Posted by: Peter Burrows on January 08
There’s been buzz for the past few weeks of a major increase in the popularity of the iPod Touch. In early December, it popped up as a top seller on Amazon. And many developers I’ve spoken with in recent days say they saw a huge rise in downloads starting on Christmas day, from what they believe are new iPod touch owners.
Now comes some data to suggest they are right. New survey data from AdMob, which runs an ad network for mobile devices, says the number of ads served up to iPod Touch devices rose from 86 million in November to 292 million in December. And the vast majority of those December clicks occurred after Santa had made his rounds. Traffic more than doubled the week of Christmas from the week before.
AdMob vice president Jason Spero says the iPod touch’s ascendance is unprecedented in its surveys. While ad activity on iPhones is also increasing at a rapid clip, “there was even more of an increase” for the iPod touch. “It’s truly astounding growth.” While AdMob doesn’t know exactly how many iPod touches are responsible, he says such an increase couldn’t have occurred without a big uptick in sales of the device (that is, it’s not likely it occurred because existing iPod touch users suddenly began clicking on far more ads).
So what’s the explanation? First, there’s economics. The iPod Touch costs $229, $299 and $399. That makes it far more affordable than an iPhone, since there’s no costly cellular service plan to sign up for. And given the thousands of games available on Apple’s App Store, the iPod touch suddenly looks like a more versatile altnerative to a Nintendo DS or Sony PSP. “We’re really starting to see volume kick in dramatically for the iPod touch,” says Kleiner Perkins Caufield & Byers partner Matt Murphy, who is point person for the VC firm’s $100 million VC fund for App Store developers called the iFund. “It’s becoming a very legitimate gaming platform, and young people are also using it to surf the Web, for social networking and other applications. It’s becoming a computer replacement.”
Bart Decrem, CEO of Tapulous, agrees. His company makes a game that lets iPhone or iPod touch users tap the screen to the beat of music played on the device. And he was surprised to see so many kids with the device on the plane to and from Cancun over the holidays. “The iPod touch is the big next story.”
No doubt, some of its popularity is coming at the expense of the iPhone. On January 7, BMO Capiital Markets analyst Keith Bachman put out a note pointing out that Canadian telco Rogers Communications sold just 130,000 iPhones in the December quarter, down from 235,000 the previous quarter. Maybe some people picked up an iPod touch instead. This may well be an example of Apple giving the market more affordable products, as many company watchers say it must in these troubled economic times—without ever had to come out and say so.
The iPod Touch is the Trojan Horse that Apple has introduced to give control to the Tax Payers who own the Internet!
I wouldn't read too much into Rogers subscriber stats. Rogers' data rates in Canada are prohibitively expensive, and the promotional rates at the iPhone launch were temporary. That is probably the main reason why iPhone sales were down last quarter.
When I asked my son-in-law why he bought an iPod Touch, he said (1) He already has to carry a Blackberry phone for work; (2) He wanted the best music source personally and for his car; (3) No worries about AT&T's $80/month for carrier and texts; (4) No worries about roaming fees and foreign outrageous fees (he travels to Asia regularly); (5) The podcasts and ebooks are a lifesaver during lengthy travel.
He says he has wireless connection available almost always, and doesn't need the iPhone. He's not a MacUser...yet...but says he's thinking about it more and more.
I'm hearing from more and more people some of the same, and students say it saves the expensive carrier charges.
I got a Touch instead of a Iphone because I don't like AT&T's service. The Touch gives me everything I want with none of the AT&T hassles. I have a phone to make calls, what a concept!
I, for one, would love an iPhone but I've been a satisfied Verizon customer for many years and I'm not ready to jump ship to AT&T. I broke down in the past few weeks and bought the 32GB Touch. I absolutely love it. Unfortunately, as soon as I'm away from my home wi-fi, I feel disconnected and wish I had 3G service. I'll have a tough decision to make when my Verizon contract expires in 12 months.
"popularity is coming at the expense of the iPhone"....I think it is just good Apple style market segmentation rolling down he pricing curve.
If the next iTouch version would be beefed up to run iWorks in addition to Mail and Safari it could steam roll the booming netbook market...recasting the rules in this new market.
There are so many WiFi-hotspots available to stay connected basically free of additional charges.
I don't think the iPod touch is cutting into the iPhone turf. If anything, it's cutting into the iPod classic turf, big time. I have an iPod touch because I wanted an iPod, not a phone. I also wanted the wifi and the apps. The iPod classic doesn't offer those features. Unless you have the need for a massive amount of storage space to carry your music with you, I don't see why anyone would get an iPod classic. A shuffle or a nano for extreme portability, and a touch for everything else. iPhones are iPhones and iPods are iPods. Two different products, two different needs met.
I agree with others that cell phone service from AT&T is terrible. That is the probably the main reason I will not get an iphone.
I love my iPod Touch and have no plans to replace my cracked and busted Nokia phone with an iPhone. But what I DO plan to do, is pick up the 2nd gen iPod Touch so I can run Fring on my iPod and close the VoIP gap at my home. Would be nice to have a "phone" to make calls with rather than firing up the computer.
I got an iPod Touch after Christmas when my Palm Treo died when my contract expired. Rogers Communications in Canada has prohibitively expensive plans (basically $4K out of pocket due to the mandatory 3-year plan - even before you make a single call). I think 3-year plans should be illegal, and I could not buy a Blackberry or anything else without a contract attached. Having a phoneless iPhone was a godsend. I love it, but like some others do wish I could have more connectivity outside of the home.
I'm planning to buy an iPod touch over an iPhone for all of its fab features--and because the majority of iPhone users I know love everything about it but the actual *phone* and kvetch about AT&T service regularly. My Motorola and Verizon service have never steered me wrong yet, so I see no reason to dump them. The only downside to the iPod Touch for me is the lack of iPhone's above-average camera. That has kept me from purchasing it for months, but I'm finally ready to suck it up.
I got my iPod Touch in November and love that it's slimmer than the iPhone. I've been using it with the Locle iPhone app (www.locle.com) and it works great thanks to the iPhone Wi-Fi positioning system.
I traded my PSP 2001 for an iPod Touch. I think they are the biggest handheld out there. I mean, the games are great and not expensive as the DS and PSP ones (I do have to admit the PSP does have a lot of better games but theres not a huge amount of choices really.....) and it is just so so so perfect. The only things they really could do to make it better (that couldn't be done in an update) are making it have better battery power and putting on a camera. I guess a GPS would be cool too but I dont understand how you would do that without a cellular internet thingy like the iPhone's AT&T service....but I just wanted to say if anyone is thinking of getting an iPod Touch...get it!! Ive gone through a Gameboy Advance SP, DS Lite, PSP 2001, and now an iPod Touch 16gb 2nd gen and the touch is the first thing that Ive had that is so perfect!!!! THEY ARE AWSUME!!!!!!!!!!!!
A blog on the daily doings of Apple and the many companies in its orbit, with insight and analysis by two longtime Apple-watchers BusinessWeek Senior Writer Peter Burrows and BusinessWeek.com Senior Technology Writer Arik Hesseldahl.
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