The Good: Built-in Wi-Fi for music downloads and Web access,
large screen, a wealth of applications
The Bad: Slightly underpowered external speakers
The Bottom Line: A poor man's iPhone, the Touch offers
wireless music downloads, mobile Web access, and hundreds of applications while
on the go
They say sequels often fail to live up to the original. That's not so with
the second generation of Apple's (AAPL)
iPod Touch. Apple has managed to make the Touch look better, work better, and
deliver more features—all for a $229 starting price, significantly cheaper than
the previous $299 entry-level version. The changes, while subtle, are so
significant that I give the second-generation Touch a rare perfect score.
The Touch, while an iPod, is close to the iPhone in lineage. It has the same
touchscreen, plays music and videos the same way, and includes a wireless
Internet connection that lets you access the Web from your home network and
wireless hotspots, such as those set up by AT&T (T)
in Starbucks (SBUX).
Apple tweaked the look of the Touch, too. It's a lot thinner than the
previous Touch, measuring 4.1 inches by 2.4 inches by 0.33 inches, and weighs a
scant 4.05 ounces. The back sports a contoured stainless-steel casing, whereas
the updated iPhone switches to glossy black or white plastic.
New Speakers
A year ago, when I reviewed
(BusinessWeek.com, 10/19/07) the original Touch, many readers took me to task
for complaining that there was no dedicated volume button for music and no
built-in speaker for listening to music without headphones. In the new
generation, Apple's engineers addressed both complaints by adding a rocker
volume button on the left side and speakers on the bottom. They also added
software to let you fetch e-mail and use other applications previously limited
to the iPhone.
Perhaps the biggest shocker is Apple's decision to sell $29 headphones with a
built-in microphone. The upshot? Users can download third-party applications
from iTunes that will turn a Web-connected Touch into a Skype (EBAY)
phone. In effect, the combination of features turns your Touch into a poor man's
iPhone, letting you make cheap calls anywhere around the world without signing
up for AT&T's expensive two-year service contract.
I've always felt the Touch ($229 to start) has stood in the shadow of the
iPhone. But Apple's decision to let developers deliver software to both the
Touch and the iPhone actually makes the Touch a more important product for Apple
in my mind.
Blackjack, Too
The devices' versatility is a key consideration. Not only is it a great
high-end iPod but it's also fast becoming a neat handheld game machine for
casual users. In the few weeks I've been using it, I've found myself launching a
quick game of blackjack or slots while standing in a line or waiting in an
airport.
And because of its great processing power, accelerometer, wireless access,
and surprisingly decent battery life, the Touch is limited only by the
imaginations of a growing stable of developers. One example: Wireless-music
company Sonos
in late October offered users a free application that turns the Touch into an
additional wireless controller for accessing music from a PC, Mac, or online
music-subscription service.
Another great new piece of software on the Touch is called Genius. With it,
you select a song and press an icon that looks like an atom on the top of the
screen. The software creates a playlist of tracks in your music library, based
in part on Gracenote's
digital music-database technology, that are similar.
Fatter Margins
The iPhone can do all this, too. Because the Touch does not include a 3G
radio, though, the company likely gets slightly better margins with each Touch
sold.
The Touch now sits in a class by itself. No longer simply a high-end iPod, it
has become the foundation of what's sure to be an increasingly important
handheld computing platform for Apple. Rivals should take note: This is one Apple product that
could seriously take a bite out of the competition.
