ipod-touch-2010It turns out that the iPod Touch 4 is going to be just as good an e-book reader as the iPhone 4, but is not quite up to par in other respects. On GigaOm, Kevin C. Tofel writes about why the iPod Touch 4 is almost but not quite the “contract-free iPhone” Jobs touted it as. In particular, he focuses on the lack of built-in GPS, data plan connectivity, and the 5 megapixel camera that graces the iPhone 4.

The reason for this is that, regardless of what the pricing article I cited the other day indicates, Apple actually earns a lot more money per iPhone than per iPod Touch.

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.

Of course, as readers (including me) point out in the comments, there are a number of quite reasonable options (such as Virgin Mobile MiFi) for providing an iPod Touch 4 with a data plan, and the other things can be more or less done without for the price. Certainly there’s enough compatibility with the iPhone 4 that people who would like to communicate with iPhone 4 owners via FaceTime but don’t want to have to put up with the AT&T contract indenture can buy it without thinking twice.

I’m a little disappointed, myself, at the lack of the 5MP camera. From a book standpoint, such a camera would have been very helpful to people wanting to do impromptu OCR. But it’s still an even better e-book reader than previous iPod Touch models, so perhaps it’s best to focus on the positive aspects.

I wonder whether in years to come Apple will eventually grace future models of the iPod Touch with more iPhone-like features. After all, this is the first time the Touch gets any kind of camera at all, and it’s actually getting two at once. (One thing I haven’t seen anybody else mention is that the new iPod Nano actually lost its camera, and voice recording capability, because Apple determined hardly anybody used them anyway.)