iPod touch eating the iPhone’s lunch?
Perhaps after a year in the market they—Ives, Cook, Forstall, Jobs et all—expected there would be some real competition in the smart phone / ultra-portable computer market segment. Actually, there is a close substitute for the iPhone, but it doesn’t come from RIM, Nokia, Google or even Microsoft. Apple’s closest competitor in this space is Apple and the closest substitute for the iPhone is not a phone at all—it is the iPod touch.
“The iPod Touch: everything great about the iPhone, minus AT&T.”
Well, at least those are the words News.com uses to summarize the phenomenon and they certainly seem to fit the available facts—6.9-million iPhones sold in Q3, 4.4-million iPhones sold in Q4 and a tripling (Apple doesn’t break out iPod touch sales) of Web traffic generated by iPod touch users around the holidays.
Another anecdotal fact that strongly suggests iPod touch sales jumped last quarter is the fact that iTunes App Store sales rose substantially in December—by over 100 percent—a figure that is not supported by the rise in iPhone unit volume alone.
“What’s going on here? My theory is that the iPod Touch is cannibalizing some potential iPhone sales. Plenty of users are satisfied with their current cell phone provider, but have read reviews indicting AT&T’s cellular network,” according to Matt Rostoff with News.com
Given the current state of the economy, this line of reasoning makes a good bit of sense, especially considering that the iPod touch lets the savvy consumer look like they are living large while avoiding the huge back end costs of an AT&T wireless contract (ie $199 down + 12 x $79.99 = $1,158.88 plus applicable taxes).
Personally, I got an iPod touch with the purchase of a new white MacBook last Summer (ie Apple’s back-to-school promo) and have been quite satisfied with that as I’m rarely far from a Wi-Fi access point. Moreover, like Rostoff says, AT&T is definitely the weak link in the iPhone food chain and an 8GB iPod touch provides 80 percent of bang at about 20 percent of the cost…
What’s your take?
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January 22nd, 2009
I Agree. I got the 32gig touch and love it.
I rarely use my cell so it is fine as is.
January 22nd, 2009
I have had a touch since I think about the time they came out. Back before the 3G iPhone. We also have 2 iPhones. The issue with the touch is not enough WiFi access yet to make it really a mobile device. But around the house I often use it instead of my assortment of Macs.
January 23rd, 2009
I got one for my wife to replace a PDA. My wife dos not use a cell phone very often and a Tracfone is all she needs. She loves the iPod Touch! I loaded a few apps to replicate those she used on her PDA and added a few games and other miscellaneous apps… TA DA!!! And WHOA its an iPod too!
She won’t let me play with it now
January 23rd, 2009
I agree also. The iPod touch is great. If I don’t have wifi access, I can pull out my Verizon cell phone and use the internet on that. Sorry AT&T.