The newly released iPod touch is for all intents and purposes an iPhone with reduced functionality. The iPod Touch skips Bluetooth, phone capabilities, a camera and has a lower quoted battery life.
It has more storage than the iPhone though, which tops out at 8 Gbytes. The Touch is available in 8 Gbyte and 16 GByte versions, whereas the iPhone is only available in 8GB capacities. Other than that, the iPhone and Touch are identical. 802.11b/g Wi-Fi is available on both devices.
The Touch uses the same interface as the iPhone as well, but the Touch is shorter and thinner. Brilliant people, those marketers at Apple. They are creating a family of products each optimized for a different use case. The iPhone is the most capable phone. The Nano is a cheaper video player. The iPod has the most memory if you a music player.
The iPod also has dedicated volume control buttons; Touch doesn't.
The Web browser on the Touch probably is a major positioning feature. Lots of users will focus on using Wi-Fi to download music. Personally, I see it more as a Web browsing platform. Email access is not something you'd really want to do on a Touch. That's a better experience on an iPhone but arguably not as good as an iPhone as on a BlackBerry.
To prevent people from confusing a Touch with an iPhone, Touch has no audio input jacks or Bluetooth, so you really can't use a microphone. It definitely is not a phone.
So the issue is what people will make of it. It's a better Web browser and video player than a music player. The iPod is a better music player. The video-capable Nano is a cheaper music and video player. The iPhone is the only phone. The Shuffle is a better device for running and exercising because of its non-existent footprint. Unless you need to keep stats on your training progress, in which case the Nano works with some Nike shoes to collect data for you.
The net result is that lots of users will wind up owning multiple Apple products, while Apple covers the whole range of price points for devices that all are mobile music players. Clever, those marketers at Apple.
All of this is interesting for other reasons as well. One wonders how long it will be until data-optimized, communicating mobile devices might develop as a distinct niche: optimized for Web applications primarily, though capable of handling email and voice. Would such a niche necessarily require full-time mobile access? Or is there room for use cases based on Wi-Fi connection as a primary access method? Perhaps dual mode capable, but without the recurring monthly post-paid fees? Perhaps prepaid mobile access as a supplement to Wi-Fi as the primary access? Using WiMAX perhaps?
The new use case would be based partly on the characteristics of the device, partly on the nature of the access, partly on the user payment model and partly on the provider business model.
