Here in the UK it's not uncommon for the iPod Touch to be described as "all the best bits of the iPhone" with the less-successful parts (the non-3G phone, the relatively-poor camera, and of course the carrier lock) omitted; Needham & Co analyst Charlie Wolf is willing to go one further, however: he's claiming that Apple gave up 1.5 million iPhone sales during Q4 2007 by releasing the Touch with its almost-iPhone feature set, and moreover knew exactly what they were doing.
"If the company is successful in this endeavour, it would provide a compelling upgrade path for the estimated 85 million people who already own iPods. And it could attract new users to both the iPhone and the iPod platform as well. The company appears willing to risk the cannibalization of a significant number of iPhones to accomplish this" Charlie Wolf, analyst, Needham & Co.
Wolf believes that Apple views the current market as a tipping point for establishing the iPod as not just a media player brand but a "mainstream WiFi mobile platform", and are willingly trading short-term profits from the iPhone for long-term success of both lines. He predicts that a 3G-enabled iPhone will be released, at the same price as the current model, during the Summer, and will continue to be sold alongside the first-generation model (which will be cut to $299); meanwhile, iPod Touch prices will be scythed to $199 and $299, maintaining the broad range of price-points.
[via Apple Insider]
This is ridiculous. I bought my iPod touch because I wanted the iPhone capabilities, but I’m completely unwilling to pay $60 per month for an iPhone’s contract for two years. I don’t need EDGE (I live in a college town; There’s Wi-Fi everywhere) and I don’t need a mobile phone (I have a prepaid, and I rarely use it).
What I did need was an iPod, and I wanted a web browser and PDA-style device that was Apple/iTunes compatible. With the new software, the iPod touch is the spiritual inheritor of the Newton’s mantle, and I’m happy to have one to handle my media and Internet needs while I’m on the go.
I would NEVER have purchased an iPhone, even if the iPod touch were never produced. I cannot justify having to enter into a two-year phone contract to use my iPod, and I’d rather not rack up the fees, either.