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.)


  1. Chris, I share your disappointment: it would have been nice if the new iPod Touch 4 came packed with the iPhone’s high-quality 5 MP camera.

    On the other hand, one could argue: “Want to take pictures? Get a camera.”

    The French say: “Dissatisfaction is the seed of change.” …
    My disappointment in the iPod Touch camera led to the discovery of a better camera: the Fuji FinePix s2800 HD.

    Still, there are many reasons for enthusiasm about the iPod Touch 4 — especially for reading ebooks, with the 326 dpi “Retina display” screen.

    I will probably take a chance on the new iPod touch, to test it for reading ebooks. Steve Jobs has done the impossible once again — figured out a way to send some cash flying from my thin wallet directly into Apple’s fat accounts.

    ==About the “Retina Display” on the iPhone 4 and iPod Touch 4 ==

    Apple’s Website

    Retina Display claims bashed by a Critic

    And the Critic is Refuted by Another

    == About the iPod Touch, in general ==

    Steve Jobs video

    Apple website

    Gushing review on Softpedia

  2. I find this whole discussion quite bizarre. If they make the Touch more like an iPhone then it will be an iPhone and not a Touch and then what’s the point of selling a Touch at all ? It’s all very silly imho 🙂

  3. Howard, my last reply was a quick one done on the iPad.

    If one looks at what has been left out of the $299 iPod Touch 4 (not 4G): it does not have a cellular antenna or the (new and hence likely to be expensive to produce) chipset for 4G cellular service, and it has a much inferior camera with lower resolution (0.69 Mpx still, 0.92 Mpx video) than _any_ iPhone camera. The iPhone 4 has a 5Mpx camera. Some other bits and pieces are likely also not there. Add those bits back in and, lo and behold, you are likely to be in the no-contract $699 price range of the 32GB iPhone 4.

    Seems to me quite reasonable that the “missing bits” would have a factory cost in the vicinity of $80, which would account for the $400 differential (assuming a fairly typical Asian factory to US retail store multiplier of 5).

    I figure a “bare bones” 2-year AT&T contract (based on a Southern California address), added to the $299 contract price, would put the all-in cost at pennies under $1,650 before taxes … that would be a contract with no allowances for text/IM/picture/video messages, for which you’d pay per use and go broke using your cameras…

    Anyone who thinks Apple could just “plug in” a couple of circuits and some software to turn the iPod Touch into an iPhone has no idea what is inside these devices. 🙁

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