Last week at the launch of the iPhone by Steve Jobs in the US, there were many announcements by the man in the black turtleneck skivvy including a new Mac OS and a number of apps to go with Apple products. But there was one word missing from the whole presentation.

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courtesy: www.micahville.com

Many observers noted that while there was lots of talk about ‘i’ this and ‘i’ that, there was barely a peep was made about that other “i”-branded gizmo, the one that virtually single-handedly made Apple a household name in the first place.

And even though Jobs stood on stage and spoke about the three foundations of Apple, i.e. the “iMac, iPhone and Music”, the word: ‘iPod’ was not mentioned at all. Could that be because the iPhone is basically an iPod in disguise along with a phone built in and having a web browser and camera as well?

And could it be that the iPhone, which some say will be priced around the $350 mark in Australia, making it about the same price as an 80 Gb iPod Classic, is designed to quickly dominate the still expanding consumer smartphone market, the same way it did with portable digital music players, well before its rivals even knew what hit them?

Some have noted that this also makes sense in practical terms. Why carry two devices around when one will do the same job and some?

The mobile ecosystem may still be evolving, but convergence is still a major part and as one observer put it, “With the industry rapidly moving toward all-in-one devices, Apple may have no choice but to risk starving its own golden goose as it attempts, again, to shed its image as a niche maker of personal computers and introduce a second mass-market gadget in less than a decade”.

Whilst the iPod accounted for nearly half of Apple’s $25 billion in revenue last year, the rest came mostly from selling personal desktops and laptops and some Apple analysts have noted that the “iPod steam train is finally showing signs of slowing down with revenue from iPod sales was up just 8 per cent in 2007 compared to 69 per cent in 2006, as the market becomes saturated”.

Jobs said the company plans to sell 10 million iPhones by the end of 2008 and it is very possible that the iPhone sales will cannibalise sales of the iPod – or a case of robbing Peter to pay Paul, according to some overseas reports.

Regardless, no one at Apple has yet been able to answer the question of elephant in the room- why use an iPod when your iPhone has the same functionality and can be used to make calls and browse the Net as well, and of course is similar in price?

The answer of course, is that you wouldn’t.