The touch currently comes in three configurations: 8GB ($229); 16GB ($299); and 32GB ($399). Sure, it does all sorts of fun stuff, including music, games, videos, and slideshows. But so does the iPhone 3G (8GB), which adds a 2-megapixel digital camera and costs only $99.
At its affordable price point, the iPhone 3G is suddenly a very appealing alternative to the iPod touch and other portable media players. To get the $99 deal, of course, iPhone 3G buyers must sign a two-year deal with AT&T Wireless, which costs around $75 a month plus taxes. So, yeah, there's a catch. A big one.
Still, the price gap between the iPhone 3G and iPod Touch is out of whack. When the 3G model was $199, the 8GB touch seemed reasonable at $229. Now it's a luxury item that may not resonate with shoppers seeking the best value.
If you don't believe me, consider Microsoft's "Laptop Hunters" ads that focus on value perceptions of Macs vs. Windows PCs. They appear to be working in Microsoft's favor, according to some reports.
So what sounds reasonable? That's for Apple to decide, although $149 for the 8GB touch sounds appealing.
Another good reason for a lower-cost touch: Microsoft's Zune HD, a portable media player that promises high-def video output, a sharp OLED display, and music streaming via Wi-Fi, is coming soon. Zune HD is designed to one-up the iPod touch, which no doubt will get a makeover in the very near future.
An iPod price cut now might help steal away some of Zune's summer buzz.