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Apple's Touch Max: will have no phone!

"It's only rock and roll" says the playbill for tonight's big Apple announcement. It will almost certainly give us our first clue about the "Apple Tablet" – but it will also mark the beginning of the end for – yes, the iPhone!

Don't expect the Apple hierarchy to announce this, but do watch for any suggestion that the new Tablet might have a phone built in. It won't. Apple is finding the phone business "unsatisfactory" to quote one analyst who claims to have seen a preview.

Rumours are two a penny. The oldest rumours (with pictures, yet!) about the Apple Tablet, go back to 2005. It's all smoke and mirrors, and couldn't hurt a fly. But there are stats, which could hurt a lot more than a small insect.

Here's the deadly statistic: something like 70% of sales of software from Apple's Appstore don't go to iPhone users, but to iPod Touch users instead. It would be even more, Apple believes, if the Touch had a camera on it, because some people buy the iPhone just for that.

There are people who would take the Touch with them more often, if they could take pictures. They'd be quite happy to have a standard flush-away phone for calls.

"By phone standards, the iPhone has been a success only in America and the UK," said our mole, pleading to have her name kept secret. "But it doesn't pass corporate security requirements, and the rewards for jumping through that hoop just don't inspire Apple executives to persist."

The Tablet, when it comes, will (apparently) be a paper-back sized device, following the primary market complaint about the iPhone – "The screen is too small…" – it will therefore fulfill the requirement for a bigger screen. And it will have a camera – as will the new updated Touch, we're told.

The thing that's worrying the phone companies, is the amount of money Apple wants from the iPhone. Network requirements are directly opposite of Apple's – phone companies want us to keep our phones for longer, and Apple (and other handset makers) want us to replace them more often.

So the important question being asked of the market is this: "If we give you a better iPod Touch, will you really want the iPhone?"

For a substantial number of people, the answer is going to be an emphatic "Yes!"

The fact of the matter is that people who use the iPhone tend to log onto WiFi hotspots to download things. So (the logic goes) maybe they don't really need the 3G connectivity?

Probably, that logic is the logic which also says we don't need insurance. Most of the time, we don't. When we do, we want it urgently! And the same seems to be true for iPhone users; most of the time – 95% would be our guess – you don't want 3G data.

But when you do want an immediate over-the-air link to the Internet from an island in Poole Harbour or from a boat off Norwich or a Welsh mountain, you really do want it, and right now.

That the Tablet will show is whether the market for a phone sized Touch is as big as it could be, if the screen were bigger.

What it won't show, is whether the Touch would sell even better if it had 3G data only (no voice) as well as WiFi data.

Right now, however, the Apple view of the market is that the phone market isn't a patch on the Appstore and Touch software and hardware business. If it can find a way of ever-so-delicately pulling out of phones over the next three years, be sure it will. It's not enjoying its partnership with the networks, and doesn't believe that business has a future.

Today's Apple razz-ma-tazz will focus on music, "Cocktail" marketing of music, and iTunes developments. The Tablet, if it does get launched (not a certainty!) will get its share of excitement. The camera Touch will be a best-seller. Updates to the Appstore will definitely be important.

The hidden story – that the iPhone has been a flop everywhere in the world except the UK and US – will be studiously avoided. It's heresy to admit that.

Nonetheless, today marks the beginning of the process by which the iPhone could be pensioned off; if it does fade away by 2012, then today will be seen as the day the suicide note was written inside Cupertino.