I'll probably get an iPhone when the next model is released. But some folks simply want to run the cool iPhone apps without getting stuck with a phone company contract, hence the appeal of the iPod Touch. This article introduces iPod Touch owners to Voice Over IP ("VoIP") and SMS software for the iPod Touch. With VoIP software, one can have phone conversations over the Internet without need of a phone company.
The article touches on a disadvantage of this approach, in that you need to be at a WiFi hotspot. Still, a cheap cell phone and iPod Touch might be an attractive alternative to an iPhone for some folks.
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