Apple Preparing iPod Touch With Camera, Microphone: Source
Rumors have swirled about Apple readying a new version of the iPod Touch with a camera and microphone, which, combined with a Skype account, would pretty much obviate the need for a home phone line once and for all.
Context & Ripple Effects
The camera-and-microphone Touch rumor extends an arc that began when the touch-screen iPod took center stage in September 2007 and continued once hobbyists proved the iPod Touch could carry VoIP calls by the end of that year. What was then a hack now looks like a product decision: adding a mic and camera would make Skype-on-Touch official rather than tolerated, which is why Epicenter's source frames it as ending the home phone line.
The timing matters against Apple's confirmed financial position: Deutsche Bank research put Apple at roughly 20% of the cellphone industry's total operating profit in mid-2009 — about 35% counting Research in Motion alongside it. A company earning that share of phone-industry profit can afford to sell a no-contract device that undercuts voice plans, and Nielsen's Q2 2009 survey already showed 29.4% of iPhone 3G buyers defecting from Motorola handsets, many RAZRs.
First-order effects
- Skype gains a mainstream consumer-hardware channel: a rumored camera-and-mic iPod Touch would make Wi-Fi calling a built-in capability rather than a workaround for early adopters.
- Carriers' landline and prepaid voice businesses are the immediate losers if the source's framing holds — households with an iPod Touch and Wi-Fi have little left to pay a phone company for.
Second-order effects
- Motorola and other handset incumbents, already bleeding upgrade customers to the iPhone per Nielsen's Q2 2009 data, face a second defection route that bypasses carrier contracts entirely — no subsidy, no two-year commitment.
- Apple forces the question onto itself: a $200-class Touch that makes calls competes with iPhone voice revenue, so the move only makes sense because Deutsche Bank's numbers show phone profits concentrated heavily enough on Apple's side to absorb the cannibalization.
Third-order effects
- If the pattern holds, computing and connectivity keep decoupling: Apple sells communication-capable devices through retail and iTunes while voice service becomes an app choice — Skype's, or whoever wins it — rather than a contract the hardware ships locked to.
- Regulators and carriers would then face a structural shift in how universal-service and interconnection fees are collected, as traffic migrates off metered lines onto flat-rate broadband endpoints like this one.
The trend: Apple is pushing handheld devices toward carrier-independent communication hardware, with Wi-Fi VoIP positioning apps like Skype as substitutes for contracted phone service.