Will New iPhone 3G S Create Cheaper iPod?

With the coming release of the latest incarnation of Apple's popular iPhone series (the iPhone 3G S), many money-conscious consumers are watching the prices closely.

Technology is an ever-changing industry that sees plenty of hand-me-downs quickly drop in price after just a year or two.  At a time when the world economy has slowed, watching the prices on consumer electronics just makes sense.

Price-watchers watched closely as Apple dropped the price of the now-old iPhone, the 3G, to just $99 - a far cry from the $500 price tag iPhones were originally fetching a few years back.

With the price ripple effect clearly taking hold, will we see the less-pricey Apple gadgets like the iPod Touch decrease in price too?



First, let's get out dollars straight.

The new iPhone 3G S, Apple's latest and greatest, is  available at three prices * - $229 (8 GB), $299 (16 GB), and $399 (32 GB).  Prices can be reduced after mail-in rebates, but that's your baseline.  You are mailing in your rebates, right?

These declining iPhone prices haven't necessarily coincided with drops in iPods, particularly the Touch.  The iPhone 3G, after dropping down to just $99, stills includes a hefty price tag in the form of monthly Telco bills.  The iPod Touch, needless to say, doesn't carry that extra fee with it.


One variable to watch might simply be competition.

Microsoft is hot on Apple's heels with the Zune, and while they haven't been able to touch Apple's market share, one way they can entice customers to switch brands is through lower prices.  If your iPod Touch costs $200 and my Zune costs $79, who made the better purchasing decision?

The iPhone 3G 'S' is now much less as an upfront-investment than the iPod Touch, and common sense tells us that this won't be the case for long.

As of right now, it's difficult to predict Apple's next move.  But if you're thinking about purchasing an iPod without quite enough cash to justify it, you might want to wait a little while.  Prices in this market generally have nowhere to go but down.

* Price are in US Dollars Correct At Time Of Publication.