"The new 2.2 update for the iPhone brings a lot of great new features. Google Street View, direct viewing, listening and download of podcasts and a few small but neat tweaks. The iPod Touch also got a 2.2 upgrade, but it lacks one headline feature: Street View. Why? To answer that, we should take a look at the different goals Apple seems to have in mind for the two products, and also at arbitrary, software-based product differentiation in general.
On launch, the iPod Touch was immediately labeled the "phoneless iPhone". There were some other hardware differences (camera, volume buttons) but the description was essentially correct. If didn't want a contract, or if you lived outside the US, you bought the Touch.
As the two lines matured, they grew apart. The 2.0 iPod Touch gained built-in support for the Nike+ system, a dongle which sits in your sneaker and tells the iPod how far you have run. The iPhone 3G got GPS. These were hardware differences and made sense: The way Apple uses GPS pretty much mandates an always-on Internet connection to be useful, and the iPod Touch, lacking 3G, needed another way to track a runner's distance.
But the lack of Street View is a software diference. Why wouldn't Apple include it in the Touch? You might say that, without an Internet connection in the street, it would be useless, but my computer can access Street View and I never take it outside. In fact, out in the street is arguably the least useful place for Street View -- you can just open your eyes and see the real street in front of you.
This seemingly `arbitrary crippling of devices isn't unique to Apple. Camera makers do the same thing. Take Canon as an example. All Canon cameras use a version of the company's DIGIC chip to process images. But while the high-end (more expensive) cameras have RAW support, auto-bracketing and higher shutter speeds, the cheaper cameras don't. Because it's a lot cheaper to make a lot of the same chip, Canon simply switches the extra features off in firmware. Otherwise, all the products in the range would start to look very similar.
In fact, most camera manufacturers do this, and Canon is one of the more open ones. Because it makes public the inner working of parts of its software, hackers can re-enable many of the disabled features. Take a look at the Wired How-To Wiki to find out how easy it is." (Continued via Wired.com, Charlie Sorrel) [Usability Resources]