How a 3G iPod Touch could change the game

The iPod Touch has always played second fiddle to the iPhone. Most people can't even get the name right. More often than not I hear it referred to as the "iTouch." When asked to describe it, though, the explanation is invariably the same: "It's an iPhone without the phone."

The truth is that the iPod Touch lacks much more than just the iPhone's ability to dial phone numbers. It's missing a GPS receiver, a high-quality camera, a native text messaging app, and most of all, it's missing a cellular data connection. Still, considering that the device sells for as little as $200 with no contract and offers 90 percent of the iPhone's features, it seems inevitable that Apple would close the gap some day by integrating 3G.

We've seen products like the ZTE Peel attempt to address the iPod's lack of 3G, but the result is bulky and still burdens you with a two-year contract. The same goes for MiFi-style 3G/4G puck solutions. They're inelegant, require separate charging, and always come with a contract attached.

Will 2011 be the year Apple integrates 3G into the iPod Touch? The skeptic in me thinks that no carrier would agree to it and that Apple wouldn't cannibalize iPhone sales to make a 3G iPod Touch happen. But then again, the steps the company has made with the iPad's data plan, and the advancements it has shown for iOS 5, set the stage perfectly for just such a product.

With iOS 5, Apple is introducing two gigantic features for iPod Touch owners: iCloud and iMessage.

With iCloud, the iPod Touch is getting broad, cross-device synchronization of apps, music, photos, iBooks, contacts, e-mail, calendar, and documents. If you take a photo on your iPod Touch, it will automatically be made available to your iPhone, iPad, or computer. The same is true in reverse, and it's true for any of the content outlined above. It's a move that helps unify the entire iOS line, and under certain conditions, makes the iPhone and iPod Touch virtually interchangeable.

Apple's new native messaging app, iMessage, is another feature that bridges all of the iOS devices. Instead of sending text messages via SMS, now iPhone, iPod Touch, and iPad owners can communicate directly with each other using Apple's own messaging platform. Because iMessage is restricted to iOS devices, there's no chance that it will replace a time-tested and universal protocol like SMS. It does, however, make it easy for a family already entrenched in iOS devices to easily extend their network of mobile devices with a contract-free, $200 iPod Touch.

The death of the phone call
Being able to place a call isn't the killer app it once was. Of all the things we ask our smartphones to do for us, their performance as actual phones seems to be less important than ever.

It's a situation that isn't going to get better. Studies show that today's teens vastly prefer text messaging to placing calls. It's a stark change from the land line era stereotype of teenagers talking on the phone constantly while parents fumed over phone bills.

If anything, the phone bill outrage these days should stem from the fact that we're still paying a substantial percentage of our monthly fees for voice-calling features we're using at a rapidly decreasing rate. It seems inevitable that at some point, some people might make the jump to a device that omits standard voice calling in exchange for a decrease in their monthly bill.

For such a device to exist, it would take a manufacturer with enough clout and leverage to force carriers to stop the profitable practice of bundling voice with data. It would take a company with a proven track record in forcing carriers to adopt new practices that aren't necessarily in their best interest. It would take an Apple.

Apple's influence over carriers
Apple is not a company known to play well with others. It is unique within its industry as a company that creates and controls every aspect of its products: the design, the software, the manufacturing, and even the retail.

The fact that Apple is beholden to carriers for its most successful product must drive it crazy. Prior to the first iPhone's release, Steve Jobs was said to have referred to the nation's cellular carriers as "orifices." They controlled the data pipes and were a necessary path between the device maker and the customer.

In hindsight, it seems insane that Apple would have had a hard time finding a carrier to partner with for the iPhone, but at the time, Apple's demands were unprecedented. It wanted complete control over the hardware and software. It demanded exclusive control over music and video downloads via iTunes (and later, apps). It required AT&T to allow customers to purchase and activate phones at home or through Apple's own stores. In the end, the iPhone was the best decision AT&T ever made. But behind the piles of cash, Apple cut through practices that had stifled innovation and hurt consumers for years.

With the launch of the iPad, Apple rewrote the rules again. Its hottest 3G device since the iPhone required no contracts or commitments, no visit to the AT&T store, and a month-to-month data plan that could be upgraded or downgraded right from the device. The iPad's 3G data could be had for as little as $14.99 per month, and canceled at any time without penalty.

Who knows what Apple had to whisper into AT&T's ear in order to get these terms (though I suspect it was the word "exclusive"), but the result for consumers was an intoxicating brush with fairly priced, contract-free cellular service. No voice, no text, no hidden fees--just cheap, month-to-month data from Apple's favorite "orifice," AT&T.

With iOS 4, Apple gained a bit more ground by introducing free device-to-device video and voice calling with FaceTime. Later, Apple brought FaceTime calling to the iPad 2 and OS X. This fall, when Apple rolls out iMessage across its entire fleet of iOS devices, it'll wrest one more feature out of the exclusive control of carriers.

If Apple were to just include the same 3G and GPS capabilities of the iPad 2 in the iPod Touch and win over consumers with the first voice-free (though FaceTime compatible), contract-free smartphone, then perhaps carriers would finally admit to themselves that their inflated, bundled, archaic pricing schemes need to go. In its place, an era of always connected, pay-as-you-go tablets, e-readers, smartphones, and laptops can fill the vacuum. Also, pigs will fly, unicorns will roam the earth, and puppies will cure cancer. I can be optimistic, but none of this will likely happen.

Why it probably won't happen
As much as I dream of the day when every gadget in America can effortlessly sip off fairly priced, contract-free cellular data, the realist in me wonders if Apple will be the one to make it happen. At the end of the day, Apple, AT&T, and Verizon are all motivated by the same common, overriding interest: profit.

I honestly believe that an iPod Touch with the iPad's same 3G capabilities would make Apple's overall iOS product line a stronger competitor to the threat of Android. The danger, of course, is that Apple may inadvertently cannibalize some of its iPhone sales to the iPod Touch. The iPhone is simply too important for Apple to risk.

Then there are the carriers. Ultimately, the carriers control their networks and the terms for using them. Just because the iPod Touch isn't a proper phone doesn't mean carriers aren't threatened by it. As the role of the smartphone continues to shift away from voice and text to e-mail, instant messaging, and Facebook updates, the iPod Touch has the potential to be the blueprint for the post-phone pocket device that's always on us and always connected.

In the meantime, please stop calling it the iTouch.