An industry expert has dismissed the revamped standard iPod as "a stop-gap measure." iSuppli analyst Chris Crotty suggests that the iPod classic will only exist "until the company can add enough flash memory at an affordable price to provide high-capacity options." Apple has announced the iPod touch with memory capacities of 8 and 16GB.

However, despite Apple's lean deals on huge amounts of Flash memory, it seems not even that was enough to bring iPod touch storage anywhere near that currently achievable with hard drives - at least not at a desirable price point.

"It raises the question of why a company would offer its best display, needed for videos - particularly movies - without employing the corresponding high storage capacities useful for video storage," says Crotty. "Why was Apple against the idea of an iPod touch with a hard drive? It seems like Apple had anticipated flash prices being lower and being able to offer higher capacities for the iPod touch."

However, Crotty is more gracious about the capabilities of the iPod touch. "The addition of Wi-Fi to the new flagship iPod...is not surprising given what competitors like SanDisk and Microsoft have already done with their products. At first pass, however, Apple's Wi-Fi implementation is more powerful than those of its competitors," he said.

As for the tie-up with Starbucks, Crotty suggests the deal "ties into Apple's longtime iPod strategy [of] using content at break-even to support sales of high margin players and increase switching costs among its customers."