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Apple's iPod Touch: A versatile winner

At the much-anticipated iPhone 5 event, Apple also updated its iPod Touch and iPod Nano line-up. The iPhone 5 took centre stage, of course, but I think the iPod Touch is an undervalued device that can extend Apple's reach worldwide.

What is most interesting about this new iPod Touch is the fact that this one device serves many purposes. It is a great MP3 player, but it can also be used to play movies, watch video via Wi-Fi, and make Skype calls. The addition of Siri makes it a personal assistant and its Retina display, combined with great gaming apps, makes it one of the best handheld gaming systems on the market. It is one of the most versatile devices available that is not a smartphone.

But true to form where Apple is concerned, there's more. It also adds a 5-megapixel camera, making it a solid still and video camera. Apple's great iPhoto app allows users to manage and even edit photos and videos on the device itself. Attaching a strap only emphasises the fact that this new iPod Touch is wiggling its way into the market for point-and-shoot cameras.

For about the same price as a dedicated point-and-shoot camera, and even cheaper in some cases, a buyer gets so much more. Sure, many of the point-and-shooters have advanced features and more megapixels but they are single-purpose devices. Research shows that for most consumers, a 5-megapixel camera is adequate to take quality pictures that can be shared easily via a Wi-Fi-enabled iPod Touch.

This enhanced iPod Touch is important for Apple for two major reasons. First, it will be positioned as the most versatile non-smartphone device on the market. While many new smartphones offer similar features, Apple's operating system and rich ecosystem make it attractive for many who want a dedicated handheld media system.

Our surveys show that many people are reluctant to use their smartphones for video playback and gaming since both drain battery life quickly. It turns out that voice calling, texting, taking and sharing photos, and playing music are the primary uses of their smartphones, so having the longest battery life possible is very important. Those who enjoy gaming or video streaming, however, tend to do so on smartphones more sparingly to preserve the battery. To these folks, an iPod Touch is the ideal solution.

The second reason the iPod Touch is so significant for Apple is that it becomes, in a sense, a way to recruit more people to the Apple ecosystem. For various reasons, many people will not buy an iPhone yet would still like to access Apple's vast offering of apps, music, and videos.

Interestingly, I am meeting more and more people who decided to buy an Android phone but also bought an iPod Touch to supplement their mobile media experiences. Apple already has more than 425 million credit cards tied to its ecosystem of services. With the iPod Touch and rumoured iPad mini, plus new iPhone 5 converts, that number could reach well over 500 million by the middle of 2013.

The new iPod Touch can potentially help Apple bring more people into its content and services ecosystem. Even if users choose a different smartphone, the iPod Touch offers so much versatility that it could be a very attractive supplemental option and, at the very least, could replace a point-and-shoot camera. Add in its other features as well as access to Apple's apps and services and it becomes the kind of device that one can justify buying over similarly priced single-purpose devices.