Is the iPod Touch the New XP?

Amid all the excitement about the new 3G iPhone (arguably the best thing since sliced bread and the creation of the 64-ounce Double Gulp Slurpee), the growing reality is the economic model between Apple and AT&T means consumers will surely pay for the privilege of having an iPhone.

It may take a while to sink it but wait until AT&T raises its iPhone data plan again. Then, you’ll hear howls of complaints from iPhone subscribers that AT&T is being unfair and gouging people. By that time, I’m afraid, it will be too late.

So before you get too excited about buying a new iPhone on July 11, perhaps it might be pragmatic to think before you leap. Rather than buying a new, shiny 3G iPhone, maybe you should consider buying a Touch or perhaps a well-maintained iPhone 1.0 that will likely flood the market as many people upgrade.

A Touch will cost you about $279 for an 8GB model, $369 for 16GB and $499 for 32GB. Of course, it doesn’t come with a phone but if you want all the bells and whistles of the iPhone without the data plan, it’s a pretty good option. If you bought an old iPhone, you could get an inexpensive voice plan but stay away from the data plan.

Who knows, maybe the Touch will become the XP to the 3G iPhone’s Vista. Maybe once people realize the true cost of buying a new iPhone and fend off Apple’s marvelous marketing machine, they will realize the Touch or an iPhone 1.0 is a smarter option.

More: Gizmodo weighs in with a post suggesting the new iPhone won’t be that much more expensive over two years ($160) than iPhone 1.0. The big flaw Gizmodo is missing is the economic model has changed with the carriers now having complete control over pricing, which means they can raise prices any time they like.

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  • shan

    you are forgetting the fact that change in price terminates the 2-year contract.

  • Stefan Hayden

    I could be wrong but I always thought most cell phone contracts had a clause about canceling your contract if the terms were changed? So if they upped the price you could get out of your contract.

    Not much to do with the iphone if you did but eventually more carriers are going to get the iphone and you could switch. or there will at least be more 3G competition.

    I forget how long the iphone ATT contract was for? wasn’t it 2 years?

  • Stephane Grenier

    Being a proud owner of the iTouch, I have to say the only thing I don’t like is that it doesn’t have a built in microphone and speaker (or camera).

    That being said, who says you can’t just buy an iPhone and use it as an iTouch…

  • Ashley Williams

    “A Touch will cost you about $279 for an 8GB model, $369 for 16MB and $499 for 32GB.”

    Wow big mistake Apple, trying to sell a 16 megabyte iPod Touch!! :P

  • Mark Evans

    @ Ashley: Thanks for the catch!

    @ Stephane: Good point – hadn’t thought of that. Only question is whether buying an iPod form AT&T requires you to at least activate it for awhile.

  • Corvida

    While this is certainly a good point and something I have considered I’d have to say that it wouldn’t work for me.

    I’m not constantly around a wi-fi connection, which is what you’d need to access that awesomesauce browser on the Touch. If I am around a wifi connection, I’m more likely to pull out my laptop than use the Touch. I never just “browse” the web or do basic emailing and if I wanted to do that I have my Motorola Q for it.

    So really, what would be the point in switching to the iPod Touch. I wanted the iPhone strictly for data browsing, but without the restriction of having to be around a wi-fi connection just to get it.

    On another note, the prices for the Touch are ridiculously high for a music player with a browser that I probably wouldn’t use very often. I’d rather pay the 250$ for the Zune 80 and get more storage.

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  • Mark Evans

    Corvida: One of the weaknesses in my buy a Touch campaign is the growing scarcity of open Wi-Fi connections, which make it challenging to get access to the browser. Still, I could see myself wandering around the house with the Touch as opposed to staring at my MacBook all the time. :)


  • Jon

    Is this guy serious?

    He’s obviously not an AT&T subscriber. Once you’ve entered into a contract they won’t raise the price. You pay for the entire period whatever you paid at the beginning of your contract.

    Plus, ALL OTHER 3G phones on ATT have $30 data plans.

    no surprise there.

  • Jon

    Oh, and $50 says the iPod touch price will drop at least 30-50 when the iPhone 3G is released.

  • Scott

    As a UK iTouch owner (and I love it) I would have to agree that the problem with it is just that whilst there are a lot of wifi connections, there are not enough free/open ones, and too many diff pay options to make sure you have decent coverage. This is why I’ll probably get a iPhone now that has decent data connection through 3G. Funny enough though, the phone aspect/functionality is of least interest to me as i’m not a big maker of calls.

  • Simplicity

    Two flaws, a contract is a contract as other people have said, they won’t raise the price over the contract.

    Secondly, both Gizmodo and Mark forget that from a consumer perspective, money that is closer to you is worth more. So, by not spending more on the iPhone upfront, I could in theory save that money, making a return which would lower the overall cost of the plan. It’s not quite that simple but think of it in terms of having a 1% interest loan over 2 years against the price of the phone and getting 2% over the amount you are saving.

  • Alec Saunders

    Not only is a contract a contract, but in order to provide that service the carrier posted a tariff. My understanding is that they have to honor this, even after the contract period is up. They can’t raise the price on an existing subscriber because it’s still governed by the original tariff. That’s why AT&T is offering to tear up the contract that existing iPhone users have in order to get them to move to iPhone 3G. They pay a bunch in subsidies, but it gets the customer to move to a new, higher, tariff.

  • cj

    no matter what anyone thinks the ipod touch WILL drop $10 (for the upgrade) like it did for the last upgrade. they know everyone will get the upgrade so they are making the ipod touch look cheaper when you are actually paying the same. its already a good deal.

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