Originally Posted by mark2005
Although Wu can't see it, that's exactly what Apple would want you to do if you're comparing the two: buy iPhone, not iPod touch. iPhone fetches Apple a total of about $400from the carrier, while iPod touch fetches $229 directly from you. Which would you want to sell of these two if you were Apple?
On the other hand, Apple wants you to buy an iPod touch instead of the iPod classic, since touch is the future and is a catalyst to bring in additional revenue (wi-fi Store, App Store). So voila: iPod classic $249, iPod touch $229. (Now if you want capacity, Apple would be glad that you bought the classic instead of nothing at all.)
If both $199+$service contract, and $229 are too rich for you, then Apple wants you to buy the nano at $149 today. And maybe next year, you can buy touch.
Apple is the master of the upsell.
Precisely! Which suggests that analyst Wu, no doubt being paid a pretty penny for his insights, is missing the point entirely when he says (assuming he was not misquoted) that his concern, however, is that the new touch models are not priced aggressively enough for today's consumers, who may see more value in a $199 subsidized iPhone.
What concern? Apple is laughing all the way to the bank either way, as they should be.