Apple's iPod touch sales double, nearly on par with iPhone

[AppleInsider]

Sales of Apple's iPod touch, once discounted as a pricey niche product, have more than doubled over the past 12 months to rates nearly in line with the iPhone, fueled by an explosion of attractive gaming titles on the App Store that are boosting overall multi-touch device shipments into Nintendo DS territory.

Though largely overlooked in light of repeated cookie-cutter comments on the netbook space, Apple for the second time in as many months Wednesday offered data sufficient for breaking out sales of its touch-screen iPod, something it has historically avoided in an effort to limit competitors' views of its success.

Specifically, Apple said last month that it ended 2008 with 30 million multi-touch users, 17 million of which were iPhone owners, and therefore 13 million of which were iPod touch users. During the first quarter of 2009, that multi-touch audience swelled to 37 million units, according to Apple interim chief Tim Cook, driving surprising growth of a novelty product during a tough macro environment and further distancing Apple from any potential competitors.

"[O]ne of the keys behind the growth of the iPod this quarter despite the economic environment was that the iPod Touch more than doubled year-over-year," he said. "So, it was a tremendous result and as [CFO] Peter [Oppenheimer] mentioned earlier in his remarks, the sum of iPhone plus iPod Touch is now about 37 million units and so, it provides an enormous platform for developers to develop on and with [...] our recent SDK changes the developers are working on now, I think it just unleashes a whole new level of innovation that keeps Apple years ahead of everyone else."

Apple reported shipping 3.79 million iPhones during the quarter, meaning it also sold a comparable 3.21 million iPod touches when the iPhone sales data is culled from the reported 7 million increase in multi-touch users. The jump helped contribute to a near $3 sequential rise in iPod average selling prices but it more importantly puts Apple on a pace to grow its multi-touch audience by nearly 30 million users this year alone, assuming the unlikely scenario that sales of iPhone sales remain flat following the introduction of new models this spring.

Even more significant may be Apple's emergence as a leader in portable gaming, with quarterly multi-touch device sales now having nearly caught up with those of Nintendo DS, the market leader. Nintendo reported selling 31.43 million DS series handhelds during the 2008 calendar year, or an average of 7.86 million units per quarter compared to Apple's 7 million handhelds reported in its most recent quarter.



The appeal of the iPod touch as a gaming device has admittedly caught industry watchers by surprise, some of which failed to recognize the advent of the App Store as a catalyst that would help drive sales of multi-touch handhelds and not the other way around.

"We did not appreciate what role the [iPod] touch would play when Apple introduced it in September 2007," said Needham & Co. analyst Charles Wolf. "But it’s now clear that the touch has emerged as a viable game-playing platform."

Responding to Apple's second-quarter earnings, Wolf noted that the App Store closely resembles the PC paradigm, by which hardware sales are driving software sales. However, he added that "the one obvious exception is the iPod touch."

"We believe software applications are beginning to drive sales of the [iPod] touch, especially among game-addicted younger people," he said.

Apple, which will sell its 1 billionth App Store application later this afternoon, says a third of the 35,000 applications on the digital download store are games, meaning it will have sold over 300 million multi-touch games in approximately 9 months. Though its unclear how many DS titles have been sold since the platform launched in 2004, Nintendo did say last month that 83 titles had each surpassed the 1 million mark, with 7 games exceeding the 10 million mark.

[ View this article at AppleInsider.com ]

[melgross]

Give it time.

[Booga]

With all the discussion over tiered iPhone hardware devices, it's now interesting to ask if Apple's going to release multiple versions of the iPod Touch at various price points-- differentiated by more than their GB capacity (which for an app-store-centric user doesn't provide a lot of utility.)

On the other hand, maybe it homogenity is its strength.

[johnmcboston]

I'm curious about the number of touches owned by iphone users. Maybe for other family members? or to play games and now drain the iphone battery??

[tundraboy]

I don't know if they foresaw it or not, but it was a stroke of genius on Apple's part to install the same OS on the iPhone and iPod touch. Nokia, MS, Google, RIMM & Palm may have something to put up against the iPhone in the smartphone space but they have nothing to compete with the iPod Touch. With two sources for apps demand, and their huge head start, it's getting harder and harder to see how anyone else's app store can catch up with Apple's. Maybe Nokia because of their dominance outside the U.S. But they really haven't shown any prowess in software.

And if there's still any doubt out there, we know where the PMP business is headed now and Zune is dead.

[GTL215]

I'm waiting for techstud to somehow disparage the very apple products he claims to like.

[iReality85]

Originally Posted by AppleInsider

Sales of Apple's iPod touch, once discounted as a pricey niche product, have more than doubled over the past 12 months to rates nearly in line with the iPhone, fueled by an explosion of attractive gaming titles on the App Store that are boosting overall multi-touch device shipments into Nintendo DS territory.

Even more significant may be Apple's emergence as a leader in portable gaming, with quarterly multi-touch device sales now having nearly caught up with those of Nintendo DS, the market leader. Nintendo reported selling 31.43 million DS series handhelds during the 2008 calendar year, or an average of 7.86 million units per quarter compared to Apple's 7 million handhelds reported in its most recent quarter.

I believe this is a slightly skewed comparison, given that the iPhone/iPod Touch and Nintendo DS are aimed at catering towards principally different market segments. The tone of this article suggests that the boon in Apple's sales are due to consumers being strictly interested in gaming. iPhone users buy the iPhone because it is a phone, first and foremost. I'm willing to wager that iPod Touch owners bought the device for its music playing abilities, not gaming (although the fact that you can game on it is a plus). Nintendo DS owners own one for the reason that it is a dedicated gaming machine. This article is comparing the sales of apples (no pun intended) to sales of oranges.

A more accurate reading would be for Apple to query those 1st quarter customers and ask them for what purpose did they purchase an iPod Touch. The numbers presented in this article are meaningless without knowing the customers' intent on using the device.

[DimMok]

Viable perhaps until the game titles start to grow up.....

One can only take so much of Farting, Tic Tac Toe, X Ray, and the countless other crapware.....

SuperMonkey Ball was the start, but havent seen much after that.

Whats the problem?

[DimMok]

Viable perhaps until the game titles start to grow up.....

One can only take so much of Farting, Tic Tac Toe, X Ray, and the countless other crapware.....

SuperMonkey Ball was the start, but havent seen much after that.

Whats the problem?

[hmurchison]

Originally Posted by tundraboy

I don't know if they foresaw it or not, but it was a stroke of genius on Apple's part to install the same OS on the iPhone and iPod touch. Nokia, MS, Google, RIMM & Palm may have something to put up against the iPhone in the smartphone space but they have nothing to compete with the iPod Touch. With two sources for apps demand, and their huge head start, it's getting harder and harder to see how anyone else's app store can catch up with Apple's. Maybe Nokia because of their dominance outside the U.S. But they really haven't shown any prowess in software.

And if there's still any doubt out there, we know where the PMP business is headed now and Zune is dead.

+1

I was set to get a iPhone this year but decided that it wouldn't be good to have my gf on Sprint and me on ATT.

So instead we're all going to get iPod Touches (me, lady and 10 yr old)
In fact those who don't think the iPod Touch is a threat to the DS.

Our two children have DS (my son and her daughter) neither is getting a new DS when their current one breaks. The DS is cheaper to get into but good games are 5x what a games on the app store run. Do the math it's an easy decision IMO.

[GTL215]

with the new 3.0 software allowing USB attachments, gaming on the iPod Touch (and iPhone, obviously) is going to explode...what constantly pops into my mind is the following: you know the Wii steering wheels you put the Wii-mote inside? Well, imagine the exact same thing but you put the Touch inside, neatly fitting into a 30-pin connector. You can then "steer" via the accelerometer and press action buttons on the wheel which are input into the Touch via the connector....pretty slick...obviously that's just one idea

edit: also, toss in some wi-fi multi-player for extra fun

[ltcommander.data]

The iPhone/iPod Touch still has a ways to go to threaten the DS, but it's already coming up against the PSP.

http://www.scei.co.jp/corporate/release/090213e.html

Sony just announced in February that they had reached 50 million lifetime PSP sales and that is since December 2004. In less than 2 years, iPhone and iPod Touch had reached 37 million. 7 million added in the last quarter. I wouldn't be surprised if the iPhone/Touch platform overtakes the PSP within a year.

Of course, hardware wise the iPhone/Touch and PSP aren't directly competing, but there would definitely be overlap. iPhone 3rd gen will just bring things ever closer technically.

[dreyfus2]

... and in related news: Jim Goldman reports that Abramsky (RBC) has slightly adjusted AAPL target to 165 USD (from 70 and sell in the last quarter) after the earnings call Consider him touched.

[psychodoughboy]

Cute putting that Final Fantasy X (PS2 game) in the iPod Touch vs. DS image. The iPod Touch does not have the horsepower to run that game; nor does any other existing phone or handheld.

[solipsism]

Originally Posted by johnmcboston

I'm curious about the number of touches owned by iphone users. Maybe for other family members?

I have an iPhone, purchased two 8GB Touches for my niece and nephew last year, mainly for gaming. My brother, their father bought himself a 16GB version, but will go to the iPhone come this summer. His wife will probably get an iPhone too.

Originally Posted by tundraboy

I don't know if they foresaw it or not, but it was a stroke of genius on Apple's part to install the same OS on the iPhone and iPod touch. Nokia, MS, Google, RIMM & Palm may have something to put up against the iPhone in the smartphone space but they have nothing to compete with the iPod Touch. With two sources for apps demand, and their huge head start, it's getting harder and harder to see how anyone else's app store can catch up with Apple's. Maybe Nokia because of their dominance outside the U.S. But they really haven't shown any prowess in software.

And if there's still any doubt out there, we know where the PMP business is headed now and Zune is dead.

First off, I don't think the Zune is dead. It's a good product since their v2 firmware and it competes well within the non-iPod PMPs.

As for your first paragraph, I think Apple did foresee it. There are many reasons why people wouldn't want a cellphone as their PMP at this time. I think the Touch is great entry into the the OS category for those that are too young to have cell phones, under contract, can't use AT&T and/or just don't want the data fees right now but allowing you to move into an iPhone with your apps when you are ready.

For the other handset vendors to copy Apple's store they would have to create an ecosystem that would mean using a single sized display and starting off very simple. Without scraping their entire business model and only having a single device or two out of dozens trying to copy Apple it won't work. The App Store and the SDK as complex as they are would just be too complex if using multiple screen sizes and different input methods.

[Alphaman]

Originally Posted by hmurchison

+1

I was set to get a iPhone this year but decided that it wouldn't be good to have my gf on Sprint and me on ATT.

Similar -- I looked into getting iPhones for both my kids and myself, but rather than leave Verizon, I got my son a Touch. I just upgraded my car's head unit to dock an iPod and will get myself a Touch once they release a 64Gig version.

And we're all sticking with Verizon for phone service. I would not be surprised if this "anti-AT&T" effect was prominent amongst Touch users, as I know of several friends who have opted not to go to the dark side.

[Capnbob]

Originally Posted by DimMok

Viable perhaps until the game titles start to grow up.....

One can only take so much of Farting, Tic Tac Toe, X Ray, and the countless other crapware.....

SuperMonkey Ball was the start, but havent seen much after that.

Whats the problem?

I used to be of the same opinion but decided to download a few games in the $1-3 range and have found several to be quite brilliant - huge timesinks!! In particular Flightcontrol and iShoot are personal faves. I was also impressed by iDracula.
I might branch out into more expensive games soon (or wait til I get a more powerful device after June) but I can attest that casual gaming is pretty darn good on the iPhone/iTouch platform.

At 99c for many of them, it doesn't hurt to buy 10 and see what is any good.

[iVlad]

I always felt like DSi was for kids. When ever I look in the DS section of games its always some puppies and drawing stuff. I hope iPod Touch will gain momentum with really good games like Rolando etc. =)

[Cubert]

"We did not appreciate what role the [iPod] touch would play when Apple introduced it in September 2007," said Needham & Co. analyst Charles Wolf. "But it’s now clear that the touch has emerged as a viable game-playing platform."

I'm always amazed at how these supposed analysts don't have the forethought to realize how much of a game changer things like the App Store are. They are just now catching up to people like us who follow all things Apple.

(I realize that the quote above refers to the pre-App Store timeframe, but it is a good example of what I am saying)

[GTL215]

Originally Posted by iVlad

I always felt like DSi was for kids. When ever I look in the DS section of games its always some puppies and drawing stuff. I hope iPod Touch will gain momentum with really good games like Rolando etc. =)

to be fair, Nintendo has always focused on younger demographics.

[hmurchison]

Originally Posted by Alphaman

Similar -- I looked into getting iPhones for both my kids and myself, but rather than leave Verizon, I got my son a Touch. I just upgraded my car's head unit to dock an iPod and will get myself a Touch once they release a 64Gig version.

And we're all sticking with Verizon for phone service. I would not be surprised if this "anti-AT&T" effect was prominent amongst Touch users, as I know of several friends who have opted not to go to the dark side.

Yup...AT&T is a big barrier. Their service isn't bad here in WA but i'm locked into sprint until 2010 Q4. I may as well get a Touch and at least take advantage of the apps and then investigate the costs of migrating from Sprint to AT Terror.

Oh yeah will a iPod Touch be GPS enabled?

[Booga]

First off, I don't think the Zune is dead. It's a good product since their v2 firmware and it competes well within the non-iPod PMPs.

In order to "compete" you've got to compare the products on their own merits, not assuming that Microsoft is going to continue to shovel Office and Windows dollars into Zune development. That that business unit has lost billions of dollars since inception while Apple has earned billions of dollars at the same time shows how they compete, I think.

[melgross]

Originally Posted by DimMok

Viable perhaps until the game titles start to grow up.....

One can only take so much of Farting, Tic Tac Toe, X Ray, and the countless other crapware.....

SuperMonkey Ball was the start, but havent seen much after that.

Whats the problem?

You haven't looked. There's plenty.

[teckstud]

Originally Posted by GTL215

I'm waiting for techstud to somehow disparage the very apple products he claims to like.

Sorry for the wait- I had to eat lunch.
What do you mean? I am absolutely crazy about my iPod Touch and rate is as one of the best Apple products currently on the market - second only to the 17 inch matte MacBook Pro. I've always said -give everything the iPhone has without an AT&T phone and I'm in. I skipped the 1st gen and glad I waited.
And I'm proud that it's lived up to all my expectations and more; and is selling as I predicted 2 days ago.
It literally has driven Apple's quarter beyond expectations.

[solipsism]

Originally Posted by DimMok

Viable perhaps until the game titles start to grow up.....

As the titles grow up the iPhone/Touch takes an advantage.

Originally Posted by ltcommander.data

Of course, hardware wise the iPhone/Touch and PSP aren't directly competing, but there would definitely be overlap. iPhone 3rd gen will just bring things ever closer technically.

They aren't, but I think there will be plenty of people who will want a cellphone and/or an iPod and think "I can save money and get a more power gaming platform by getting an iPhone/Touch." As I've stated before, I think that Sony and Nintendo dropped the ball by not using their expertise to make their handheld gaming devices decent PMPs, too.

Originally Posted by psychodoughboy

Cute putting that Final Fantasy X (PS2 game) in the iPod Touch vs. DS image. The iPod Touch does not have the horsepower to run that game; nor does any other existing phone or handheld.

I have no idea how the <300MHz Emotion Engine used in the PS2 relates to the ARM CPU and GPU in the current Touch, but that CPU is a decade old and the next Touch will probably be able to push 720p video. If they can't play some PS2 games well now I don't think it will be too many HW revisions before they will be. But would Sony even allow their games to be ported to iPhone OS X and sold in the App Store. I don't think so, at least not a long time.

• http://en.wikipedia.org/wiki/PlaySta...specifications

[teckstud]

Originally Posted by hmurchison

Yup...AT&T is a big barrier. Their service isn't bad here in WA but i'm locked into sprint until 2010 Q4. I may as well get a Touch and at least take advantage of the apps and then investigate the costs of migrating from Sprint to AT Terror.

Oh yeah will a iPod Touch be GPS enabled?

Get a Touch- it's unbelievable! I pick up free WiFi signals everwhere in NYC.
Verizon user here.

[camroidv27]

Originally Posted by teckstud

Sorry for the wait- I had to eat lunch.
What do you mean? I am absolutely crazy about my iPod Touch and rate is as one of the best Apple products currently on the market - second only to the 17 inch matte MacBook Pro. I've always said -give everything the iPhone has without an AT&T phone and I'm in. I skipped the 1st gen and glad I waited.
And I'm proud that it's lived up to all my expectations and more; and is selling as I predicted 2 days ago.
It literally has driven Apple's quarter beyond expectations.

My favorite App- AirMouse.

For me, the iPod Touch is the only Apple product I will consider purchasing. A very nicely done piece of hardware. I really hope they do unlock bluetooth in 3.0. I think the iPod Touch has sold well to those who wanted the iPhone, but won't switch to AT&T. I for one am in that category. Unlock bluetooth, and you have a killer little machine given you can tether it to your existing cell phone... think of the possibilities!

[gundamzro]

Originally Posted by iReality85

I believe this is a slightly skewed comparison, given that the iPhone/iPod Touch and Nintendo DS are aimed at catering towards principally different market segments. The tone of this article suggests that the boon in Apple's sales are due to consumers being strictly interested in gaming. iPhone users buy the iPhone because it is a phone, first and foremost. I'm willing to wager that iPod Touch owners bought the device for its music playing abilities, not gaming (although the fact that you can game on it is a plus). Nintendo DS owners own one for the reason that it is a dedicated gaming machine. This article is comparing the sales of apples (no pun intended) to sales of oranges.

A more accurate reading would be for Apple to query those 1st quarter customers and ask them for what purpose did they purchase an iPod Touch. The numbers presented in this article are meaningless without knowing the customers' intent on using the device.

its not an unfair comparison. the new ds has features other than just gaming. taking pictures, recording ect, ect, one could make the argument that it is going the way the ipod and incorporating functions that are not solely based on gaming. it goes without mentioning that the ipod touch has a multitude of non gaming apps. calculator, internet, calendar ect, ect,

[Johnny Mozzarella]

Originally Posted by hmurchison

Yup...AT&T is a big barrier. Their service isn't bad here in WA but i'm locked into sprint until 2010 Q4. I may as well get a Touch and at least take advantage of the apps and then investigate the costs of migrating from Sprint to AT Terror.

Oh yeah will a iPod Touch be GPS enabled?

I'm pretty sure the next iPod Touch will have GPS and a camera.

These components would add a few dollars to the cost of the device but Apple would more than likely make it back on the increased sales of apps that use the GPS and camera.

[dreyfus2]

Originally Posted by GTL215

to be fair, Nintendo has always focused on younger demographics.

I hate it when people poke fun at my corporate gameboy

[teckstud]

Even AI is giving to much emphasis of the game APPs (as great as they are) but really it is the Touch itself. It is a major improvement over the 1st gen and has great word of mouth. From its improved screen to its proportions- it is amazing. Apple hit this one way out of the ballpark.

[DimMok]

Originally Posted by melgross

You haven't looked. There's plenty.

Name one......And Im talking groundbreaking, great graphics/sound.....like Super Monkey.
I seriously would love to purchase these types of games for my daughters for my Iphone.

I sold there old DS's....was thinking of the new DSI...but will wait for the new touches..hopefully with a camera built in. That would be sweet. That seems to be the feature they really want. For some reason....

[teckstud]

Originally Posted by camroidv27

For me, the iPod Touch is the only Apple product I will consider purchasing. A very nicely done piece of hardware. I really hope they do unlock bluetooth in 3.0. I think the iPod Touch has sold well to those who wanted the iPhone, but won't switch to AT&T. I for one am in that category. Unlock bluetooth, and you have a killer little machine given you can tether it to your existing cell phone... think of the possibilities!

If it wasn't for my Touch (w remote APP) I probably would have thrown my ATV out the window by now.
BTW- the AirMouse APP is like having a bluetooth mouse and trackpad (except over WiFI of course).

[Maestro64]

What apple does, that most companies do not do, they do not come out ahead of time and tell the market how they going to crush the competition and how their business model is better than everyone elses.

They just do it, do not talk about they put thing in place a head of time to lay the ground work for future product and test the waters to too how it should be done.

Think about this widgets, you do not hear much about them, but apple put this in place years before the iphone and the app store this was the model to set the whole concept of small app that can be used on a phone.

Another example is itune, the software for organizing your songs came first then came the Ipod, then a music store...

Look at a bunch of things apple is doing and think about how those ideas can be extended. The next thing it apple TV there are still testing those waters and learning, once the figure it out you will see them going after the set top box market next.

Apple has a long term roadmaps of a whole line of products and service and they realize whar needs to be there first and what enables what.

[solipsism]

Originally Posted by gundamzro

its not an unfair comparison. the new ds has features other than just gaming. taking pictures, recording ect, ect, one could make the argument that it is going the way the ipod and incorporating functions that are not solely based on gaming. it goes without mentioning that the ipod touch has a multitude of non gaming apps. calculator, internet, calendar ect, ect,

The problem is that they are late to the party with both rich PMP functions and with OTA digital gaming DLs with the new DSi. But Nintendo is, I believe, the largest company in Japan have weathered drops in sales and user interest many times before so I don't doubt that they will be able to enter the race and excel at some time in the future.

[kim kap sol]

Originally Posted by DimMok

Name one......

Zen Bound, Edge, Rolando, iVampire, to name four.

Fantastic graphics and sound.

[melgross]

Originally Posted by gundamzro

its not an unfair comparison. the new ds has features other than just gaming. taking pictures, recording ect, ect, one could make the argument that it is going the way the ipod and incorporating functions that are not solely based on gaming. it goes without mentioning that the ipod touch has a multitude of non gaming apps. calculator, internet, calendar ect, ect,

One problem that Nintendo has is price. This is still a game machine mostly aimed at those below 15. Actually, below 12.

Because of that, they have to be careful in adding features that parents might find objectionable. I read that the camera was one thing that Nintendo agonized over because of the possible "sexting" scandals going on right now.

In addition, some features cost too much to add to a low priced device right now. Possibly two years from now. If the iPhone/iTouch had little memory, as the DS has, their prices would be much lower as well. That large internal memory is one thing that makes these devices such good game machines. My daughter used to carry around this pouch with her little game cartridges for the DS. With her iPhone, they're all in the phone. Much better.

The DS is also much more cheaply built, as kids lose and break them.

So far, the markets are very different. But as I've seen iPhone usage in my daughter's HS school over the past two years explode, and I'm seeing more of them in younger kids hands now that the price is $199, I do expect the devices to take over more of Nintendo's territory.

I think that as the phone/PDA killed the PDA market, the phone/game machine will kill the handheld game machine market. It actually costs less to have the one unit, considering that almost everyone will end up with phone plans that include data and texting.

The iTouch is in an interesting position here in the US.

As we see here, it's possible that a lot of the sales are to people who don't want to change carriers. What will happen when those people can buy an unlocked iPhone and put it on Verizon's AT&T compatible network sometime in 2010? Or better yet, can buy one from Verizon?

Both AT&T and Apple are stating that they are happy with their current deal, but that could be just for show. Behind the scenes, there's likely much frantic negotiating going on.

[teckstud]

Originally Posted by Maestro64

Another example is itune, the software for organizing your songs came first then came the Ipod, then a music store...
.

Sorry but iTunes is a derivative of SoundJam- not created by Apple but bought by Apple.
Same thing with CoverFlow. However, Apple has integrated all these things seamlessly.

[teckstud]

from the newspaper today-

"Apple has removed from it's collection of for sale iPod applications a program that simulates infanticide.

The 99 cents 'Baby Shaker' initially got past Apple's, apparently loose screening process and was downloaded by an unknown number of customers before the Mac maker pulled the "game."

The Sikalosoft brand application presents the user with a Gerberesque infant who immediately begins to wail. Shake the iPod and the baby eventually goes silent as a red 'X' adorns each eye, indicating the infant has died.

Sikalosoft pushed the game as a way for users annoyed by real-life bawling babies to virtually put an end to the noise -- permanently.

"Babies are everywhere you don't want them to be! They're always distracting you from preparing for that big presentation at work with their incessant crying. Before Baby Shaker there was nothing you could do about it," Sikalosoft's promotional materials said."

[Virgil-TB2]

Originally Posted by psychodoughboy

Cute putting that Final Fantasy X (PS2 game) in the iPod Touch vs. DS image. The iPod Touch does not have the horsepower to run that game; nor does any other existing phone or handheld.

I'm not sure you are right about that.

There are PS2 games that have been ported to the iPod touch that seem identical to me in terms of graphics and performance. I don't see why Final Fantasy X would be any different. In any case the new version (due out within a month or two), seems like it will be orders of magnitude faster and more capable, so the point would become moot very soon.