Safari browser makes new iPod touch intriguing, analysts say

'It's the Web in your pocket,' says analyst Ezra Gottheil

Apple Inc. has made headlines in the past for introducing disruptive technologies, but yesterday's announcement of the iPod touch could be a real sleeper.

The new device, shipping later this month -- retail price, $299 for the 8GB model, $399 for the 16GB version -- might seem like nothing more than a newer iPod with a slick touch screen akin to the iPhone.

But it is more, according to analysts who point to the iPod touch's Safari Web browser capabilities over Wi-Fi networks. Unlike the iPhone, the iPod touch does not have cell phone capabilities. But the Web browsing capabilities could interest business users who want to surf the Web without having to carry around a heavy laptop.

"It's the Web in your pocket," said Ezra Gottheil, an analyst at Technology Business Research Inc. "For $300, you get a mobile Web browser with touch-screen input."

In fact, Gottheil said that the iPod touch's selling potential is actually increased precisely because it is decoupled from a two-year phone contract with AT&T Inc., something required with the iPhone. The ability to browse as well as download iTunes songs and content over Wi-Fi will make the product a success, he said. And business users could even send e-mail with Web-based e-mail accounts over it, he said.

Ken Dulaney, an analyst at Gartner Inc., said in an e-mail interview that having both an iPod touch plus a cell phone would be a "great set for many of us to use." But he discounted the iPod as a business tool that IT shops would support. "If a company could lock down its functionality and show things like movies of products, then fine," he said. "But remember, you cannot project from this device, and many salespeople are going to have a laptop anyway."

There is also the potential that the iPod touch could become a voice-capable wireless device through a Skype-type service, Gottheil added.

As announced, the iPod touch has no microphone, but audio input might be possible with Bluetooth, which has been rumored to be supported, Gottheil said. (While some users on Apple forums noticed the Bluetooth logo on some iPod touch prerelease materials, Bluetooth support is not mentioned in the specifications released yesterday by Apple. An Apple official, however, said today that Bluetooth capabilities do not come with the new iPod touch.)

John Byrne, another TBR analyst, said he has asked AT&T and Apple about future voice capability for the iPod touch, but he hasn't received any answers. Apple's deal with AT&T in the U.S. appears to give AT&T exclusive rights to provide voice in any form, even if it is Wi-Fi/VoIP, he said. Apple has no operator deals yet outside the U.S., which could lead to a voice over Wi-Fi type of deal elsewhere, he added.

"A usable portable Web browser will appeal to both personal and business users, and Web sites and applications oriented to the mobile browser will proliferate," Gottheil and Byrne wrote in a TBR statement on the iPod touch yesterday.

The iPod touch represents a new product category -- the "mobile content platform"-- that will "introduce customers to a whole new user experience in which the phone functionality is far less important [than] the unique user experience and Wi-Fi-based mobile Web access," they said.

The fact that Apple will offer direct music downloads from iTunes to the iPod touch over Wi-Fi, and for free in some Starbucks stores, is essentially "an end-run around wireless operators," including AT&T, Sprint Nextel Corp. and Verizon Wireless. All now offer downloadable music services for a fee, the TBR analysts said.

Ina Sebastian, an analyst at JupiterResearch LLC, called a Wi-Fi-enabled iPod "great news for public Wi-Fi." Apple yesterday also announced its iTunes Wi-Fi Music Store, which allows an iPod touch or iPhone to browse and download songs for 99 cents apiece using a Wi-Fi connection. Once the iPod touch or iPhone is reconnected to a PC or Mac, the downloaded music on the handheld is then synchronized back to the user's iTunes library.

Gottheil said a new iPod touch could well complement a cell phone user who is already locked into a long voice contract with a service provider. One user in Scotland using the name Gareth26 in an Apple forum today seemed to fit that bill, saying he might buy an iPod touch and a cheap mobile phone, adding that the iPod touch "has taken the shine off the iPhone for me."

Computerworld's Ken Mingis contributed to this report.

Copyright © 2007 IDG Communications, Inc.

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