Should Apple Rebrand the iPod Touch as a New iPad?

Photograph by David Paul Morris/Bloomberg

Rather than remain the big fish in a shrinking pond, the iPod Touch could become a star overnight as an iPad.

iPhone 5, iPad mini. iPhone 5, iPad mini. They’re all you hear about. It’s almost as if the reliable old iPod Touch no longer existed.

Maybe it shouldn’t — at least in name. A couple of Apple analysts said the company could retire the iPod Touch name and reposition the device as the smallest of three versions of the iPad. Besides the full-size model, Apple is expected to introduce an iPad with a 7.85-inch screen by the end of October.

Why do it? For starters, the iPod Touch fits naturally into the role. With its touchscreen and ability to run software downloaded from Apple’s App Store, it has more in common with the iPad than it does with the iPod.

“The iPod Touch really isn’t any different than an iPad,” except for the lack of a cellular radio, said Roger Entner, founder of telecommunications consultancy Recon Analytics LLC. “It would give Apple a lot more flexibility by calling it an iPad.”

Apple could further streamline and strengthen its already powerful marketing. The iPod Touch is still a huge seller, with 46.6 million units sold in the U.S. since 2007, according to documents released during the Apple-Samsung trial. Still, it’s not a primary growth driver for the company. In 2007, before the iPhone took off, iPod sales made up 34 percent of Apple’s sales. In fiscal 2011, iPods accounted for less than 7 percent.

If Apple made the iPod Touch an iPad, it could treat the iPod category as what it is: a slowing market on auto-pilot. After all these years, there’s still no real competition in dedicated portable music players, and therefore no pressing need for Apple to continue to invest much in this brand. Rather than remain the big fish in a shrinking pond, the iPod Touch would benefit from — and contribute to – Apple’s massive iPad marketing campaign.

It would fill out Apple’s iPad lineup, giving consumers more reason to think about jumping aboard Apple’s platform rather than Amazon’s cheaper family of mobile devices.

Sterne Agee & Leach analyst Shaw Wu doesn’t think Apple needs to reposition the iPod Touch, but agrees that morphing it into an iPad would bring some advantages. “They could go either way,” he said.

The most obvious challenge would be the pricing, which needs to fit logically into Apple’s product lineup. The iPod Touch sells for $199 to $399, while the full-sized iPad sells for $499 to $829. That doesn’t leave much room for the rumored mini iPad, so Apple might need to charge less for the iPod-turned-iPad.

To keep the price down and maintain the iPod Touch’s appeal to parents who want to give their kids a device for texting without a pricey cellular service, Apple could continue to sell Wi-Fi-only versions for less than $250. A 4G version could be priced at $380.

Or maybe the prices on all the iPads, including the full-sized versions, need to come down given Amazon’s new Kindle Fire HD tablets, which start at $199 for a version with a 7-inch screen.

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