Apple Fattens Up iPhone, iPod Touch

The iPhone now comes in two models, the existing 8 GB model for US$399 and the new 16 GB model. The upgrade doesn't come without a cost, though -- Apple nudged the price for the 16 GB iPhone up to $499.

The iPod touch now comes in a 32 GB model for $499, with 16 GB and 8 GB options for $399 and $299, respectively.

"For some users, there's never enough memory," noted Greg Joswiak, Apple's vice president of Worldwide iPod and iPhone Product Marketing.

More, More, More

While the existing 8 GB model offers enough memory to store a handful of movies or a moderate collection of songs, it is possible to max out the 8 GB iPhone with content. Now that Apple has the iTunes Movie Rentals store, rented videos can more easily fill either device, particularly if an owner is getting ready for a vacation or long flight.

Still, are these upgrades really that important to customers or Apple? Are they likely to increase sales of the iPhone or iPod touch or stave off competition?

"Both are important but not a big deal. I suspect there is a portion of the population for whom the memory constraint of the iPhone prevented their purchase -- say, an 8 GB nano owner -- but now can see the 16 GB iPhone as an acceptable iPod upgrade in addition to giving them a single device," Charles Golvin, a principal analyst for Forrester, told MacNewsWorld.

"I think the upgrade to the iPod touch is more important, since for many people a 32 GB player will seem more future-proof, given the size of their current music collection," he added.

A Future of Smaller Upgrades?

"This is one small step in what will be a steady march by Apple to diversify the features and configurations of its iPhone products. This is an important part of extending the lifecycle of the design while continuing to meet the evolving needs of potential users," Chris Ambrosio, executive director of Strategy Analytics' global wireless practice, told MacNewsWorld. "As the product ages, each of these incremental improvements create a significantly lower level of device upgrades or purchases."

Apple most recently updated the software features built into the iPhone by adding a GPS-like mapping application, so-called Web Clips of favorite Web sites for easy access, and the ability to customize the placement of applications and Web clips on the home screen.

Basically, as Apple slowly evolves the iPhone and iPod touch, it will become increasingly difficult for Apple to deliver a revolutionary upgrade that will deliver anything close to the original iPhone splash.

The Next Big Boost

"16 GB is an industry-leading memory upgrade and should be applauded; however, I would not expect a significant boost in sales from this alone," Sean Ryan, a research analyst for IDC's Mobile and Wireless Group, told MacNewsWorld.

"Boosts in sales of iPhones will be from things like a jump from EDGE (Enhanced Data Rates for GSM Evolution) to 3G wireless connectivity or through the addition of new carriers. New applications from third party developers could also have an impact, but that depends entirely on the relevance and quality of the applications," he explained.

New Apps on the Horizon

Apple plans to release a software developers kit in the near future, which will let third-party developers and enterprises create applications that will run on the iPhone -- applications richer and more functional than the current crop of Web-based apps. Is the upgrade to 16 GB important for new applications?

"The increase in storage memory -- which is what this is [as opposed to RAM memory in PCs] -- is essentially immaterial to developing applications," Tony Rizzo, a mobile software director and analyst for The 451 Group, told MacNewsWorld.

"It just means it can hold more stuff -- like more songs and videos ... and more apps," he added.