CNET is running a piece that echoes my theory that an undetermined number of people are buying iPod Touches instead of iPhones. It's difficult to know how pervasive that phenomenon is but it's what I did.

Apple reported earnings results yesterday showing big sales of iPods/Touches (22.7M) and slightly lower-than-expected sales of iPhones (4.3M vs. 6.9 in the previous quarter). In my view, two things are holding people back where the iPhone is concerned:

• The general inertia that comes with an existing US carrier relationship for most people
• The perceived cost of iPhone ownership (especially the ongoing cost of the dataplan, much more than the phone). 

One test of the iPhone's $199+ cost-as-barrier would be to see how quickly the $99 refurbished AT&T phones sold. I'm not aware of whether they sold out. It's also worth noting that the cheapest iPod Touch is $229, more than the $199 for the iPhone (w/AT&T contract). So I would argue again it's not the device it's the dataplan. 

Compared to the iPhone, the iPod Touch doesn't have an input mic so it can't utilize the voice apps (although you can buy headphones with a mic for $80). It also doesn't have a camera. But, otherwise, it's an iPhone. And now, with Truphone, I've converted my iPod Touch into a phone, although it's got the hermetically sealed bathroom sound one often finds with VoIP calling

In general, I didn't want to leave my carrier Sprint but wanted the apps and iPhone experience. I suspect that there are lots of people in some version of this camp. And while it's annoying to have to negotiate the world of hotspots and pay for access at airports, the experience of using an iPod Touch on WiFi is generally superior to using the iPhone on AT&T's 3G network (as currently constituted). 

In addition, when Sprint announced that it would offer a Samsung Android phone -- but even more the Pre later this year -- I was convinced to wait before making the iPhone leap to AT&T.

Speaking of the Pre, there's the suggestion in Apple COO Tim Cook's remarks from the earning's call yesterday that Apple believes the Pre may have stolen some of Apple's IP in the design and functionality of the phone:

"We like competition as long as they don't off our IP. And we're going to go after anybody that does."

Q: Is that about Palm?

Cook: "I'm making a general statement...We will not stand for having our IP ripped off" and will use any "weapons at our disposal."

It will be widely perceived as "sour grapes" or heavy handed if Apple sues Palm. But Cook may in fact have a point with the multi-touch functionality, which offers a substantial user experience difference vs. other touch-screen phones. Palm is the only other touch-screen phone in the market, or coming to market, that offers it.