Don’t write off the iPod classic yet

When word got out that Apple had sent out invitations to a September 1 media event, I expected the usual speculation about new iPods, new versions of iTunes, and—just maybe, after years of unfulfilled hopes and dreams—a new, usable Apple TV. What I didn’t expect was much prognosticating about the venerable iPod classic.

Yet much prognostication have I seen. For example, our own Christopher Breen thinks the iPod classic has reached the end of the road, especially if Apple announces some sort of streaming-audio service. And Business Insider thinks Apple may offer a 128GB iPod touch that could spell the end of the classic’s tenure.

I addressed this very possibility a couple years back, just a few days after Apple’s September 2008 music event. I confidently proclaimed that the iPod classic was “just keeping the seat warm” until flash memory was cheap enough for Apple to offer a 128GB iPod touch. At the time, flash-memory prices were nosediving, and I predicted we’d see such a product sometime in 2009.

I was wrong, of course. For various reasons, flash-memory prices didn’t keep going down. In fact, they eventually reversed direction. And instead of releasing a 128GB iPod touch for the high-capacity crowd, Apple in 2009 simply bumped the classic’s storage back up to 160GB. (The September 2007 iPod classic was available in 80GB and 160GB models; Apple replaced those models in September 2008 with a single 120GB model.)

But while Chris is right that a streaming-audio service would reduce demand for a high-capacity iPod, I believe there would still be enough demand that Apple will continue to offer a player with lots of storage. For example, the classic is popular among those who rip their music to high-bit rate, lossless, or uncompressed files—64GB, the memory in the current highest-capacity iPod touch, just isn’t enough for these folks. (Heck, my video on upgrading an iPod classic to 240GB of storage was viewed by tens of thousands of people.) Until there’s an iPod touch with at least 128GB, I expect Apple to quietly keep the classic in the lineup.

So, for me, the big question is whether or not we’ll see a 128GB iPod touch this week. I’d love to see one, but given current prices for flash memory, I think it’s a long shot. Consider that you can currently buy a 160GB, 1.8-inch hard drive—similar to the one used in the current iPod classic—including a USB enclosure for less than $100. Apple surely pays a fraction of that for bare drives. Meanwhile, 128GB versions of the flash modules used in the iPod touch aren’t even officially available yet and will cost a pretty penny when that time comes.

Of course, Apple’s purchasing power might allow the company to get those 128GB chips before anyone else, but there’s still the price issue. In fact, I suspect that even using two 64GB modules—the current iPod touch uses two chips—would cost Apple considerably more than the aforementioned 160GB hard drive. So I’ll go out on a limb and say that if Apple is able to produce a 128GB iPod touch this fall, the price will be higher than that of the current 64GB iPod touch…which would make it just a virtual stone’s throw from the price of an iPad.

So here’s betting that the iPod classic will live to see another holiday season. But I’d love to be proven wrong. A retina-display, camera-sporting iPod touch with 128GB of memory…drool.