Conventional wisdom has been that Apple (AAPL) is preparing to quietly exit out of the iPod business. However, the company likely caught a host of analysts off guard by releasing a new iPod Touch.
Even more surprising, the sixth-generation iPod Touch isn’t just the same old thing brandishing a new coat of paint (a tactic Apple has often used in the past to spur interest in its iPods).
Instead, the new iPod Touch sports the same powerful 64-bit A8 processor found in the iPhone 6, gets the same camera resolution as Apple’s flagship smartphones, doubles the RAM of the previous model and offers much heftier storage options.
Oh, and it also gets some new colors.
Sixth-Gen iPod Touch Specs
- 4-inch Retina Display
- 64-bit A8 CPU with M8 motion co-processor
- 1GB RAM
- 16GB storage to maximum 128GB storage
- 8MP iSight Camera
- 802.11ac Wi-Fi
- Lithium ion battery rated at 8 hours video playback
- Runs iOS 8
- Available in Space Gray, Gold, Silver, Pink, Blue and (Product) Red
What’s the Point?
So why re-invigorate a product line whose sales dropped by half last year alone, that was purged from Apple’s main website, that accounts for somewhere in the neighborhood of 1% of AAPL’s annual earnings and is irrelevant to the point that Apple quit separating out its sales numbers altogether earlier this year?
And why boost the storage maximum from 64GB to 128GB, especially when the company is pushing for everyone to stream their music instead of downloading it using Apple Music?
It’s all about games, social media and getting kids hooked early on the Apple experience.
Mobile gaming has taken off, and despite the challenges of the “freemium” model that has come to dominate mobile app stores, game developers are making money. Electronic Arts (EA) reported revenue for mobile games hit a record $524 million in 2014, much of that through the Apple App Store. AAPL announced it paid out $10 billion in revenue to App Store developers in 2014 and although that’s not all games, gaming accounts for a good chunk of it.
While the new iPhones and iPads are excellent gaming machines, the iPod Touch had fallen seriously behind the times, with a three year-old CPU (from the iPhone 4S). The iPod Touch was barely able to run iOS 8 and cutting-edge games didn’t always run well on the aging hardware.
An important Apple demographic was being left behind.
Parents might be reluctant to spend the money to buy their 8-year-old an iPhone 6 and even the $399 for an iPad Mini is a steep entry level. The iPod Touch — which starts at $199 and offers pocket portability an iPad doesn’t — lets these younger Apple fans play games, as well as participate in all other aspects of the Apple ecosphere, from music to movies. It replaces a pocket camera/video recorder, too.
Get ‘em hooked early, and they’re likely to stay Apple fans, eventually upgrading to iPhones, iPads and Macs.
Giving young gamers high-end hardware also keeps game developers happy — there’s nothing worse than spending the time and money to develop a blockbuster mobile title only to discover many potential buyers are skipping it because their iPod Touch can’t deliver a smooth playing experience.
The components of the iPod Touch Apple upgraded speak volumes to why they invested in this seemingly unimportant piece of hardware. The CPU and RAM upgrades mean this little machine now has the power to play the most demanding App Store titles. The improved camera specs are perfect for social media — where kids are increasingly active. The availability of boosted storage means kids can carry more games than ever and store more of those self-shot video clips they’ll end up posting on YouTube.
Even the inclusion of the M8 motion co-processor can help get that younger demographic participating in Apple Health.
Together, the upgrades also mean an inexpensive, entry-level Apple device will be capable of running new versions of iOS for at least a few more years to come, letting AAPL delay the decision whether to discontinue the line-up altogether.
What’s noticeable are the upgrades Apple didn’t make. The new iPod Touch display is Retina resolution, but remains at 4 inches. And it didn’t get Touch ID. Connectivity remains Wi-Fi only, no cellular option. Clearly, Apple is still taking no chances of having the iPod Touch replace an iPhone for its users — no big screen, no Apple Pay and no using FaceTime calling to replace voice calling on an iPhone (at least when not connected to Wi-Fi).
The new iPod Touch is available now starting at $199, going to $399 for the 128GB version. If you’re interested in Apple’s other iPods — the Nano and Shuffle — they got the color upgrade treatment, but no hardware changes.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
