Could Apple replace iPod touch with a budget iPhone?

Could Apple replace iPod touch with a budget iPhone?

VintageZen has a post up asking what place in Apple's lineup the iPod touch would serve once a budget iPhone hits the market, especially if it's ultra-cheap and Apple can strong-arm the carriers into offering pay-as-you-go plans and iPad-like month-to-month data plans. Also, unicorns.

With the coming fall event, this is Apple’s opportunity to make a trademark dramatic move and kill off the iPod Touch from their product line. However, they shouldn’t just leave a void where the iPod Touch once was, they should replace it with the much rumored low-end iPhone. The low-end iPhone would fit perfectly into the market where the iPod Touch was, and in many ways would be better than the iPod Touch for most consumers.

Daring Fireball thinks it could help equalize the iPhone product vs. Android OS numbers metrics companies love to trot out.

It makes sense in a lot of ways for Apple. Simpler product lineup. It would even help with “smartphone market share” numbers — iPod Touches are dark matter in such comparisons that only count “phones”. Plus, I don’t recall seeing (or hearing privately, myself) any rumors about a new iPod Touch for this fall.

TUAW battled this out back in June. The whole debate is worth reading (check this link below) but in sum:

Apple has removed the "iPod" branding from iOS 5. In iOS 4 and earlier, both the iPhone and iPad handle music playback via an "iPod" app, but in iOS 5 these two devices instead have a "Music" app just like the iPod touch. It may mean nothing, but it's still an interesting move considering the iPod was Apple's top-selling product for so many years.

Apple certainly has killed products, even best selling products like iPod mini (which was replaced with iPod nano). Right now iPod touch sits in the middle of the road -- no phone, no 3G, no large screen. If the budget iPhone really is cheap to buy and cheap to run, is there any space left for the current style iPod touch? Or do those two lines become one?

[VintageZen, Daring Fireball,

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Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

Could Apple replace iPod touch with a budget iPhone?


Renee do u remember that one night u cock slapped me so hard that u left a mark in the shape of ur penis on my face sand u told me I was a bad girl for using ur iphone as a vibrator. Well it looks like I need another punishment because ur phone is currently up my vagina

It would be AWFUL for the education market. Schools buy lots of Touches for education apps, but I don't see them anteing up for phones.

Everybody does not want a phone and monthly charges. Like teens and people that just want it for portable games.
The Apple people that bought the highest level of almost every apple product need to understand that everyone is not part of that market.

You're missing the point though, the capabilities can be there and you don't have to use it, that's fine. Now if budget-iPhone is way higher in price from the iPod Touch, then it won't be a good replacement or people will have a hard time making the switch.

you're missing the point. right now you can't get a phone at a cheap price without a two year phone plan. nobody that doesn't want one will do that. and prepaid is much less profitable for carriers so the idea that apple is gonna force companies to take that at a los is crazy. they'll just not subsidize the "cheap phone" making it expensive.

I don't think you're getting it...when they say budget-iPhone and talk about it replacing the iPod Touch, that would mean the price would be very similar to the price of the current iPod Touch. If they made the price higher than that, it wouldn't make sense, which I agree with.
In regards to Apple "strong-arming" the carriers, that wouldn't be a problem since Apple already did it when the came out the iPad 3G...

It makes sense to me, but I think that there are still many people who just want a mobile device to consume media content or playing and don't want a phone, or maybe prefer Android in that field. Plus, the iPod's design it's much thinner and lighter due to the lack of some of the iPhone's hardware which make it a little bit different, maybe appealing to a slightly different public.
That said, I'd completely understand if Apple decides to kill this device...(I hope they don't).

The money is there after the sale (Apps and in App purchases). A budget iPhone is needed and would do well in the marketplace. But there millions of people who dont want to be tied down to a data plan or cell plan. This would probably be a poor move and met with a hostile reaction from consumers.

Not sure it would make sense to "promote" the iPod touch into a low-end iPhone. I think iPod touch sales are (or were) roughly equal to iPhone. This proves there's a market for a small-screen iOS device without a phone.

They should ditch the iPod nano and classic. Instead of killing it, kill the iPod product line. Then rebrand the iPod Touch as iPad Nano. The iPad is so hot right now, why not expand it?

I don't get this "budget iPhone" thing. You still need to pay the contract and I know many people who are still not willing to pay extra for the data plan. The price is moot IMO. The 3GS is $50, that is not that great a hurdle over "free". Again, IMO the data plan cost is the larger hurdle.

Exactly, you only pay for the data if you need it. I personally have a iPod Touch and can't tell you the amount of times I want to browse the web but find myself in a position where I'm not close to wifi. The PRICING of the data plan on such a device is the bigger hurdle I think....

I could be wrong but the major carriers no longer offer pay as you go data plans. The iPad data plans are just no contract, I think, so you can add it one month and then drop if the next if you won't need it. Don't count on that for cell phones. They are paying huge subsidies for these phones and will make the money back with the monthly fees.

It would be foolish to kill off the ipod touch market. They sell tons of apps as it is on the platform.
A lot of people want the apps without a data plan. To neglect those users would be a pretty big mistake. There already IS a budget iphone, its the 3GS. What they should do each year is make the previous years design a budget 8GB model as the next one launches and also release an ipod touch using the previous iphones chipset. That way they keep the ipod market , the budget iphone market and the cutting edge iphone market thriving. This shouldn't be a one or the other sort of decision.

-- "It would be foolish to kill off the ipod touch market. They sell tons of apps as it is on the platform."
There's not that much money in apps...
Apple would much rather sell a $600 iPhone than a $230 iPod Touch.
Apps and music are there to help sell their products.... but Apple is primarily a hardware company...

Problem with that is getting people to commit to a data plan. The number one reason people I know won't buy a smartphone is the data plan. Unless they do a reasonable pay as you go data plan (yeah right, the carriers will never let that happen) the ipod touch still makes sense. Like I said, they essentially DO have a budget iphone right now and it is selling. They don't need to kill off one of their markets to encourage the other. All of their stuff will sell.

Apple offers a 32 GB iPod touch for $299. I don't see them offering a contract free iPhone for $299 with 32 GB of storage. 8 GB or 16 GB maybe, not 32 GB. I'm still expecting a 64 GB iPod touch for $299 and a 128 GB iPod touch for $399. So, no, not yet.

that's one but also, I have an android device but have an ipod touch for all the app i purchased when i was on my iphone

I don't think they would do this at first. I think they would run them side by side for a year to see which people prefer. And to see if the cheap iPhone ate into iPhone 5 sales. Essentially to make sure people where upgrading to touches to that and not getting the cheap iPhone instead of the iPhone 5.
However, what I think would be more likely is a iPod Touch 3G. This would make sense because Apple wants to move all of your communications into their ecosystem. They want you to use their messaging app instead of SMS, FaceTime instead of carrier minutes, etc. This would help with the whole peer pressure aspect of Apple sales. If half your friends have iPod Touch 3G's and use FaceTime for all their calls, many would consider getting one too and going to a cheaper dumb phone with low minutes. Combine this with the possibility of Skype calling and you could eliminate a phone all together and go to an iPod.