6 Companies Hating the New iPod Touch

Apple (Nasdaq: AAPL  ) unleashed a flurry of product announcements yesterday, but the new iPod touch may be the most exciting new gadget in the lineup.

Sure, the multitouch iPod nano is adorable. The $49 iPod shuffle just became more functional. But the iPod touch takes the biggest step up, with features that make it more like an iPhone than simply an iPad mini. Let's go over some of the new goodies the iPod touch is packing, and single out the public companies that stand to gain or lose along the way.

True to the tidbits leaked by British retailer John Lewis two months ago, the new iPod touch will come with a front-facing camera for Apple's FaceTime video chat and a rear-facing camera for HD recording. Kodak (NYSE: EK  ) 's Zi and Cisco's (Nasdaq: CSCO  ) Flip have slightly cheaper handheld cameras that record in HD, but then again, they're only cameras.

On the gaming front, the same A4 chip that powers Apple's iPhone 4 and iPad should enhance the iPod touch's gaming experience. Its new three-axis gyroscope can't hurt, either. There's also the new Game Center app, which will encourage multiplayer action for players on a Wi-Fi connection. Those wails of despair you're hearing from Sony (NYSE: SNE  ) and Nintendo's (OTC BB: NTDOY.PK) headquarters aren't coincidental.

Diehard gamers may argue that console games are no match for cheap App Store offerings, but the disparity narrows when you limit your comparisons to portable gaming systems. The lack of physical controller buttons is a knock against Apple, but Nintendo can't seriously continue to claim that the iPod touch isn't making a dent in this niche.

Another loser, naturally, will be Microsoft (Nasdaq: MSFT  ) . Once again, its Zune has an even higher hurdle to clear in its fruitless quest for relevance. Also, Game Center presents more of a direct challenge to Mr. Softy's plans to integrate gaming as a key component of its new Windows Phone 7.

I'm also thinking that SanDisk (Nasdaq: SNDK  ) will be a net loser here. The flash memory champ makes storage cards for digital cameras, and even memory sticks for Sony PSP devices. The iPod touch is flash-memory based, but it's not expandable. If it fills up with snapshots or videos, the content simply gets transferred to a computer hard drive to make more room.

Once again, Apple's success seems to come at others' expense. I wouldn't want to be any of these rivals today.

Beyond Apple, are there any publicly traded winners here if the new iPod touch is a hit? Share your thoughts in the comment box below.

Microsoft is a Motley Fool Inside Value selection. Apple and Nintendo are Motley Fool Stock Advisor picks. The Fool has written calls (Bull Call Spread) on Cisco Systems. Motley Fool Options has recommended a diagonal call position on Microsoft. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Longtime Fool contributor Rick Munarriz is starting to see more Apple products creep into his home lately. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 02, 2010, at 7:35 PM, Oldfool103 wrote:

    Nice summary. I am also looking forward to transferring my telephone to the WiFi and you might want to add the cable companies and the networks. It may be the iTV, it may be the GoogTV, it may be something from Amazon--or, likely, a combination of the three--but the rock has been moved and we will one day have television on demand. Personally, seeing all of the money I waste each month on TV channels I will never watch in order to get a few that interest me, I can hardly wait.

  • Report this Comment On September 02, 2010, at 9:39 PM, nitman111 wrote:

    I'm not sure I'd agree that Sandisk will be a net loser. I have a digital camera and a video camera, and for both I bought memory just once. I transfer the recordings and pictures to my hard drive, and re-use the memory sticks. So, from a customer use case, I would argue there's no difference. If any, this might be a positive, as Apple might pack the Ipod with more flash than I would care to buy seperately, which might drive price elasticities of demand. It's like hard drives being cheaper when they are part of the computer than when bought seperately. That in and of itself might drive greater demand.

  • Report this Comment On September 03, 2010, at 4:21 PM, OnlyTheTruth wrote:

    Rick Aristotle Munarriz,

    Please consider taking a closer look at Sandisk. Market trends, device proliferation, and consumer demand all point to success. If, however, your intention is to generate controversey in order to boost ratings, then you are succeeding.. although at the cost of your insights.

    Regards,

    Bob

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