Following Apple's It's only rock and roll, but we like it special music event, CEO Steve Jobs, fresh from his return to the keynote stage, sat down with the New York Times, and while several topics were discussed, here's the "big question" (and answer):
POGUE: You put a camcorder on the iPod Nano. Why not on the iPod Touch?
JOBS: Originally, we weren’t exactly sure how to market the Touch. Was it an iPhone without the phone? Was it a pocket computer? What happened was, what customers told us was, they started to see it as a game machine. Because a lot of the games were free on the store. Customers started to tell us, “You don’t know what you’ve got here — it’s a great game machine, with the multitouch screen, the accelerometer, and so on.”
We started to market it that way, and it just took off. And now what we really see is it’s the lowest-cost way to the App Store, and that’s the big draw. So what we were focused on is just reducing the price to $199. We don’t need to add new stuff — we need to get the price down where everyone can afford it.
So Apple would rather have cheaper third gen iPod touches than more feature-complete ones. Interesting strategy, given what the Zune HD will soon bring to the market (that, admittedly, Apple owns 73% of....) Is Apple's 30% cut of App Store profits suddenly more enticing than their traditional ~30% margins on hardware? Because here's the thing, not many people will see the 3rd gen iPod touch as much of an upgrade path from the 2nd gen, so Apple's leaving that money on the table. Add a camera and mic, and, well, there's that hardware upgrade gravy train that usually runs so regular-like from Cupertino Central. Or maybe they just think the cheaper entry price will get more than enough new buyers intereste
Other questions asked and answered include Jobs' opinion on the Kindle (people prefer integrated devices), why the new iPod nano doesn't shoot stills (VGA quality stills aren't good enough), and how's he feeling (enjoying the ice cream!)
Check out the full interview for the full Jobs...
[Thanks to everyone who sent this in!]