Apple Gives iPod a Touch of iPhone

After more than a week of furious industry speculation, the word from Apple was finally announced Wednesday, and it was, in fact, an iPod.

Apple Gives iPod a Touch of iPhone

It was actually a raft of new iPod and other developments, announced to a rapt crowd of reporters gathered at the Moscone West expo center in San Francisco.

Among the highlights of the announcements were the new iPod touch, an ultra-slim iPod nano, a 160-gigabyte iPod classic, and new colors for the iPod Shuffle. Apple also announced the iTunes WiFi Music Store and kicked off the holiday shopping season by dropping the price of the iPhone from US$599 to $399.

‘Landmark iPod’

The iPod touch features the iPhone’s multi-touch user interface and 3.5-inch widescreen display, and measures just 8 millimeters thick. It comes equipped with Safari, a YouTube application lets users wirelessly watch over 10 million free videos, and the new iTunes WiFi Music Store, which lets users wirelessly browse, preview and buy songs and albums.

“The iPod touch is a landmark iPod, ushering in a whole new generation of features based on its revolutionary multi-touch interface and built-in WiFi wireless networking,” said Steve Jobs, Apple’s CEO. “People are going to be amazed at how thin it is and how much it does.”

The iPod touch is slated to be available later this month; prices start at $299.

All-New nano

The new, redesigned iPod nano, meanwhile, brings video playback, an enhanced user interface, and a larger, two-inch display with 204 pixels per inch to the popular music player. It delivers up to 24 hours of audio playback or five hours of video playback on a single charge, and is encased in a new, all-metal design in five new colors: silver, black, blue, green and what Apple calls the (PRODUCT) RED special edition.

“We’ve taken the most popular music player in the world and added stunning video playback just in time for the holiday season,” Jobs said. “The iPod nano just keeps getting better and better with each new generation.”

Available immediately, pricing on the new iPod nano starts at $149.

Classic Edition

Then there’s the iPod classic, available immediately with either 80 or 160 gigabytes of storage for up to 40,000 songs or 200 hours of video. The $349 160-gigabyte model features up to 40 hours of music playback and seven hours of video playback on a single charge, while the $249 80-gigabyte model provides up to 30 hours of music playback and five hours of video playback.

“The first iPod put 1,000 songs in your pocket — this new iPod classic can put 40,000 songs in your pocket,” said Jobs. “With a thinner, all-metal enclosure and an enhanced user interface, the iPod classic is ideal for people who want to hold everything on their iPod.”

World of WiFi

Finally, Apple also announced the iTunes WiFi Music Store, which gives music fans the ability to browse, search, preview, purchase and download songs and albums from the iTunes Music Store over a WiFi network directly onto their iPod touch or iPhone.

No computer is required for immediate listening, and any downloaded music will automatically sync back to a user’s iTunes library once the iPod touch or iPhone is connected back to their PC or Mac.

iTunes customers will also soon be able to create custom ringtones from over a million participating songs on iTunes and easily sync them onto their iPhone. Pricing will be 99 cents to make a segment of a song up to 30 seconds long into a ringtone, and users can set custom fade-in and fade-out points.

Both the new iTunes WiFi Music Store and custom iTunes ringtones for iPhone will be available later this month. iTunes 7.4 is available immediately as a free download. Starting next month, customers will be able to use the iTunes WiFi Music Store without connection fees or hotspot logins at participating Starbucks locations, Apple also announced.

Impulse-Friendly Device

By offering an iPhone-like device without the phone service, Apple may be able to reach a new segment of customers, Stephanie Ethier, senior analyst with In-Stat, told MacNewsWorld.

“The iPhone was an incredible introduction, but unlike with the iPods, consumers couldn’t walk into a store and make an impulse buy, because they needed to factor in the service contract, which requires more thought,” Ethier said.

“I think the new iPod touch is a great introduction to get more people on the spur of the moment,” she added. “It’s an incredible multimedia device on par with the iPhone for customers who don’t want to sign up with a new cellular service.”

Pricing Strategy

Apple’s pricing decisions were among the most interesting features of the new rollout, Ricky Spero, anchor for the MacObserver’s Apple Weekly Report podcast, told MacNewsWorld.

“The pricing is now a little cluttered in the top half of the iPod line,” he explained. “They’ve clearly differentiated the iPod and the iPod touch to justify that cluttered pricing.”

At the same time, “by offering the high-end iPod touch for the same price as the iPhone, for which Apple gets subscription revenue, Apple is begging people to buy the iPhone instead,” Spero noted. “Jobs said he wants Apple to be more aggressive — well, that’s extremely aggressive.”

Storage Strategy

Apple’s decision to differentiate the iPod classic and the iPod touch by storage is also an interesting one, he added.

Consumers who want storage will opt for the iPod classic, Spero said, while those who want a “fancy new iPod” will go with the iPod touch.

“They’ve clearly decided there’s a role for a large-storage iPod, but it’s got this old screen and it looks dated compared to the iPod touch,” Spero said. “Once customers see the iPod touch and have the choice of that huge screen, it will be interesting to see what happens to the iPod classic.”

A Wider Spectrum

In the end, Apple’s rollout not only refreshes its product line for the holiday season, it also spurs a replacement cycle and shows that the company can learn from experience, Kurt Scherf, vice president and principal analyst with , told MacNewsWorld

“Amid everything that has been said and written about the iPhone, that touch screen was clearly one of those future-forward features,” Scherf said. “Apple scores a point for its ability to take what it learned in the development of the iPhone and to bring it to the iPod to enhance the experience there.”

In the long run, Apple must be able to provide differentiated products to a widely segmented market, and that means focusing more on price, Scherf concluded: “Now Apple can play a wide spectrum, from the low end all the way up to the premium player.”
Apple Gives iPod a Touch of iPhone

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