Thoughts on New iPods, etc September 1
The new iPod lineup looks great. If you like tiny, focused devices you get your choice of iPod-shuffle-like devices: inexpensive with no screen but tactile controls, or no tactile controls, a touchscreen, and a few more features for a few (okay, three times as many) more bucks. Otherwise, the convergence devices are where it’s at — the iPod touch is now the most popular iPod, and that’s even if you don’t count the iPhone as one.
The touch surpassing the old nano in popularity paves the way for the nano to become something else than what it had been (and in some ways something less). The new nano is more “iPod shuffle plus” than “iPod nano (what we knew it as) smaller and with touch” — it’s lacking features that have been integral to the nano for years. Maybe they’d have done better to change the branding: make it a new iPod model and retire the nano name. They missed a great opportunity to call it “iPod pico”! 
The touch has always been called “iPhone without the phone”, but really it was missing more of what the iPhone had than just telephony… now it’s really “iPhone 4 without the phone”. (Actually, the iPhone camera has more pixels, but that’s not a huge deal… the iPod touch having a camera at all is a big step.) I wouldn’t have been surprised to see them drop the “touch” sub-brand this year and just call the flagship iPod just “iPod” (though it does makes sense that they didn’t; the touch has its own brand equity by now).
While Apple didn’t do a lot to promote it (summary: “just another feature from iPhone 4 we’re bringing over”), I suspect FaceTime on iPod touch will be a big deal — as Steve pointed out, the touch isn’t just “iPhone without the phone”, it’s “iPhone without the [wireless carrier] contract”. With FaceTime already becoming a hit on the iPhone (video calling easy enough for Grandma!), we could see it eventually become a replacement for basic telephony, cutting wireless carriers and their nasty contracts out of the loop. (Or at least relegating them to be data-only providers — I’m sure Clear and Sprint will be happy to sell 4G-WiFi bridges to iPod users who want just FaceTime and no phone. Maybe Verizon too.)
Netflix on Apple TV is a big move, and a sneaky one, too; Apple’s acknowledging that the iTunes (for TV and movies, at least) business model isn’t for everybody, without undertaking the risk of having to support an alternative themselves. Some people want to “just watch” a movie or some TV episodes without the costs — both financial and those of time/clutter management — of ownership. Rentals is one way to deal with that (but with some issues of its own), and Netflix-style subscriptions are another. (Alternate theory: Apple would like to offer more ways to buy/rent/subscribe to content via iTunes, but they’re tired of negotiating with greedy studios over it.) What’s great for Apple about doing the subscription model via Netflix is that it lets someone else handle both the datacenter/bandwidth issues and the studio negotiations.