Apple back-to-school deal promotes free iPod Touch

College campuses 'perfect place' to push pocket-browsing device, says analyst

Apple Inc. kicked off its annual back-to-school promotion today, offering rebates of up to $299 toward the purchase of an iPod Touch or iPod Nano when bought with a qualifying laptop or desktop Mac.

The promotion, which runs through Sept. 15, offers students, teachers and staff members rebates of $299 for an iPod Touch or $199 for an iPod Nano purchased at the same time as a MacBook, MacBook Air, MacBook Pro, 20-in. iMac, 24-in. iMac or Mac Pro. The Mac Mini doesn't qualify.

"This is a great win for Apple," said Ezra Gottheil, an analyst at Technology Business Research Inc. "This will drive MacBook sales and get more iPod Touches out there. I even think it will drive some iPhone sales."

Gottheil based his take on the integrated Web browsing capabilities of the iPod Touch, which features all of the functionality of the more expensive iPhone except for the ability to make and take calls.

"The Web browser in your pocket is the story of the last 12 months," said Gottheil, and not just for Apple, but for other device sellers too. "By pushing the iPod Touch, this will generate more utilization, spur more social networking kinds of applications and some real applications relative to schools. And college campuses, with their wireless networks, are the perfect place for the iPod Touch."

The device's built-in Safari browser can access the Internet through any Wi-Fi hot spot. Unlike the iPhone, however, it cannot use a mobile carrier's data network.

Apple sells the lowest-priced 8GB iPod Touch for $299, but buyers can select a 16GB ($399) or 32GB ($499) and apply the $299 rebate toward the cost. The 8GB iPod Nano sells for $199, the same amount as the promotional rebate. Student and educator discounts will also apply to any Mac purchase during the promotion. Those discounts range from $100 on the entry-level MacBook to $230 on a loaded MacBook Air.

The company's back-to-school promotion is an annual affair, and typically kicks off in early June. Last year's deal offered a $199 rebate toward the purchase of an iPod Nano.

Apple launched the iPod Touch last September. In February 2008, it added the 32GB model to the Touch lineup but did not reduce the price of the existing 8GB and 16GB units.

One possible stumbling block to the iPod Touch promotion is that Apple has already said it will charge a fee to users of that device when it upgrades the firmware to Version 2.0 as part of the rollout this month of third-party applications and synchronization with Microsoft's Exchange mail server. Earlier this year, Apple CEO Steve Jobs defended the charge as an accounting requirement. Because iPod Touch revenues are realized at the time of sale, not spread over the length of a service contract as are iPhone revenues, Apple must get something in return for additional functionalities.

Apple has not said what it will charge iPod Touch owners for Version 2.0, but in mid-January when it released a major update for both the iPhone and iPod Touch, the latter came with a $19.99 price tag.

Apple did not immediately respond to questions about how it would apply iPod Touch update prices during the back-to-school promotion.

Copyright © 2008 IDG Communications, Inc.

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