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Summary:

Apple found a way to cram a large number of iPhone 4 features in the new iPod touch: retina display, two cameras with FaceTime support, and the A4 chip. So it’s just like a contract-free iPhone 4 without voice right? Wrong on at least three counts.

ipod-touch-2010

If you don’t count the ol’ iPod Classic, Apple completely revamped the iPod line yesterday at its annual music event. The Shuffle saw the return of buttons. The Nano is now a miniature multi-touch marvel that can apparently double as a fancy watch in a pinch. Then there’s the iPod touch, which is now the most popular iPod model of all, thanks to support for apps and web browsing. On the surface, it looks like the new touch is everything one would want in a contract-free iPhone 4 without cellular voice support. I would say that it’s close, but not quite.

I will give Apple credit, as it found a way to cram more iPhone 4 features into the new touch, even as it kept price points the same. The new touch enjoys the 960 x 640 “retina display,” an Apple A4 chip and two cameras, both of which support Apple’s FaceTime video calling feature. That said, however, there are still three missing features that make the new touch close to, but not on par with, a contract-free iPhone 4.

Location, location, location! There’s still no GPS chip in the iPod touch. Instead, the device will use available Wi-Fi networks to triangulate a location, just as it does on the iPad Wi-Fi model I own. That method actually works reasonably well, but of course, requires the touch to be connected to a hotspot. So much for check-ins on Foursquare or finding local points-of-interest if there’s no Wi-Fi to be found.

Just give me data. Unlike the iPad, Apple chose not to offer a 3G radio option in the touch, likely to keep the device thin. To be as mobile as the iPhone, features such a radio and a microSIM slot would have been a nice offer. Data plans could have been month-to-month for those that want them, although an option like this would surely boost the price of the device; it’s a $130 option in the iPad, for example. The touch has always been limited to Wi-Fi, so this is nothing new, but again, it’s a key difference between the touch and the iPhone.

2003 called and wants its camera back. Yes, the new touch has a front-facing VGA camera and a sensor on the back too. That rear camera even shoots high-definition, 720p video, just like the iPhone, but don’t even think to compare the rear shooter to that of the 5 megapixel camera on the iPhone 4. Stills from the iPod touch are a lowly 960 x 720, which works out to just under 0.7 megapixels. A solid shot like the one to the right taken by my son with his iPhone 4 isn’t happening on the new touch. Pics will look fine from the touch for posting on social networking sites and such, but blowing them up is going to be a painful experience, as details will lose definition faster than you can say “one more thing.”

I raised these kinds of points prior to Apple’s new product announcement, saying that the touch will never have all of the same features as an iPhone because the phone bits allow Apple to enjoy a $600 average selling price per handset. The phone costs less than half that to manufacture and consumers in the U.S. pay $199 or $299 for the device. Apple receives a carrier subsidy to make up the difference between the ASP and the price a customer pays.  What incentive then, does Apple have to make an iPod touch equal to an iPhone — minus cellular voice, that is — when it will earn less profit per device? As long as we’re on a subsidy model for handsets, Apple has no incentive to do so.

Having said that, the new iPod touch is close enough to an iPhone 4 for me personally, and probably many others who already have a smartphone. I’ve pre-ordered a 32 GB model that I’ll carry with my Google Android phone. My phone has a 5 megapixel camera for better stills and I’ll use the free Wi-Fi hotspot feature to get my iPod touch online during my travels. Looks like Apple is making money from me, even though it still doesn’t offer a contract-free iPhone 4 in the touch!

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  1. In the UK we can buy Iphones and then choose either a contract or pay as you go deal. So it is not really Apples technology here that is at fault it is the politics in the US where you are tied to one carrier. Shame really…

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  2. I don’t understand the iPod target.

    It’s like “I want an iPhone but I just can buy this B-version”

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    1. It’s the monthly charges, my friend. Most iPhone users I know pay upwards of $100 per month at least. I have a little Virgin cell phone which I use for emergencies that I pay $80 PER YEAR. Committing to an iPhone is like committing to a mini car payment. It’s a major turnoff. Still . . . a lot of the features not related to voice calls seem quite cool. Plus it is an iPod without WiFi. So call me one of the people interested in the “B-version”.

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    2. Isn’t that a little like saying ” Why do all those people eat at Micky D’s when that great French place is across the street?” Not everybody is invited to the table David.

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    3. For me, the ‘target’ is that I have no interest in the iPhone itself. I am a happy Android phone user, but what I *do* want is the iPod, Apps, and Video integration that I get on my Touch. I love my iPad as the replacement for a carry-around netbook, but it is too big for some things. The Touch has a wonderful ‘in-between’ slot.

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    4. Games and music. That’s the target, and they have the mobile markets for both all sewn up. Pictures are fine, but that’s really the province of the phone market, so that’s why you don’t see a 5mp on here.

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    5. AT&T. For a lot of people, that’s plenty of justification not to have the iPhone.

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      1. I recently switched from a Verizon Blackberry to an iPhone 4 and the service has been great so far; (I’m in the Minneapolis/St. Paul area). I’m sure the coverage is worse in some areas, but I’m going on my 4th week now, and haven’t had a single dropped call.

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    6. I’m a grad student and I carry around a dumb phone and a 1st gen iPod Touch. I looked at Android phones but all of them require an added $25 per month data plan. Because of the ubiquity of free wi-fi (especially in a college town) and the $300 per year in savings by not owning a data plan, it makes sense to have the iPod touch rather than an iPhone.

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    7. Hamranhansenhansen Friday, September 3, 2010

      There are many use cases:

      * Something like 50% of iPod touch users are kids. Some of them are really little kids. They don’t quite have a business case for $80/month smartphone plan.

      * More Verizon users have a dumb phone plus iPod touch than have Verizon smartphones.

      * If you just want a full-featured music player, the fact that when you’re in Wi-Fi (say at work or school) it can play Pandora or other streaming music or download new music or podcasts from iTunes is a pretty significant feature.

      * It’s by far the cheapest mobile app platform, and is often purchased just to run one app all or most of the time. For example, there are text-to-speech apps for people who can’t speak. The cost of the iPod touch plus the app is much, much less than a dedicated device. Or an iPod touch plus FourTrack is cheaper than a portable multitrack recorder and has a better interface.

      * Portable gaming system.

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      1. Exactly. The iPod touch is the gateway drug to the iOS universe for those who can’t/won’t use AT&T and can’t/won’t pay ridiculous data fees.

        The iPod touch has zero competition, yet it accounts for around 30 to 40 million iOS users.

        I’m thinking of buying a VirginMiFi hotspot with unlimited data which would still cost less than any smartphone plan. Now just add an iPod touch with VOIP/Facetime.

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  3. There might be a new category being defined here: The WiFi Phone. As a heavy VOIP user using a 3G hotspot, there’s a race to a zero cost / commitment model.

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    1. Definitely potential use as a Wi-Fi for some. I anticipate a data only device – possibly a merger of iPod touch and iPhone – once we move voice to data networks in the next few years.

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  4. Kevin, since you already have an Android phone, what do you need the iPod touch for? Is it form music only, or are there other things?

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    1. Great question. In order to cover the mobile space effectively for work, it would be ideal to have devices for all of the platforms. Of course, that can get expensive, especially if some (iPhone is a perfect example) require a contract. I whittled down from 3 contracts to 1 at the beginning of this year but have no iOS handheld as a result. So the the new touch will solve that problem and not add a new contract.

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      1. “…but have no iOS handheld”

        What do you hold your iPad with?

        However, thanks for the interesting and useful article.

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      2. True, I have an iPad, but it’s not something I carry with me everywhere I go, i.e.: it doesn’t fit in my pocket like a phone. ;)

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  5. for me there is a different thing that is huge. i believe there are many who could live with a wifi only VOIP phone and would like the iPod touch to be that for them. but it is not always convenient to use a bluetooth device or headphones. to really attract these users it should be possible when using a VOIP app to hold the iPod touch up to your ear in exactly the way you would hold an iphone during conversation. this means it should have speaker and mic in the same locations as an iphone.

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  6. “So much for check-ins on Foursquare or finding local points-of-interest if there’s no Wi-Fi to be found.”

    Without wi-fi, how would just GPS allow you to check into Foursquare? Don’t you need wifi for that?

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    1. I was wondering this myself. No wifi/data means you wouldn’t be able to push/pull that information anyway, regardless of whether your phone was able to tell where it was in the world or not.

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  7. Was it supposed to be a contract-free iPhone? If the iPod Touch worked as well as an iPhone, why would anyone buy an iPhone?

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  8. I think this is a fascinating development. If you run a Virgin mobile no-contract mifi card with unlimited data for $40/month, and grab a skype or Google voice number, now you could receive wifi calls on the iPod touch and you effectively have a WI-FI VOIP iPhone with no ATT, no antenna issues, a sweeter form factor and the ability to use the mifi to power your laptop/netbook/wifi iPad as well.

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    1. I have a prepaid cell phone for “emergency” use; but my main set-up is a retired iPhone (I was tired of paying $115 per month to AT&T) with a Clear iSpot. I use Skype and TextFree to replace the AT&T service.

      So:
      $30 for Pre-Paid
      $25 for Clear iSpot WiMax
      $10 for Skype (phone #, VM)
      $0 for TextFree
      Total $65, which is a lot less than the $115 I was paying AT&T.

      The devices live in my briefcase and in the office, I have WiFi. I bought a Bluetooth for Skype on my office computer.

      So, I save about $50 a month, don’t use AT&T and I am a walking WiFi HotSpot. Over the course of 2 years (typical contract) I save over a thousand dollars with virtually no downside.

      My dream device is an iPhone with 3G/4G for $30 per month. Then I could ditch the pre-paid (although I’d probably keep it) and the iSpot device (but keep the service).

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  9. If you’re carrying two devices, you’re doing it wrong. :)

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    1. I must have been REALLY doing it wrong until I consolidated devices and contracts earlier this year: was carrying 3 phones plus a MiFi for review and work purposes! ;)

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  10. I’ll be replacing my 1st gen iphone (which has been relegated to home VOIP) with this new ipod. If you have a remotely accessible NAS unit, I’m not sure it makes sense to get the model with the most storage. So, you are comparing a $600 phone to a $230 ipod. Does that make sense?

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