Apple wants to sell iPods to people who want iPods, and iPhones to people who want iPhones. What they don’t want is people who want an iPhone, but will make do with the combination of an iPod Touch and freebie phone rather than cough up an additional $300.

They needed to refresh the iPod line overall and get a real video iPod on the market. And with the wireless capabilities of the iPod Touch, it would have gutted iPhone sales if the iPhone had stayed at $599. Instead, they’ve got a nice, cohesive product set that give consumers a lot of choice without price being a huge factor. I can get a video iPod/wireless device, or throw in a phone for a hundred bucks.

I certainly didn’t feel ripped off that my iPhone cost $600. The moment I saw the iPod Touch I knew they were going to have to do something. I mean, I’ll take my ecoupon and all — I’m eyeing an iLife ’08 family pack, although I don’t know what I’ll do with the dollar I have left over.

As for the $100 rebate – I think Apple will generate more money from a $100 in store rebate in the long run (probably what they said over at ZDNet). It is hard to find anyhting at an Apple store for less that $100.

Finally, I agree that if you have to have it first, you know you are going to pay full price – quit crying everybody!