iPhone 5 Event Rumors Makes Me Ask, Does Anyone Care About a New iPod Touch?

As Dan mentioned, Apple is rumored to be announcing several things this week, such as the iPhone 5, releasing iOS 6, and possibly the iPad Mini, new iPods, new iMacs, and who knows what else.

We don’t ‘do rumors’ at Gear Diary, but of course we  have heard stuff – as has everyone – and we only have a few days to find out what is real.

So the question I am left asking is: who really cares about a new iPod Touch?

Over the last couple of years the distinction between content creation and content consumption has become increasingly stark, with the iPad standing out from the mobile OS pack as an incredibly capable content creation machine. I call it my ‘80% computer’, and there is NOTHING in the same size and weight class that can do as much across such a breadth and depth of functionality. Nothing. Certainly not a ‘25% computer’ Android tablet, nor a WebOS tablet and not likely the Microsoft Surface before 2014.

But in terms of content CONSUMPTION, things are much more wide-open. Last year the Amazon Kindle Fire opened up the world of ‘low price mid-screen content consumption’, but before then the unquestioned king of content consumption was the iPod Touch. Introduced soon after the launch of the iPhone in 2007, the iPod Touch allowed you to continue to listen to all of your music, view photos, watch videos; and after the launch of the App Store you could play games, read books and more.

And for a while it was an amazing device – like a non-contract iPhone to many, soon you could listen without headphones, record sound, and even take pictures and video! Millions were sold … but then something happened. More and more people were buying smartphones, so there was much less need for a dedicated media consumption device. In fact, sales of ALL iPods dropped significantly year after year:

(image from Cloudave)

So now it is time to look at exactly what has happened that leads me to call the iPod Touch irrelevant.

How has Content Consumption Changed?

Music: two things have happened – smartphones have better battery life, and more and more people are using streaming media. That kills two of the main drivers that caused people to be ‘dual device’ – saving battery and space. Now you can listen to music on your phone with the screen off and not kill your battery.
Video: five years ago watching a movie on a 3.5″ screen was not optima,  but the performance and clarity was so much better than previous Pocket PC devices that we all were happy to be able to watch on the go. Now the overwhelming majority of phones offer larger than a 4″ screen and a microSD card for storage, making 3.5″ screen simply too small for anything more than a quick YouTube clip. And given the explosion of low-priced 7″ tablets, the thought of video on such a small screen is laughable.
Photos: put simply, smartphone cameras no longer suck and the screens are quite good, so people simply view images on their phones.
Games: more and more games are attempting to deliver a deeper experience, better graphics, a more robust gameplay, and versions that scale across devices. The iPhone remains very popular as a gaming device, but the contrast between the iPad and iPhone gaming experience is stark. I have written about how much better gaming is on a 7″ tablet where your fingers don’t obscure >50% of the screen before.
Apps: Similar to gaming, the focus of information delivery on a 3.5″ screen is very different than for a 7″ or 10″ screen. It is simply not possible to deliver the same depth of app on such a small screen.
Price: for me this is the ultimate killer. A 8GB iPod Touch with 3.5″ screen costs $199 – the SAME PRICE as a 8GB first gen Kindle Fire or Nexus 7! Now Apple is releasing into a market with a 16GB Kindle Fire for $160 and a 16GB Kindle Fire HD for $199. There are TWO reasons to buy an iPod Touch based on that, which I will address below.

What Market is Left for the iPod Touch?
Kids: it has been shown that when you look at the market for things like the Nintendo DS and Sony PSP and iPod Touch, the devices dominate the younger audiences. And with the sales declines for the Nintendo 3DS and lack of sales for the Playstation Vita, the slack was largely picked up by the iPod Touch. Everywhere I go from airports to malls and beyond I see kids with an iPod where I would previously have seen them holding a DS. And the 8GB pricing actually works in this case.
Apple-centric households: pretty much every option I mentioned above requires ‘jumping ecosystems’. Many homes have some Amazon tie-ins, whereas only adult male techies have any significant Google Play content (gross generalization, I know); but pretty much EVERYONE has some stuff from iTunes. Adding a device to your account is trivial and is much more cost effective – and in the case of kids gives you much better control.
Need a ‘Pocketable’ device: I can – and have – slid my Nexus 7 into my front pocket in a pinch. But it isn’t a pocketable device by any stretch of the imagination (sorry, if you are going to try that argument, no … you are wrong). For my kids – even thought they are 6’2″ and 6’3″, sliding an iPod in their pocket with earbuds is trivial.

So What Should Apple Do?

While sadly Apple hasn’t come asking me for advice, but here are some unsolicited ideas:

  • Focus on the iPad Mini – the race is on in the mid-market, where portability meets price. Amazon and Google are peeling off customers – NOT from the iPad, but instead from the iPod.
  • Release a $99 iPod Touch with full capabilities – make this THE thing for the 6 – 12 year old set to get at the holidays this year. Something you can afford, that is cheap enough to be replaceable, and fully support apps and camera and iOS 6.
  • Don’t push the size too large – personally I would rather have a 5″ iPod Touch than a 7.85″ iPad Mini. But that is ME – and NOT most people. Apple needs to segment the market effectively – small, medium and large screens.

That is what I think Apple SHOULD do … so what do I think they WILL do? Frankly I think they will release a 4″ iPod Touch in 8/32/64GB capacities with loads of upgraded hardware … and the identical price points.

What do you think Apple SHOULD do – and what they WILL do?

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2 replies

  1. I still see the touch as the iPhone/iPad “training wheels” device and in that regard i think there is and will remain a market and a justification for the existance of the device.

    Small kids shouldn’t have an iPad. Yes, smartphones are making their way into kids hands at a younger and younger age. (When I saw half our gradeschoolers having phones this past opening school day I was surprised.) Still, despite more kids having phones than ever most parents still don’t want their kids to have an iPhone. Some don’t want them to have anything but for those who do, the touch is the device to get. It brings kids into the ecosystem and, in the process, locks them into eventually getting an iPhone and/or iPad.

    I also like having a touch because it is lighter, gets better battery life and, we’re something to happen to it, I would be less concerned.

    Still, I agree that dropping the price to $99 would be a brilliant move. Still, I do hope they release a larger upgrade tomorrow.

    • Well … I think we basically agree on several things:
      – The iPod Touch is more of a niche product than ever
      – to remain attractive as the ‘entry level iOS device’ it needs a refresh/bigger screen
      – Pricing is still a big question … especially with the $399 iPad 2 and potentially cheaper iPad Mini.