Here's my count of how well they fixed the "places for improvement" Steve mentioned in the keynote:

1. (3G) Done, though the other use of 3G they don't have covered is multimedia. (Their ad copy for the iTunes store still instructs you to "find a WiFi hotspot".)

2. (Enterprise) Done.

3. (Third Party Apps) More or less done, although there are a few capabilities missing: scheduled reminders; playing sound in the background (for music player-type apps).

4. (More countries) They're doing it at an entirely reasonable pace.

5. (More affordable) Cutting the down payment by $200 does not "more affordable" make. With $10 more a month for a 3G plan, you end up forking over more cash than before over a two year period.

Methinks that someone is jumping the gun. Yes, AT&T has "raised" the price of their wireless plan... but it's not an apples-to-apples comparison, since the new plan is 3G and the old one is not.

Now, if you want to argue that 3G isn't enough of an improvement to be worth the premium price, I'll hear you. I have no experience, myself, so I have no idea. I will note, though, that Apple has thoughtfully discounted the iPhone 3G to the point where the TCO over two years is within $30-$50 of what it has been. So even if 3G turns out to be nearly worthless, I'll only be paying about $3 extra per month over two years.

As for AT&T putting me over a barrel and raising their rates... I wouldn't put it past them, but it would surely be a very stupid move, calculated to ensure the loss of a double-digit percentage of their customers. And can they do that during my contract? Cell phone contracts may be drawn up by Mephistopheles and signed in blood, but they are contracts, and I'm pretty sure that threatening to unilaterally raise prices will invalidate them.

To make a complete Apples to Apples comparison we need to see if the beefed up plan pricing applies to ALL AT&T phones using the 3G capabilities or only iPhone.

What would be nicer is if we could get an iPhone for the sprint network :P

This metaphor is stretched to say the least.

This article is about the iPod touch, not the iPhone guys (serhei , dougp). The touch is not the new XP. XP was superceded by Vista whereas the touch and the iPhone are two distinct products.

I expect features from the new iPhone to slowly get rolled into the iPod touch (i.e. GPS) but not any time soon, so as not to steal the iPhone's thunder. The usual apple market strategy of changing a product or two slightly every six months will ensue.

Right but the article is comparing the iPhone to vista and the touch to xp. Basically he is saying that being locked in to a single service provider is an anti feature similar to all the drm in vista so we should all stick with xp (the touch)

Do we have any numbers on iTouch sales so far? The plan on the iPhone 1.0, was on the expensive side, but I still assume that its adoption rate was higher than the iTouch(based on the fact that I know people that have iPhones but no one that owns an iTouch).

I just don't see the added value of the iTouch if there is no phone, and city wide(let alone nation wide) free wifi hotspots are still not realized, because there is no guarantee of connectivity.

If you lived in Vermont, where (last I knew) you still cannot get an AT&T wireless signal anywhere in the state, you might think differently.

Facing South (towards Rt 12), standing at the highest point overlooking Silver Lake in Barnard - I can get 1 bar with my iPhone - barely. Yes, AT&T's coverage is essentially non-existent in VT. When I'm up there though, this is a positive ...

I don't think the WiFi coverage in VT blankets the state either, making that iTouch browser a little less useful.

funny, i know several people with the touch, myself included, but few with the iphone. fwiw, i already have a phone and don't like at&t (verizon seems to have much better coverage and it's cheaper), but find it useful to have an ipod with a browser. then again, i live in boston, so i don't have too much trouble finding hotspots.

I'm 12 months into a 2yr T-Mobile contract, so the Touch is looking pretty nice despite the 3G thunder.

I would hope that apple has some control over plan price increases. It would be very bad for apple if the carriers they wed themselves too start behaving "badly".

Looking at Apple's business with the music labels and now with the carriers, they seem to have taken "Where there's muck, there's brass" to heart (thanks, Paul). Their business model seems to be cleaning up the muck, first in music and now in telephony.

I expect an ongoing struggle between Apple's philosophy (simple, straightforward products and pricing) and their partners' philosophies (pay for a song, pay for a ringtone from that song, pay for the bits to move the song over the air, pay for the bits to move the ringtone over the air, system acccess fees, &c.)

Oh wait, I forgot: and what you pay differs depending on whether "over the air" is wifi or 3G. Muck indeed, Apple has an Augean task ahead of itself.

500 bucks for a 32GB iPod touch? Damn I can get an EEE PC for that price, install windows xp on it and have everything the iPhone has, xept I can plug DVDs into it.

This is pure insanity.

"I can get an EEE PC for that price, install windows xp on it and have everything the iPhone has"

I hope you realize that you can have everything the iPhone has that you perceive you want, not everything the iPhone has. I trudge into this thread wearily, since I have been privy to this debate since the 1980s.

But do you think, just maybe, that while you do not care for it, there are others who value the design inherent in an iPod's hardware and software that gives them value compared to Windows XP?

Compared to XP yes. No question. I just dislike the fact that having an iPod or iPhone gives me a great piece of hardware that can't run any software, not because nobody makes it, but because Apple won't allow it.

With the EEE I am not limited to what Asus states are acceptable programs to run. Thats pretty much it. The down side of the EEE is that it does not fit in my pocket.

Other things you can get for that $500 include two nights at the Venetian in Las Vegas, a 1992 Buick Regal in need of serious engine work, or a couple of hundred gallons of milk.

You're comparing prices of two rather different devices.