautiful hardware and the intuitive OS of the iPhone without the expensive data plan. Others who were locked in a two-year contract on a different carrier could also have an iPhone without terminating their contracts, thus avoiding the hefty early termination fees.
While iTunes revenue makes up a small percentage of Apple’s earnings, iTunes is by far the largest music store-front, virtual or physical. iTunes is also the most important piece in iOS, as it is the software that holds it all together, serving as the desktop sync tool, portal for content on all iOS devices and the one thing Android, Blackberry, Windows Phone and webOS don’t have. Perhaps nowhere is this advantage more evident than when Palm engineered the Palm Pre to connect to iTunes, falsely identifying itself as an iPod. And then there is Apple’s passion for music.
As long as music remains a passion of Apple, and iTunes remains an integral part of Apple’s post-PC strategy, there will always be the need for a capacious mp3 player, iCloud or not.
And now to 3G. Why should Apple make a 3G iPod Touch when they can introduce a prepaid iPhone 4 (or 3GS)? Since the iPhone 3G, Apple has always sold a previous generation iPhone (usually 8GB), at a lower price than the current generation iPhone. This practice is important in containing the growth of Android. A cheaper iPhone allows Apple to compete with the cheap and often free Android offerings. And according to reports from industry analysts, the iPhone 3GS is the second most popular smart phone on AT&T – second to the iPhone 4.
Why would Apple sell a 3G iPod Touch, a device that will certainly take buyers away from the iPhone, and why will carriers agree to carry such a device? Will the carriers offer the 3G iPod Touch on subsidy? And like the iPad, will there be a Wi-Fi-only iPod Touch? Will the 3G iPod Touch cost more? Will there be an iPod Touch 3G plan? Will it be the same overpriced 2 GB plans currently available for the iPad, or will this plan be something new? Will this device be optimized for voice, or just data?
Why would, or should anyone buy such a device? This device will not offer any added value or benefit over the regular iPod Touch or the iPhone. 3G coverage is spotty in many areas, and unavailable some. Reliance on VoIP as a means of communication will be inadvisable.
Neither AT&T nor Verizon, the two carriers in the U.S. currently offering the iPhone offer an unlimited all-you-can-eat data plan. Both carriers offered unlimited plans in the past but they both discontinued them, citing unsustainable data consumption on the iPhone (and other smart phones). If you remember, the iPad launched with an unlimited data plan. That was the reason why I opted for the 3G iPad, even though the additional $130 was very hard to justify. Such a device will require a considerably larger data plan, as data will be used for voice calls, as well as web browsing and app usage.
Apple is notorious for offering very few choices in their product line. The choices available during configuration of any Apple product are very specific – almost “limited”. This “limitation” simplifies the choices for the consumer, taking away confusions like: “what processor or hard drive may be better”. This also simplifies Apple’s inventory and supply channels. A 3G iPod Touch will go against all these.
Over the past 4 years, the iPod Touch has gone through several upgrades. The last upgrade saw the device gain front and rear cameras. This was necessary for FaceTime support. I’m certain that the iPod Touch is nearing the end of its life, but as long as the classic lives, the iPod Touch will not get discontinued, not just yet. The iPod Touch will probably grow in capacity to replace the aging classic before it gets discontinued.
And the hypothetical benefits that a 3G radio gives an iPod Touch pale in comparison to a prepaid iPhone 4 (or 3GS). A prepaid iPhone, maybe an unlocked iPhone will grow the market and expand Apple’s market share without adding confusion and complication. Maybe the iPod Touch will gain a 3G radio, maybe not, but if I were the betting type, my money would be on a prepaid iPhone.