With more and more rumors about the upcoming 3rd gen iPod Touch popping up as we get closer to the yet-to-be-announced iPod/Music event that Apple traditionally holds in September, there is still one question that I keep pondering:
Will Apple de-feature the 3rd gen iPod Touch to protect the iPhone?
We’ve seen numerous spy shots allegedly depicting the back of the 3rd gen iPod Touch. Regardless whether the camera sits in the middle (as depicted in the most recent shots) or to the left as in the iPhone, I firmly believe that there will be a camera in the iPod Touch.
However, that does not tell us what camera is in the iPod Touch, whether it is the same hardware as in the iPhone and, more importantly, whether video will be included. While I do believe that Apple would want to control cost by sharing the same camera hardware between the iPhone and the iPod Touch (remember, the cost for the camera increased by 30% in the iPhone 3GS), the software could very well differ.
Why would Apple want to de-feature the 3rd gen iPod Touch?
When Apple released the 2nd gen iPod Touch, Apple differentiated it from the iPhone 3G by not including a phone, GPS or a camera. Similarly, when Apple released the iPhone 3GS, it did not include video in the OSX 3.0 update delivered to iPhone 3G owners, even although its camera would have been able to capture video as well. So there is a track record of Apple not back-porting all functionality to older versions of the same product or of Apple not including every feature in the iPod Touch.
Given that Apple rests on the “tripod” of Mac, iPhone and iTunes (no, not iPod), Apple must be worried about protecting the now very well established iPhone brand. In fact, if the iPod Touch will be released with the same photo/video capability as the iPhone 3GS, I will not be the only one seriously tempted to ditch my iPhone for the 3rd gen iPod Touch. The economics would support this (see here on the Verizon MiFi, esp. if Apple were to also announce a tablet); so would the opportunity of getting away from AT&T which is now seen mainly as a burden to Apple. Also high-profile “technorati” defections away from the iPhone have an impact on the iPhone brand (quickly: which technorati has openly defected from the iPod Touch? I don’t know a single one).
Apple knows this. They know releasing a full-featured iPod Touch will cannibalize some of their iPhone sales. As someone with quite some experience in brand management, I would advise Apple to protect the iPhone brand at all cost. Even if it means to (continue to) de-feature the iPod Touch. Given the current trouble Apple is in with regards to the AppStore, they might just play this one safe. And take away some functionality from the iPod Touch to keep the iPhone franchise strong.
Personally, I hope they will release a full-featured iPod Touch. But would I bet on it? No!
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