Apple introduces the iPhone without the iPhone: The company announced the iPod Touch this morning, including the iTunes Wi-Fi Music Store. The new iPod includes Wi-Fi but not EDGE (it's not a cell phone, after all), and lists for $299 for an 8 GB model and $399 for a 16 GB model. There's a Safari browser and some widgets, but no email client. Apple rates the player at 22 hours of audio and 5 hours of video playback per charge. The device will be launched worldwide, shipping in September, CEO Steve Jobs said.
Apple also introduced the iTunes Wi-Fi Music Store, which will be rolled out later this month to iPhones and iPod touch models. The store will sell music only over Wi-Fi, as you might have guessed. This prevents iPhone users from overloading the EDGE network. The limit of music and not video likewise prevents iPhone users from drowning hotspots with multi-gigabyte TV and movie purchases. The iTunes Wi-Fi Music Store allows music previews and purchase. Songs purchased on the iPod Touch are synchronized back to your computer the next time you dock the iPod touch or iPhone. (Apple dropped the iPhone price to $399 for an 8 GB model, a $200 reduction. They eliminated the 4 GB model.)
In a neat bit of co-marketing, if you carry an iPod Touch, iPhone, or a computer with iTunes installed into a Starbucks with T-Mobile HotSpot service, the music player will join a music-purchase-only network that allows you to buy the song you're listening to with a single click. The Starbucks option starts in Seattle and New York in 600 stores Oct. 2, and rolls out from November to March in San Francisco, Los Angeles, and Chicago, before spreading to other metro areas and all 5,800 Wi-Fi-equipped Starbucks by 2009. The Starbucks button also lets you see the last 10 songs played, and purchase other music from the Wi-Fi store.
It's a good win for Starbucks, because people with iPods and iPhones don't take up as much real estate as a laptop toter. They also probably don't stay as long, and they're almost certainly more likely to have more hands free to buy drinks and food. I expect that Starbucks will see a real uptick in sales at their initial stores when this features launches. For Apple, the company gets to add out-of-the-home distribution points with no real cost entailed. They'll give a piece of the sale to Starbucks (who will ostensibly give some money to T-Mobile, too). iPod and iPhone owners without home broadband or with slow broadband now have a reason to go to Starbucks.
My prediction has long been that Starbucks and T-Mobile will put in media servers in the stores themselves. Starbucks has tried this before with on-demand disc cutting, and such, but I'm talking about an edge media server that lives in the store and has the few terabytes of most popular music and video. An iPhone or iPod user would make the purchase in the store and receive files at 802.11g speeds (roughly 20 to 25 Mbps), making a 1 GB movie transfer in less than 10 minutes or an album in less than 30 seconds.