Apple Kills Back-To-School iPod Freebie

Not too long ago, we covered news that Microsoft--in an apparent bid to steal Apple's thunder--was offering a free XBox 360 with the purchase of any qualifying PC. Apple has offered a "free" iPod Touch for several years. The company didn't actually ship an iPod with each system; students were required to order both, then submit a rebate to Apple for the cost of the iPod. In the past, these rebates have been worth as much as $299, making them an attractive treat.

Apple's new strategy is to offer all students a $100 gift card for use in the Mac App Store, iBookstore, iTunes, or the App Store. This is a lousy move for several reasons. Not only does it chop up to $199 off the value of the original offer, the card can only be used to purchase content of one type or another. As enticements go, it's significantly weaker than what's been available in years past.

We doubt Apple's diminished incentive will have a serious impact on sales amongst the Mac faithful, but anyone on the
fence may well choose to stay there. The iPod/iPhone are typically thought of as gateway products; they introduce consumers to Apple products at a relatively low price. Killing the free iPod Touch nixes this advantage. The second problem is that the iPod Touch has an intrinsic value--anyone who opted for the original program and then didn't like the iPod could resell it and actually end up making money on the deal. The gift card is only valuable if the purchaser actually buys content. Apple's various content sale centers are obviously extremely popular, but popular doesn't equal 100 percent customer usage.

Microsoft appears to have a decisive advantage over Apple in the wake of the company's decision. The XBox 360 that's being offered has just 4GB of storage as compared to the 250GB XBox 360 S. While that's a bit of a bummer, MS does offer an external hard drive (albeit at the unattractive price of $129). Toss in the fact that PCs tend to offer better performance then their equivalently positioned Apple products, and the ball is in Redmond's court. Obviously the appeal of an XBox 360 isn't universal, nor particularly valuable to anyone who either doesn't like the XBox or already owns one, but the tempting value of the resale option is, well, tempting.

Whether or not either option will sway purchase decisions from either camp is another point entirely and difficult to estimate. We'd love to hear from readers who have either opted for Apple's previous iPod Touch or intend to go for the $100 gift card. Similarly, is there anyone out there whose decisively persuaded by the XBox 360?