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peter

If Apple comes out with a 3G (or 4G) iPod touch, would you consider replacing your iPhone with one?

[Note: this is an draft of what will probably be this week's gdgt newsletter. Your feedback is welcome! If you want to sign up for the newsletter it's at gdgt.com­/newsletter .]

Probably my favorite rumor going around right now is that Apple is going to offer a version of the next iPod touch that comes with a 3G -- or possibly even 4G -- radio built-in, kind of like how they do with the iPad already.

It seems like an obvious move, right? Supposedly 3G versions account for about two-thirds of the iPads that Apple sells (even if many are never activated), so it stands to reason that a 3G-enabled iPod touch would do well. We've seen over and over again that you need to be able to get online to realize the full value of a connected device, and, for a portable device having only WiFi, just isn't going to cut it for most people.

Apple has been trying to figure out how to broaden the market for the iPhone, and, while it does look like they'll do some sort of cheaper "iPhone 4S" alongside an iPhone 5, I think an iPod touch with 3G could open things up even more.

For starters, there's a growing number of people, especially those under the age of 25 or so, for whom phone calls are now a secondary activity. Texting, Facebook messaging, and IM are their preferred means of contacting someone. Many teenagers pair an iPod touch for media and apps with an inexpensive featurephone (often on a family plan) for calls and messaging. A 3G iPod touch would let them get online anywhere and off-set the cost of the data plan by using a free app to ditch the text messaging plan on their phone.

Personally, I hardly ever use my smartphone for calling. I often go days without making a single call (I checked my account history and I average about 40 minutes of calls a month) on my phone. If I have to make a call of any length, I usually do it at a computer using Skype or Google Voice. At some point you start to wonder why such a large percentage of your wireless bill goes to something you're using less and less with each passing month. I'd be happier to pay more for data -- which I use constantly -- if it meant I could pay less for something I hardly use. If I could use Skype or another VoIP app for those few calls I'd make that'd be even better.

I know I'm an outlier -- I don't expect the industry to cater to me at all -- but there's no denying that our patterns of mobile usage are changing. According to a study by Wireless Intelligence earlier this year (https:­/­/www.wirelessintelligence.com­/analysis­/2011...), smartphone users in the US and UK spent about twice as much time using apps and the web on their phones as they did making calls. The number of people who would be happy to ditch their minutes plan altogether probably isn't all that large at the moment, but it's definitely going to grow over time.

Would the carriers get behind a 3G iPod touch? It seems unlikely. Right now they REALLY like that you have to buy a voice plan and a data plan together. Though prices have steadily declined over the years, the profit margins on voice minutes are still much fatter than for data, and it can be damn near impossible to get a data-only plan for your phone out of a US carrier (even using an iPad's microSIM with an iPhone can be a hassle). They're totally fine with selling data-only plans for tablets, since you're probably not going to use one to replace your phone, but an iPod touch (and at this point they should probably start calling it just the "iPod") paired with a $15 or $25 a month data plan would make for an acceptable iPhone substitute for plenty of people. It's a little hard to imagine the carriers jumping at the opportunity to sell devices that let you pay a smaller amount of money each month to do most (or for some people all) of the things you want to do with your phone these days.

Sooner or later everything is just going to be data. Running voice calls and texting over a separate system is a legacy thing, and we're already starting to see tests of stuff like Voice over LTE by several carriers as they plan to move away from circuit-switched networks and towards a pure VoIP calling system. Carriers are promising big improvements to call quality, using higher bit rate codecs to offer "HD voice".

But even after that changeover to VoIP finally happens (and it will take years), the carriers still may not change the way they bill us for service. I'm sure they're going to take advantage of the fact that they've been selling buckets of minutes and texts to us for ages to continue to charge us specifically for those, even if everything is routed over one IP network. Despite the fact that many of us would be more than happy to go data-only and use a VoIP app for our calls and a messaging app for texting, given everything I know about the wireless industry, it's hard for me to imagine the carriers unbundling voice and data -- unless the FCC comes in and mandates it or something like that.

All of this means, that even when the carriers go IP-only, you still might not be able to get just a data plan for your phone (at least not without paying some stupid premium for it). The carriers want to avoid becoming dumb pipes for as long as possible, and so are going to try and hold on to stuff like voice and messaging for as long as possible.

None of this rules out a 3G-enabled iPod touch, of course. It's possible that Apple will figure out a way to get the carriers to acquiesce -- they've certainly been successful at getting them to change their ways before. It's just that it's never easy to get them do something they perceive as not being in their long-term self-interest. If it happens, it may be because Apple deftly plays one of the carriers off against the other, fueling its insecurity about being left out while one of its competitors reaps the benefits of what would probably be substantial sales of 3G iPods.

So, assuming that Apple does introduce a 3G iPod touch, would you buy one? Would you consider replacing your iPhone with one if the price were right?
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richardlawler

As much as this makes some sense I don't think it would fly. There are just a couple of factors that get in the way:

- iPod touch is primarily a youth market product. It is primarily a replacement for the iPod and GameBoy. iPod touch sales are largely boosted by the fact that you need neither credit nor a steady income to own one -- neither is true of a smartphone.
- Parents buy cell phones (and pay for cell plans) for teens so that they can communicate with them when needed such as emergencies, transport communications, peace-of-mind. A single replacement device MUST replace all of those uses.
- Teens get ubiquitous, universal text messaging as side-effect benefit of needing to carry a cell phone for communication. A replacement device MUST provide universal, ubiquitous messaging. Text messaging plans are generally cheaper than IP data plans.
- Internet connectivity of smartphones is a side-effect benefit of carrying a smartphone with mandatory data plan, but smartphones are still largely a luxury item since there is not really any essential functionality for teens that trumps a cell phone.

Bottom line -
Parents and guardians subsidize the teen cell phone business. It can only be replaced by a service with better quality of service than a cell phone. Mobile VoIP solutions don't match cell service QoS.

If you aren't going to replace the teen cell phone, but instead augment a cell phone with a 3G connected IP device (such as a 3G iPod touch) then the combined total cost must be less or the added convenience of a 3G iPod touch with a data plan must be huge. Adding a data plan to the iPod touch doesn't reduce the cost. I don't know what convenience feature could be added to the package to trump a cell phone.
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MtnSloth

My voice minutes are very similar to yours, Peter. However, those voice calls tend to be extremely high value and irreplaceable. They are generally a concession to those in business or my family that just won't use any other means of communication. If I could plead poverty, I would drop voice in a heartbeat; but I suspect there are many like me - we can not look our parents in the eye and say: "Dad. Mom. It is just not worth $40 a month to take your phone calls."
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frankspin

As others have noted, such a large segment of ipod touch users is made up by the pre-teen and teen market which is supplemented by parental income. What makes the iPod touch so attractive to families is it gives families the ability for their son/daughter to have a hip, cool device without the added fees of SMS & data plans. Instead they can keep their children using feature phones and only pay the 9.99/month for cell service.

The segment of the market where this could really do well -- on the go workers, heavy commuters, etc -- is already being dominated by the emerging tablet market. If faced with getting a 3G/4G 10" tablet or a 3G/4G 3.7-4" device I'd pick the 10" tablet in a heartbeat. Reading quick things on a phone isn't terrible but reading longer form things would just become a bit of an annoyance.

If Apple made a 7" iPod touch/iPad it'd be a different story but if it's just going to be the size of a phone, no way this gains huge momentum.
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JasonTsay

As much as I think we're heading towards an all data future, I doubt Apple will release a data enabled iPod Touch. Why? They don't want to blur the lines between the iPod Touch and iPhone product lines. Rather than a 3G iPod Touch, there are actually rumors that Apple is going to kill off the iPod Touch in favor of a lower end iPhone.

The iPad gets to have a data enabled 3G model because it's a tablet. It's a new type of product and Apple did the right thing by making it an unsubsidized device. On the other hand, the iPod Touch has always been an odd product. It's essentially the iPhone without a phone for people who don't want to sign a phone contract. Its reliance on WiFi allows Apple to sell it without a carrier partner and to a much wider audience.

What about the price? Traditionally, unsubsidized data devices have cost upwards of $400-500. Apple's own iPhone 4 costs $650 off contract. So if Apple were to release this 3G iPod, how much would they price it at to avoid cannibalizing part of the iPhone market?


But to answer your question, will people replace their iPhones with this data only iPod Touch? I think not. The data only future seems pretty close but the fact of the matter is people still need phones. The techie community is smarter and might be able to find data alternatives for their standard phone uses but most people who own iPhones actually use it as a phone for calling and texting.
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groovechicken

You just described almost exactly what I want. The "almost" part lies in the fact that I would not want an iPod Touch, but a 4" - 5.5" Android device that was data-only. Currently, my cell phone is a job perk and I could not get rid of voice since that is the only reason it is supplied to me... I need to be accessible if there is a network problem on campus.

However, if there comes a time when I were in a different job where instant voice availability was not a job requirement and where the employer did not pay for it, I would want a data-only Android device to use in the ways you described and would rely on Google Voice. The Samsung Note would be an almost ideal device for this purpose, but even something in the 4"+ range would do.
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jefflee

I would think about it. I have a 3G iPad 1 & Android phone. There are things I like about Android that make me want to stick with it as my main device (Google Voice, Maps, Navigation, Docs, etc.). But I want some of the iPhone features and apps without the phone part of it. They'd definitely need to give the iPod a better camera though.
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TShreff

I definitely can't see that for just one reason: It would encourage people to use something other than an Apple product. If for no reason than just having it for an emergency, people will still always want a phone. A 3G iPod Touch that lacks phone support would need a companion of even a simple flip phone, and Apple wants people to live in just the Apple ecosystem.

Also, unless Apple builds its own network, it would still need AT&T and/or Verizon (and potentially Sprint) for the 3G service and none of those operators will support a prepaid product that will canabilize their post-paid subscribers.

And its not like it would save anyone any money. The plans would most likely be similar to the iPhone's current plans every month, and without a contract (and subsequent subsidies), the price of such device would be another $350-500, as opposed to the $200 iPhone.

I believe Apple will hit that lower end market like how they do with still selling the 3GS. If the rumors of an 8GB iPhone 4 are true, that could go for as low as $50 on contract, which would really dip into the low end Android market.
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ns7c

Responding from my touch...
As most have noted, it probably will never fly, but it would work for me. My home phone is VoIP and I run a SIP app on the iPod that uses the same line. For ubiquitous connectivity, I carry a Virgin Mobile MiFi, which has a cheap pay as you go plan. It works, but is a kludge at best. Having 3G on the iPod would certainly make it a little less kludgy! I do IM way more than voice, and agree that the current cell plans are probably out of line with most users.

All that said, I still have a cheap feature phone and a overpriced plan!

Oh, and I haven't been a teen for 35 years.....
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mikehenriquez

I think I would replace it, for business i have a landline (I'm a trader with few clients) so during my business hours I stay at my home office and anyone can contact me there, after work there is no call that I can't take care of later so I think it would be amazing not having a real celphone anymore! Would be retro-futuristic.
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sillymansamOCN

For someone who doesn't want an iphone and the price tag. Also not the bulkiness of an ipad but still wants to be connect. I would totally go for an ipod touch 3/4g. I wouldn't mind paying data only using the net and not the phone. Would also give someone like me the incentive to actually stream music more, depending on the bandwidth caps. The fact that it's the thinnest way to get connected to the internet would fill that niche in the market... just like the ipad did in comparison to netbooks.

I haven't owned an Apple product since the 1 gen nano. If this came true I would get one and fast!
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shul

Something like this can be a death blow to traditional telco business. Having worked with such companies in the past I can say they are nothing if not traditional. From their point of view, this will be another step into being no more than a pipeline, and they hate it. If you don't have a complex way to bill your customers (i.e. text, data and voice separately) and you become just a wireless ISP that's bad.
The outcome of that would be apple pushing for voip on 4G/3G while the telcos putting more and more hurdles, until some other company (metroPCS) will get an iphone/ipod deal and run with it...
I find it weird that apple is not going further with their ipods, I guess they are not part of the same deals as the iphone (which is rumored to come to sprint..) so why not sell an unlocked ipod 3G/4G and let the customers do what they like with it? I guess that apple has some logic behind it; they are probably making much more off iphones than on ipods, seeing that its more or less the same HW and the iphone is sold (through subsidies) for x3 times as much as the ipod.
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Mosi

I would seriously consider it. I love my iPhone but have recently purchased a unlocked Windows Phone 7 (Dell Venue Pro) and I honestly could see myself using that as my main phone but wouldn't want to give up my iPhone along with the hundreds of dollars I have invested in the ecosystem. This would let me have my cake and eat it too.
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stalky14

The iPod Touch's niche is in being a supplement to a phone. If you just have a featurephone, it gives you smartphone-like functions without a smartphone-like monthly bill, especially if you spend most of your time in a WiFi area. If you have a smartphone (that is not an iPhone), it gives you access to the iOS ecosystem. Even more so if your smartphone tethers. It also has the side-benefit of its own battery, so you can run it down playing games or video or otherwise goofing off and not have to worry about losing critical connectivity. I have both a Touch and an Android phone and they go together wonderfully for the above reasons as well as having access to the best of both worlds app-wise.

Instead of a 3G iPod Touch, what we need is a featurephone with tethering.
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doyleclark

If the price were right, I would purchase one and use it exclusively for business. I use Skype and GoogleVoice for business uses, so I would remove those responsibilities from my personal iPhone. If the data plan was reasonable, that would be great.
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srinivasmurty

I think as long as VOIP connectivity is not ubiquitous, I would have to stick with a cell phone like the iPhone. My phone usage is relatively higher, maybe because I am now in the 50+ (AARP!) demographic. Most people I connect with do not live on text message or IM clients. Yes, I could use Skype or Google Voice, but WiFi connectivity is not always available. So, I'd have to say that an iPod Touch with 3G or 4G would probably be a better bet for my kids, not for me.
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falleninsea

Not likely.

What does it offer me? Why carry around another phone sized device?

I see that it does not replace my iPad not does it replace my phone?

Now since I have the iPhone 4 I can’t see the iPod touch with 3 or 4G really swaying since I’m sure it will have lower specs than the phone will?

Now I can see it being useful if I didn’t already have the phone or maybe for kids and teens that don’t have the phone. I
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trivialmonroe

I would be fine using an iPod Touch with 3G or 4G connectivity. I, like you, don't use my smartphone for phone calls as much as I used to, however I do still need a solid phone. I feel like I enjoy having it all in one place but if I could get a great phone and then have a side gdgt for all my media and web, I would get along just fine.

I don't feel like the carriers would be very supportive of these types of devices because, like others have said before me, it would cut from their bottom line. Also, I wonder with all of these ultraportable computers (11" Macbook Air) and tablets on the market that have 3G/4G support, is there really a large market for such a device. I would probably rather have an iPhone and an iPad with connectivity or my 13" Macbook air tethered to my iPhone than actually have another separate device in my bag.

All that rambling aside, it all depends on what it is and when it comes out. If I feel like it will make my life easier or more fun, I could very well end up with one in my pocket. I am very much a lover of "more in less" in that I would rather have one device that did it all than have to carry around a plethora of gdgts to get the job done.

My 2!
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drummerdude1390

Just one "correction," you said that using an iPod 3G, one could use a third party app for texting... but even that isn't necessary anymore with iMessage in iOS 5
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jonv

I can't see this happening for many of the reasons mentioned above. If it did happen I would expect a wifi only cheaper version available like with the iPad.
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rbrome

Just from a technical point of view, it doesn't make much sense to me. What would be the difference between that and an iPhone? Just a speaker and mic? You'd still need all the same radios, chips, and a big battery. If the only difference is the speaker and mic, it wouldn't be much thinner, and not really any cheaper. So what's the point?
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dblaney

This is a tough question and a great observation. I would say no I wouldn't replace my iPhone with an iPod touch that had 3G or 4G. With that said I think it would make sense for apple to move this way.
For starters I hate losing my iPhone. The find my iPhone feature is remarkable and not just in the getting it stolen instance. I can count many times I've misplaced my iPod and had a hard time finding it. 3G iPods would fix this problem no matter where you have misplaced or lost it.
Another great instance although I'm sure many parents don't track their kid is the ability to find out where the child is. I'm not saying 24 hour monitoring but if a parent is at work he/she would be able to make sure the child has reached their destination successfully right from their iPhone. Depending on the cost of the data plan it could be cheaper than purchasing them a phone. Personally I think we give our children phones at too young of an age and I think this option is a great idea.
Lastly being connected anymore is almost a must no matter what device it is. We have come to an age where wifi doesn't always cut it. We had great dreams 10 or even 15 years ago about wifi being everywhere and there wouldn't be a need for cell service. This is not the case and cellular service is still a must for most smart devices.
In conclusion apple won't be getting a purchase from me, but that doesn't mean I don't like the idea. I think it is a great step for them and many will find it a great solution. I already have an iPhone and don't need it but for others that don't this will provide a less expensive alternative.
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aggiebradley

I can see how a 3G iPod touch would be valuable to some people, but no, I would not expect to purchase one. And I certainly would not replace my iPhone with one. The phone service is still a critical feature for me. Plus, I already have an iPad which is superior to an iPod touch for most non-phone features in my opinion.
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devron

With all due respect, there's absolutely no chance that this will happen for reasons that you already outlined. Makes no sense for Apple. Makes no sense for the carriers. Apple won't sell with 3G because it would blur the lines between their phone and this offering - which is aimed at a total different customer base.

And it makes no sense for the carriers for the reasons you outlined -- you can't get a data only deal on a phone if you tried. It's like trying to go to Time Warner Cable and get a bandwidth only deal.

The bigger question (to me) is whether other technologies like Android would seek to make this kind of deal. They are in a much more desperate place. OR whether De la Vega will make good on his claim to allow data deals (i.e. 2GB per month) to be used across whatever devices you want.
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Fangorn81

This seems more a question of "would you ditch your voice plan if someone finally made it possible" rather than one of iPhones or iPods. I've been trying to devise a way out of a voice contract for years. I too only use about 40 (billable) minutes a month. It's pretty ridiculous. Like having to subscribe to cable to get streaming HBO.
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Dragonfly47

You bet I'd buy one. I have no need for a phone, but having a pocketable 3G device for browsing and messaging would be sweet. Tired of lugging my iPad everywhere. If I could just add it on to my iPad usage plan, that would be perfect and might cause me to up my plan monthly minutes.
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UncleMuscles

I think it would be fairly easy to get the carriers onboard. All you need is one of the four to say yes and then the others will fall like dominoes. No one will want to be left out of a product that is sure to be a huge hit.
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kanucklehead

I would like to see a 3G ipod touch if it evolved into 5 or 7 inches. I think the ipod touch would be the perfect space to bump up screen size and add 3G.
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roberto

Following up on richardlawler's comment, would parents jump on board if the 3G/4G plan attached to the iPod Touch could not be bundled as part of a family data plan, as is the case with the current iPad 3G? The reason many parents give iPod Touch devices to their kids it's because it's like an iPhone without the monthly costs. The cost of a data plan per device, especially if it can't be part of a family plan, would make it even less attractive to parents.
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TypicalGirl

I just might since my plans are similar to yours. I'm a texting machine :)
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carlherbst

Yes. And even if they don't, I'm going to do the next best thing: iPad sim in an iphone 4. Currently I still have a 3g iphone, and have been planning to do exactly this for quite some time. Was going to wait to see the iphone 5, and figured the price of the iphone 4s on craigslist would drop a bit, but if they announce a new 3g/4g ipod touch, I will probably opt for that instead.
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