On Monday, just days after returning that review iPhone to Apple, I got my own. On Tuesday, Apple upgrades the iPhone and iPod touch with a 16GB version of the former and a 32GB version of the latter. Prices for the expanded editions are $100 higher.

So should I feel disappointed that Apple caught me flatfooted? Well, I have to admit it was slightly disconcerting, especially since I spent Monday evening with my long-time friend Craig Crossman, on his Computer America radio show, discussing possible future iPhone updates. I suggested an update with expanded memory, but we didn’t expect the real upgrade, incorporating 3G network support, until June.

Indeed, the new products are the same as the old in every respect beyond storage capacity.

Well, perhaps I should have listened to myself a little more carefully; maybe, that is. You see, I could have waited a day, dug deeper into my wallet and come away with twice the capacity on my new iPhone. But I’ll get back to that shortly.

Now as a practical matter, the existing iPhone and iPod touch models didn’t become obsolete overnight. All Apple did was give you an extra choice, should you decide to accept it. To me, a 32GB iPod touch is the far more significant upgrade of the two, because it adds one more nail to the iPod classic’s coffin.

You see, I am willing to bet that a significant number of people who own the traditional iPod never approach its maximum storage allotment, not even close. My son, Grayson, for example, uses between 32GB and 40GB, although he has 160GB available, and he’s a musician and inveterate music lover.

Do you see what I’m getting at?

I fully suspect that you are going to see fewer and fewer sales for hard-drive based iPods now. Sure, the 32GB touch is a a lot more expensive, twice as much as the low end classic in fact. In other words, you can buy two of the latter for the price of the former, and that may present a dilemma right now, particularly in a shaky economic climate.

But Apple remains at odds with Wall Street in one key fashion. You see, they don’t just look at the next quarter or the one following, but at the long-term picture. When they talked of the Wi-Fi mobile platform during that call-in session with financial analysts last month, they were laying out their vision for the future of digital music players.

Was anyone listening?

While Microsoft is cutting the prices of the Zune, because it’s not selling very well, and hoping against hope to imitate Apple’s iPod circa 2005, they are just eating dust. The standalone digital music player is an endangered species. The ability to add email and Web surfing features is significant, and Apple’s touch screen platform is way ahead of the competition.

Now let’s return to my fateful purchase decision. First of all, it’s clear that Apple and AT&T have resolved some of the early activation glitches. In my case, since I already had an AT&T account, setup was primarily a matter of adding a data plan to my service, and transferring the phone number for a Motorola RAZR V3 to the iPhone.

The purchase was made at the nearest AT&T store, about a 10-minute drive from my office. The sales representative, John, was gracious enough to hold a unit for me when I called him about availability. The actual transaction took maybe two minutes, plus the time I spent talking with a customer who was returning his BlackBerry, and eying his own iPhone. During our chat, I played with the tiny keypad of his smartphone, and found that single fingers on the iPhone’s touch screen are far better than the all thumbs approach on that absurdly ugly BlackBerry, at least for me. There’s no comparison.

Anyway, John gave me a phone number for AT&T support, in case I ran into any activation difficulties with iTunes. But I didn’t. I plugged in the iPhone to my desktop Mac’s USB port, answered a few brief interactive questions about my service and the data plan I wanted. That was all it took. Two or three minutes later, the iPhone was fully activated, assuming the number formerly used by the retiring RAZR. No Sim swap necessary, although some have gone that route.

But the real question is whether I should take back my new 8GB iPhone and exchange it for the 16GB version. For me, the answer is no. I’m only using less than half the unit’s storage capacity, and I don’t see a need to squander an extra $100 for something I just don’t need.

My final decision was to spend $69 on Apple’s extended service plan, which expands the iPhone’s warranty for an extra year. I used the change to take my son out for lunch, and the happy smile on his face confirmed that I had made the correct decision.

This article was posted on Tuesday, February 5th, 2008 at 7:25 PM and is filed under News and tagged with: Apple Ipod, Computer America, Craig Crossman, Dilemma, Economic Climate, Grayson, Hard Drive, Iphone, Iphone 5, Ipod Touch, Long Time Friend, Storage Capacity.