iPod touch 3G as low cost iPhone
John Gruber on a 3G enabled iPod touch as the low cost iPhone:
It’s a fine idea, but without carrier support it wouldn’t work, and I don’t think any major carrier would support it. Data-only connections and VOIP for all “phone calls” are surely the future, but they are not the present.
US carriers won’t support it, but there won’t be a problem outside the US. And a low cost iPhone would mostly sell in non-US markets where carrier subsidies are not as dominant. American consumers already get a “free” iPhone 4, so a low cost iPhone doesn’t have to work in the US (but T-Mobile might still support it).