Punch line: While Apple’s iPhone grabs headlines, the cheaper iPod touch keeps gaining devoted fans … thanks to strong functionality and, well, no dependency on AT&T.
Trend to watch: As my students know, I’m very critical of cell phone service — dead spots, crackling reception, dropped calls, slow upload / download speeds. Wonder if iPod Touch (and Apple’s tablet to follow) will give a super-boost to WiFi coverage and obsolete cell phone technology. Hmmm.
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Business Week: iPod Touch’s Holiday Sales Spike Likely Beat the iPhone’s, December 30, 2009
Ever since Apple introduced the iPhone in the summer of 2007, it has been hailed as one of the most revolutionary products in tech history. By comparison, the iPod touch, which has all the iPhone’s features without the cell phone, has been downright publicity-starved.
But this holiday season, it seems the thinner, cheaper iPod touch may be Apple’s breakout hit … iPod touch sales soared more than 100%, to 7.2 million, in the final quarter of 2009, while iPhone sales rose 53%, to 11.3 million.
Post-Christmas, the number of apps downloaded onto … iPod touches surpassed the iPhone. “It wasn’t just that the iPod touch barely squeaked by … It blew the doors off the iPhone—and overnight.”
The iPod touch can do pretty much anything an iPhone can do, and for a lot less money. It features the same slick multi-touch interface and can run almost all the 100,000-plus programs in Apple’s App store. The device has taken the portable gaming market by storm
The main difference is that the iPod touch does not work over cellular networks, so owners must be within striking distance of a Wi-Fi hotspot to go online or download apps. But Wi-Fi is available in most homes, offices, airports, and coffee joints, either for free or for a few bucks—but it costs nowhere near the monthly $100 of an AT&T contract.
This year, iPod touch sales may be getting an extra boost from the travails of AT&T, the exclusive carrier of the iPhone in the U.S.
Because of Ma Bell’s network problems, including frequent dropped calls and spotty Net access in cities such as New York and San Francisco, many consumers are opting to carry a new iPod touch along with their old cell phone rather than rely on an iPhone. Many users carry a BlackBerry for email and making calls, and an iPod touch for running apps and going online.
Some folks may soon be tempted by Apple’s much-rumored tablet device. Sources expect the tablet device to be roughly three times the size of an iPhone, making it well-suited for playing games, running apps, and reading e-books or online newspapers. The device may also rely on Wi-Fi, allowing Apple to further distance itself from AT&T’s service woes.
Full article:
http://www.businessweek.com/magazine/content/10_02/b4162022078079.htm
The Homa Files 
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