Point/Counterpoint: On the iPhone 5 replacing the iPod touch

Point/Counterpoint: On the iPhone 5 replacing the iPod touch -

A reader wrote in to us surmising that the iPod touch is on its way out, to be replaced by a lower-cost iPhone 5. It sounded ridiculous at first, but the evidence he gave sounds pretty compelling when it's all put together.

1. According to iSuppli, "The components that make up the 16 GB iPhone 4 cost just under $188." That of course should be taken with a grain of salt.
2. Production of the iPhone 5 allegedly begins in July, with a launch in September -- traditionally the time Apple unveils new iPod hardware.
3. iOS 5 will debut in the fall, and major iOS releases tend to come alongside new iPhone hardware.
4. Thus far, there is no mention of new iPod touch hardware in the iOS 5 betas.
5. The next-gen iPhone has reached final testing stage, destined for a September launch. With the exception of an A5 processor and possibly a universal GSM/CDMA design for its 3G hardware, it is expected to be substantially similar to the iPhone 4.
6. Unlocked iPhones are finally available in the US.
7. Recently unearthed evidence in the iOS 5 beta suggests the iPhone 5 will use the same 5 megapixel camera as the current iPhone 4 rather than the 8 megapixel camera suggested by rumors earlier this year, suggesting Apple is focused on cutting production costs.
8. This year, Apple's Back-to-School promotion will offer a $100 iTunes gift card instead of a free iPod touch as in previous years.

Taken together, this does seem to paint a pretty stark picture for the iPod touch's future. It also sparked off an intercontinental debate between fellow TUAW writer Richard Gaywood and myself on whether Apple is likely to lower costs on the iPhone 5 enough to make it a viable replacement for the current iPod touch lineup.

(Via The Unofficial Apple Weblog (TUAW).)