iPod non-killer
I think we can read a bit into this quote:
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At the event, Jobs took pains to point out that the phone would not compete with Apple's popular iPod music player, but should viewed as an iPod accessory. "Wouldn't it be great if you could take a dozen of your favorite songs with you" on a cell phone, Jobs said at the time.
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So, a dozen of your favorite songs won't compete with the iPod. What's a dozen songs? Twelve x 4MB? That means 48MB... Let's round that to 64MB? (isn't the iPod buffer 64MB of Flash already?)
For a possible Flash iPod mini, it means it should at least have at least 4 or 8 times more space than "just a phone", which lands the capacity from 256 to 512MB. Unless they want to leave the iTunes-enabled phone in the dust, and put 1GB on it ("16 times more space than the Motorola phone").
But even if they update the iPod mini to 5GB, a Flash iPod at 1GB would only be 5 times less... Which is "too close to a regular iPod", unless they do consider the iPod Flash to be part of their "regular iPod" family... This is getting confusing. ;-)
Unless of course all those "flash iPod" rumors really are the one and only same rumor as this iTunes-enabled phone...
In any case, this would prove that Apple is at least interested in licensing their technology to other companies, which is a good thing.