If your kid is too young for an iPhone but might like a device that still sends iMessages, places FaceTime calls, streams music and can play games, you might want to consider Apple's new iPod touch, which is available now and starts at $199.
I bought one a couple of days ago to test out. It's kind of like a mini iPhone that can't place phone calls — though it can do FaceTime video chat — and only gets data over Wi-Fi. That means you don't have to pay for a data plan, but you can't use it anywhere you would an iPhone.
I like it a lot more than I thought I would, though as an owner of an iPad and an iPhone, I'm still trying to find out where it fits in my life. It's fun, but Apple isn't going to suddenly sell several million of these things unless there's some retro trend coming back I don't yet know about.
One other potential use: The iPod also makes an affordable option for business owners who need an iOS device to accept payments through an app like Square or PayPal.
Here's what you need to know about it.