What happens to the iPod touch in a post-iPad mini world?

What happens to the iPod touch in a post-iPad mini world?

When iMore first heard that Apple was going ahead with the 7-inch iPad this fall, and at a ~$200 price point, one of the first things we asked was -- what does that mean for the iPod touch?

The rise of the iPod touch

Apple launched the iPod touch in September of 2007, only a few short months after the original iPhone shipped. It was even more limited than the pre-App Store iPhone, and didn't even include basic internet apps like Mail, but it did provide a slightly lower-priced point of entry for iOS.

In January of 2008 Apple added those internet apps to the iPod touch -- for a price -- and in June of the same year, it got iPhone OS 2.0 and the App Store. The rest, as they say, is history.

Apple updated the iPod touch hardware in the fall of 2008, and again in the falls of 2009 and 2010. Year after year, the iPod touch hardware kept pace with the iPhone hardware, adding new chipsets, gyroscopes, FaceTime cameras, and Retina displays as the iPhone added them.

Then, in 2011, the iPod touch hardware was not updated. It got a new color -- a white option -- but that was it. No new chipset, no new optics.

The fall of the iPod market

Apple's iPod business had been shrinking for a while now. Apple sold 15.4 million iPods in Q1, 2012, down from 19 million in Q1, 2011. Apple maintains that the iPod touch accounts for roughly 50% of iPod sales, but 50% of 15.4 million is still less than 50% of 19 million.

The iPad, released in 2010, likely played some part in that. Though more expensive, it also offered a bigger screen and, for some things, a better experience. The $0 iPhone 3GS, released in 2011, may have also been a factor. Though it lacked a Retina display, the lower up-front cost might have convinced more people to more quickly make the leap from iPod to iPhone.

Yet, to this day, the iPod touch remains the cheapest overall way to access the App Store, and one of the most popular portable gaming platforms on the market. Starting at just $200, with no cellular contracts -- indeed, not even the option for cellular data -- its perfect for kids, for joggers, for developers, for those who want a phone other than the iPhone but still want access to iOS, and for those who simply want a tiny, app-centric tablet for home, travel, or work.

The iPod touch in an iPad mini world

With an iPad mini not only rumored to be coming, but rumored to be coming at the same $200 base price the iPod touch currently enjoys, where would that leave the iPod touch then in the lineup?

Apple has several options:

  • Cancel the iPod touch. This would replace the iPod touch with the iPad mini as the entry-level iOS device, and keep the product matrix cleaner and simpler.
  • Keep the 2010 iPod touch on the market. This makes it the pocketable alternative at the same price, or the budget, iPod shuffle option at an even lower price.
  • Introduce a new, 2012 iPod touch. This brings it back up to spec with the rumored 4-inch, 16:9 iPhone 5 and increases its value proposition at the same price.

Let's take them in order.

Canceling the iPod touch

As far as iMore has heard, Apple isn't canceling the iPod touch or replacing it with the iPad mini, at least not yet. Unless we heard wrong -- and it doesn't seem like it so far -- there will still be an iPod touch on the shelves when the iPad mini joins it.

Keeping the 2010 iPod touch on the market

If the iPad mini hits store shelves at $200 or $250, it makes it seem harder for Apple to sell a 2-year old iPod touch for $200. Even though miniaturization can be expensive, and ultra-portability can be a feature, for many customers smaller is synonymous with cheaper.

Apple could try to offset this with more cosmetic changes -- add "nanochromatic" color options like the iPod nano and iPod shuffle enjoy -- to increase the perceived value, but even that might leave the iPod touch as a tough sell compared to the bigger iPad mini.

Apple could drop the price to $150, perhaps less. But the current bill of goods for the lowest end iPod touch 4 is probably just under $150. If Apple can't reduced that to less than $100 or so, and you take into account manufacturing, transport, and other associated costs, they won't sell it for under $200. They're not Amazon or Google. They don't sell hardware at or below cost.

If Apple wants an even lower priced iOS device on the market, and they can get production costs down enough, this is an option. It just doesn't seem like a likely one at this point.

(Apple has announced that the current iPod touch will be iOS 6 compatible, like all current generation iOS devices they sell. Take that as you wish.)

Introducing a new iPod touch

There was no new iPod touch hardware in 2011, so Apple could certainly introduce an all-new, radically improved iPod touch in 2012. If it includes the new internals from the iPhone 5, and the rumored new 4-inch, 16:9 screen, then it will be seem as an even bigger hardware revision than it might have otherwise been.

The iPad mini will be perceived as all new hardware, and the best way to give the iPod touch a fighting chance at the same or similar price point, is to give it all new hardware as well.

If Apple wants to keep iOS as a premium brand, at least relative to the greater iPod line, then an all-new iPod touch 5 seems like the best option.

Conclusion

The iPod touch may get updated and stand its ground, dollar-for-dollar with the iPad mini, or it might stay around as a legacy device like the iPod classic, or it might stay get even cheaper and become the iPod shuffle of the iOS line. Potentially, Apple could even introduce a new iPod touch at the same price and keep the older one around at a cheaper price.

iMore hasn't heard what Apple plans to do with the iPod touch line yet, but we did hear a couple months ago that the iPod touch line wasn't going anywhere.

And that's certainly good news for kids, for joggers, for developers, for those who want a phone other than the iPhone but still want access to iOS, and for those who simply want a tiny, app-centric tablet for home, travel, or work.

Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, Review, The TV Show, Vector, ZEN & TECH, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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There are 28 comments. Add yours.

cardfan says:

Make it compatible only with the new data sharing plans. With LTE, an ipod touch suddenly becomes more interesting. With apps like facetime over cellular, skype, etc, it'd be cheaper than adding a feature phone if it's classified as a tablet. Carriers shouldn't mind as it slurps data too.

DarshOne says:

i still dont think we will see a mini ipad, and even if we do, i dont see it being 200, but at least 3-400 and replacing the ipad2 instead of the ipod touch.

Garysturn says:

Agree: the 7.85 iPad will cost $ 299 not $ 199. Google's best selling Nexus 7 is the $ 249 model not the $ 199 model.

FlopTech says:

Re: "[...] the iPod touch remains the cheapest overall way to access the App Store, and one of the most popular portable gaming platforms on the market."

Boom. Just one of those reasons would be enough for Apple to keep the touch in the roster. Both reasons, together, make it almost certain.

Re: "If Apple wants to keep iOS as a premium brand, at least relative to the greater iPod line, then an all-new iPod touch 5 seems like the best option."

Agree. There is a tiny chance that Apple could drop the price of the base model old touch to $149 and keep selling it alongside an all-new 16:9 touch. Economy of scale + iOS proliferation would be the reasons for keeping the old one. But if Apple is really serious about the (rumored) 16:9 iPhone, they'll do the same for the touch and go all-16:9 for the touch and the iPhone.

FlopTech says:

Forgot to add that using the same 16:9 screen on the touch and iPhone would help to increase economy of scale on the touchscreen component. Yet another reason to do an all-new 16:9 touch.

Talkmactech says:

Rene
Nobody is seeing what's right in front of our faces
The so called 7" iPad will actually be a 7" iPod. This branding serves to answer a lot of problems with Apple producing a smaller form factor. Read my post @ talkmactech.com for full idea

newdeal says:

7" won't be an iPod because it will get cell connectivity. Regardless they need to lower the price which means to keep the same as the 2010 model and then introduce a newer model with the same price as the current one but give it the larger display and the A5X so it flies for gaming

SockRolid says:

There's no reason why the iPod touch shouldn't get cellular data connectivity. Especially if there's some way to get carrier subsidies to lower the retail price. (But no, don't hold your breath.)

SteveW928 says:

Umm... except that it would then be an iPhone. :)
If I want an iPod on a contract, I'll just get an iPhone. The whole point of the iPod touch is that I just buy it, and I'm done. It does pretty much everything an iPhone does without a budget killing telco plan. I just carry my iPod touch and a pay-as-I-go cheapo cell phone for emergencies.

andwat says:

Well no with an iPhone texting and calling is possible without internet connection and plus he said DATA connectivety and personally I think many would appreciate a 3G/4G enabled iPod touch especially with siri coming to all devices with ios6 later this year. Although I do admit as many phones now have wifi-hotspot capabilities if you already have an internet contract with your phone you can easily connect the two together meaning you have an easily manageable single contract. Additionally with the rumours of the iPhone 5s body shape circling the iPod touch to me looks a sleeker more attractive device to access iTunes and the app store and if a 2012 model is released with advanced hardware it may become one of the fastest and practical ways to use these exclusive apple markets.

Aenean144 says:

They have to drive the nano to 99-129, then the iPod touch could occupy a 149-299 slot corresponding to 8, 32 and 64 GB. At minimum it has to have iPhone 4S guts: A5 SoC with 512 GB. Hoping it will have a 4" 1136x640 TN display.

The current 8 GB iPod touch probably costs 99 to 129 to manufacture. They sell an 8 GB A5 machine in the Apple TV for $99. The cheapo 960x640 TN display can't be no more than $30. Probably 2x that in 2010, but today, no more than $30 after 40 million of those displays have been manufactured.

I think they could hit a 100 to 120 dollar cost to manufacture for it.

It's depressing that there have been zero case leaks, which implies the iPod touch is going to be like the iPod. They'll sell the same model until enough people stop buying it.

9thWonder says:

ipads have no effect on my desire for an ipod. An ipod for me is a portable and most importantly pockateable music player. I don't really play games but even so it's fine for the sorts of games i play like wwf. But i'm never ever gonna walk around with a tablet trying to use it like i sony walkman. It's way too big. To me they an ipod touch and an ipad of any kind simply don't server the same primary function for me. I mean i still have an ipod in my care solely for music instead of a cd changer.

bkDJ says:

I love reading your insight into these kinds of things, Rene, but the editing detracts from my enjoyment, by ruining the coherency of otherwise interesting musings. :( I see a lot of mistakes have been cleaned up on the web page compared to what my RSS reader has, but you missed a few:
"If Apple can't reduced that"
"it might stay get even cheaper"

Anyway, thanks for these long reads that keep us all more informed and thoughtful about Apple and mobile technology in general.

matus201 says:

I was going to buy the iPhone 4s-equivalent ipod touch to upgrade my old 3rd gen iPod Touch, but it was not announced.. I really hope that they will make an hardware upgrade, as iPod touch is my way of staying up-to-date with iOS. I am android phone user, but I like iOS, and want to have a device running it around.

rkevwill says:

A bit over a year ago, when there were all those rumors about a smaller iPad, I asked a good friend of mine, a formal Apple engineer, now with his own company that still does work with Apple, about these rumors. He just snickered, and said "thats not a new iPad, thats a new iPod touch with a larger screen!"

GlennRuss says:

They will have to do something, because the current iPod Touch will no longer be supported. If there is an iPad mini, I still think it will cut deeply into the iPod Touch sales, or it will be the new iPod Touch, hence the reason the line is not going anywhere.

dloveprod says:

I think this year the ipod touch will be upgraded, I'm not to sure about an ipad mini yet. I think a 5 inch ipod touch xl would have been a better addition.

paulrubin3 says:

You left out what Apple's really going to do. They are not going to compete in 2012 at the $199 price point with an iPad Mini. They MIGHT do $249 but that's the lowest they'll go and probably the lowest they have to go for Christmas 2012. $199 maybe a year later. I expect it to be released in 2 flavors (8 gigs and 16 gigs) and 4G LTE might be an option but $130 would be too pricey an option and going less would force them to go less on all the iPads. Then again, with all their devices using 4G LTE variants, maybe they would cut that $130 in half.

The iPod Touch will be available in one configuration and dropped slightly to $179 and will not resemble the iphone 5. There's no reason to bother. There simply won't be much of a market for it. This will be its last holiday buying season so why even worry about it. The fact is, Apple might cease production quietly and then let it go away in January.

Syberiyxx says:

They can't stop the iPod touch because so many middle and high school students cant fit an iPad (or iPad mini) in their pockets. The iPod touch is the first for many young iOS users because it's so attractive compared to their older iPods. Then, once they've tasted the iOS in the iPod touch (sometimes before ever having a phone) they gain a trust and desire for Apple products. The iPod touch is a bridge between iPod and iPhone that would be very foolish to let rot or burn.

thunderstrike76 says:

If Apple does release an iPad mini, then I think Apple will discontinue the iPod shuffle and the iPod classic. Lower the price of the iPod nano, and rename the iPod touch to just iPod. So apples new 2012 line up would be iPhone, iPad and iPad mini, then iPod and iPod nano.

tuffy100 says:

People still use iPod Touches?

SteveW928 says:

Heck yea! It's the iPhone for those of us who can't (or refuse to) give the telcos $100s per month.

Kolmogorov says:

Add 4 inch screen and iPad 3 rear camera (more important) to the iPod touch, then Apple will be able to sell lots and lots of this new iPod touch!

niupaiuser says:

3.7 inch iPod touch, 7 inch iPad mini, 10 inch iPad...
it's OK. Each device covers different people's requirements under various scenarios.

trees247 says:

7inch iPad will be called the IPod touch, or iPod HD or something...not iPad mini..

Dave01568 says:

Apple will give us the iPad mini but call it "the new iPod touch" and it will run iPad HD apps

SteveW928 says:

A 7" iPad might fit into a purse, but not a pocket. There really isn't a comparison between the two to make one a replacement for the other (other than for the kids, where the 7" iPad would probably be the better choice).

boovish says:

I'm pretty sure it will stay available for the idiots that decide that its cool to have an iPod Touch.