One example always cited of Steve Jobs’ genius at the helm of Apple is his decision to kill off the iPod Mini, the best selling product at the time, and introduce an entirely new product line in its place, the iPod Nano. It was a bold move, unexpected, and one competitor such as HP or Microsoft would never have contemplated doing. It worked too, as the iPad Nano became a best seller, ushered in an era of flash memory iPods, and is still part of the lineup today. Apple has always been about innovation, and Steve Jobs knew better than anyone else that if you stand on your laurels, your company will quickly fade into the background. Realizing that is the Tao of Apple, I suggest they should make a bold move at the upcoming iPhone/iPod fall event… Apple should kill off the iPod Touch.
The iPod Touch has always been a bit of a strange device, basically, a stripped-down iPhone, without any phone or cell data capability. It was called an iPod, but was completely different from Apple’s older iPods that focused almost solely on music. The iPod Touch became an iPhone for people that didn’t want the burdensome cell phone contract but wanted to play all the cool iPhone games and use all the iPhone apps. It no doubt has been very successful and probably accounts for more sales of iPods than any of the other iPods. Yet, it still seems like an illegitimate child, not quite up to the iPhone’s status.
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.
First, if the low-end iPhone sold, without a contract, for around $200-300, it would be in the same price range as the iPod Touch and would draw the same buyers. However, it could potentially draw in many more buyers with the fact it could also be used as a phone by simply putting in a sim card. It would be a dream device for many that want to simply use ‘pay as you go’ plans and don’t want to be locked into a 2-year contract. Apple probably also has the clout to make a data plan option, a la the 3G iPad, so that you could simply buy a month’s worth of data on your iPhone, without even having a voice plan. It could basically be the 3G iPod, with the added benefit of you being able to make it a full-fledged iPhone if you desire.
The low end iPhone would also simplify Apple’s product line, as they could sell either the high end or low-end iPhones, and steer people only interested in a music player to the iPod Nano, Shuffle, or Classic. Right now, it’s a bit confusing to buy the iPod Touch, because if you really want one, you most likely should be buying an iPhone. In the age where almost everyone has a cell phone, it seems antiquated to have to have both a cell phone and iPod in your pocket. Apple could get rid of that confusion in whether to buy an iPod Touch or iPhone by basically combining them in the form of the low-end iPhone.
Killing off the iPod Touch would also have extra benefits to Apple such as lowered manufacturing costs, as Apple could reuse iPhone manufacturing to produce low end iPhone parts, instead of making an entirely separate device. The cell phone carriers might also like the extra opportunity to sell voice and data plans to people. You could even see the low-end iPhone being offered for free with a 2 year contract.
If Apple did replace the iPod Touch with a low end iPhone, they also would have to make sure the high end iPhone was significantly more advanced, or else most people would simply buy the low end version. I think having faster processors, higher-end camera, and more storage would be good differentiators. Even with that, I’d still be tempted to simply buy the cheap iPhone and not be burdened by an excessive contract.
We’ll have to wait and see what happens at the fall event. It seems like doing a dramatic move such as this, after Steve Jobs has stepped down, would signal to the world that Apple is still innovating and continuing to do the things that made it successful in the past. Also, this would be the first time the iPhone and iPod events were combined, so what better time then to basically combine the products by replacing the iPod Touch with the low end iPhone.