Surprise! Apple Inc.s iPod Touch Might Not Be Dead

Apple (NASDAQ: AAPL) may be planning a refresh of its iPod Touch family of products this year, according to a report from Apple Insider, citing a "source familiar with Apple's future product plans." The device is expected to stick with the 4-inch screen size found on current iPod Touch models, but I suspect that if Apple does refresh the device, it'll see a lot of improvements under the hood.

Faster processor, pleaseI don't know about you, but whenever I use a current generation iPod Touch, it feels very sluggish. This is no doubt due to the fact that the current iPod Touch models use Apple's antiquated A5 system-on-chip. Although the chip was fast back when it first launched back in early 2011, it's just downright outdated today.

Apple Insider's source reportedly didn't give the site details on what applications processor Apple would use in this rumored iPod Touch update, but I believe the A7 would be the most sensible choice.

Not only does the A7 provide a substantial performance improvement over the A5 (as shown below), but the A7 is a 64-bit chip, which -- assuming Apple makes the iPad mini 2 the entry iPad model this fall -- should further help Apple transition all of its devices to 64-bits.

The A7 is way faster than the old A5; it's not even a contest. Source: Primate Labs.

Finally, given that Apple doesn't seem to want to update its iPod Touch very often, the A7 will likely provide solid performance for years to come.

More memory, higher storage optionsApple Insider suggests that Apple might offer the iPod Touch in 16 gigabyte, 64 gigabyte, and 128 gigabyte storage options. Further, the current iPod Touch models only have 512 megabytes of memory. I expect Apple to bump that up to 1 gigabyte in a refreshed model.

An upgrade in the storage capacities of these devices should allow users to store more (and larger) apps as well as a greater number of songs and videos, which makes sense given the iPod Touch's purpose in life as a handheld content consumption device.

A better camera? How about Touch ID?Apple Insider suggests that Apple might take the opportunity to upgrade the iSight and FaceTime cameras found on the device. Giving such an updated device cameras roughly on par with those found on the iPhone 5/5c seems like the right move.

Finally, this isn't mentioned in the Apple Insider report, but one comment in response to Apple Insider's report wonders if including Touch ID and NFC would be a good idea. I tend to think of the iPod Touch as a "mini iPad." Given the lack of Apple Pay capability via NFC on the iPad Air 2, I doubt that Apple would include it in an updated iPod Touch.

Touch ID is trickier. On one hand, it's a convenient feature; on the other, Touch ID isn't a "must have" feature -- especially for the iPod -- and I don't think Apple would see enough incremental sales due to its inclusion to offset the increased per-unit costs it would see from the inclusion of Touch ID.

What Apple needs to deliverIf Apple wants to update its iPod Touch lineup to capture whatever revenue it can from that category, it has to very carefully balance the cost structure-to-feature equation. Big upgrades such as processing speed, memory, and camera are immediately obvious and -- in aggregate -- should be enough to make such an updated iPod a compelling upgrade from fifth-generation and older devices.

I look forward to seeing whether Apple really does intend to update the iPod Touch line and, if it does, what enhancements it will ultimately bring to the table.

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Ashraf Eassa has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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