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Apple's iPod Touch losing out to iPod Nano at checkout lines

post #1 of 93
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After surveying 90 Apple stores and 18 Best Buy locations over the Thanksgiving weekend, analysts for ThinkEquity Partners LLC concluded that despite a high level of interest in the new iPod Touch among shoppers, the more affordable iPod Nano remains the clear winner at the cash register.

iPod sales

"Our channel checks indicate that of all the iPods, the Touch piqued the most interest from customers," analyst Darren Aftahi wrote in a research report to clients this week. "However, our conversations do not lead us to the conclusion that "level of interest" translated into consumer purchases of iPod Touch."

From interactions with sales representatives and store managers, Aftahi and his team determined that even though 8GB iPod Touch ($299) generated lots of interest among holiday shoppers, when it came to purchases, they instead decided on the 8GB iPod Nano given its smaller size and lower price ($199).

"Also, a lot of consumers seemed to opt for iPhones over iPod Touch because iPhones facilitate all that iPod can do (and more), but the opposite is not true," the analyst further advised clients. "Older individuals preferred iPod Touch because of its interface and Wi-Fi capability, while iPod Nano was more favored by younger individuals (children and teens)."

iPhone sales

Based on his checks, Aftahi believes that iPhones are selling well, perhaps well enough to best his 3.2 million quarterly estimate come the close of Apple's first fiscal quarter of 2008 in late December.

However, he noted that feedback concluded that shoppers who are not currently AT&T customers are generally choosing an the iPod Touch over an iPhone -- satisfied with its WiFi capability -- to avoid early-termination carrier fees form their existing cellular providers.

"Our checks also confirmed our view that an individual buying an iPhone would not purchase iPod Touch and vice versa," he wrote. "It may be noted that the comparison between iPhones and iPods is essentially a comparison between iPhone and iPod Touch, given their similarity in appearance."



Mac sales

Meanwhile, MacBooks were the clear winner of Apple's personal computer business during the Thanksgiving weekend, according to ThinkEquity's data and channel checks.

"MacBooks were perceived to have generated greater interest (and purchases) than iMacs among consumers this past weekend, and we believe this will continue throughout the holiday season," Aftahi told clients. "It is worth noting that MacBooks are more popular among the college population, while iMacs are favored by families, a point reinforced through our checks."



The analyst reiterated his Buy rating and $227 on shares of the Cupertino-based Apple.

"Consumer sentiment seems to favor Apple this holiday season," he wrote. "The stores that we visited exhibited high customer inflow rates, and the people who entered the store spent a considerable time there."
post #2 of 93
The iPod Touch was never a very wise move, but Apple does not always have a hit on its hands.
post #3 of 93
Quote:
Originally Posted by AppleInsider View Post

After surveying 90 Apple stores and 18 Best Buy locations over the Thanksgiving weekend, analysts for ThinkEquity Partners LLC concluded that despite a high level of interest in the new iPod Touch among shoppers, the more affordable iPod Nano remains the clear winning at the cash register.


I bought an iPod Touch (actually 2 Touches!) when I was in Japan last week
- saved about £70 each over the uk price.


- it's really nice - I don't want the iPhone yet (no 3G, 2Mpixel camera, no video camera, no 16GByte version, long expensive service contract etc) - I think I'll stick with my Nokia N95 for a phone for now, and use my Touch for entertainment.

- the nano is ok, but the Touch is definitely worth the extra money, IMHO.


I am looking forward to seeing some more interesting apps running on it after the SDK arrives.
post #4 of 93
Quote:
Originally Posted by AppleInsider View Post

From interactions with sales representatives and store managers, Aftahi and his team determined that even though 8GB iPod Touch ($299) generated lots of interest among holiday shoppers, when it came to purchases, they instead decided on the 8GB iPod Nano given its smaller size and lower price ($199).

"Also, a lot of consumers seemed to opt for iPhones over iPod Touch because iPhones facilitate all that iPod can do (and more), but the opposite is not true," the analyst further advised clients.

Unsurprising. I feel exactly the same way. The Touch is nice, but there's no point to it when placed beside the iPhone. If you just want an iPod, the Nano is a great little player and the Classic has a lot of space. The Touch is the only one without a clear purpose.
post #5 of 93
You can be sure that Apple expects the Nano to outsell all other players especially this time of year. There are a few variables worth considering. First, during the holiday season people are usually shopping for others. Studies have shown people will buy less expensive options when shopping for others. So, it makes sense during this time of the year people will be gravitating towards Nanos and Shuffles. This has happened ever since Apple has had all three products. Second, after the holidays people usually have spending money to spend on themselves. They usually will spend more on themselves then on others if they have the money to do so. Third, the iPod Touch is a great product, but for many people looking for a high end player the iPod Classic still makes more sense. For instance, the iPod Touch hardly has any storage space when compared to a Classic. You can bet that is why Apple hasn't killed off the Classic. Eventually Flash storage prices will drop and capacity will grow. When that happens, Apple will likely kill off the Classic and sales of the Touch will grow. Finally, there are many organizations throughout the Country giving away iPods as incentives. Most of these entities use the iPod Nano because of the price point. For instance, I have received free an iPod Mini from Citibank and a Nano from Key Bank for opening up accounts. I suspect this has a huge impact on what iPods sell.
post #6 of 93
"Our checks also confirmed our view that an individual buying an iPhone would not purchase iPod Touch and vice versa,"


Well duh! Thank you Mr analist (misspelling intentional) for pointing out this very subtle fact. I would have missed it completely if not for your deeply insightful analysis.


Sarcasm aside, I bought an iPod classic on black thursday. Would have bought the iPod Touch if it had 80 gigs rather than 16.
post #7 of 93
Quote:
Originally Posted by AppleInsider View Post

"
iPhone sales

Based on his checks, Aftahi believes that iPhones are selling well, perhaps well enough to best his 3.2 million quarterly estimate come the close of Apple's first fiscal quarter of 2008 in late December.

][/url][/c]

Believes? What are the numbers for of the best iPod available- the iPhone? How can he not know the numbers for them. They must be flat.
post #8 of 93
I was one of those people. I expected to buy an iPod Touch, but after fiddling with it, my sensibility came out and I had to ask myself why I needed all of that technology.

Yes it would definitely come in handy waiting in an airport or doctor's office, but how often would I do that? Plus how would I control the volume or skip to the next track while I'm riding my bike or driving without having to look at it?

There were too many negatives and few positives, so I went with the Nano, which can do almost everything I need, including watching videos.
post #9 of 93
Quote:
Originally Posted by CREB View Post

The iPod Touch was never a very wise move, but Apple does not always have a hit on its hands.

huh? The iPod Touch is necessary. It's okay that it's not outselling the nanos-- having it in the lineup and available to those that want the "latest greatest" thing is a required part of Apple's lineup. In addition, all those people who wanted an iPhone but didn't want a phone.

Anyway, the touch is the one I want!
post #10 of 93
Quote:
From interactions with sales representatives and store managers, Aftahi and his team determined that even though 8GB iPod Touch ($299) generated lots of interest among holiday shoppers, when it came to purchases, they instead decided on the 8GB iPod Nano given its smaller size and lower price ($199).

If I'm already spending $200 on an iPod I'd pluck down $100 more just for all the extra "coolness" the Touch brings and all it's added features over the Nano. $100 more for all that is a steal. But then if it comes down to you just can't afford it... then you're obviously not going for the higher-ticket item.
post #11 of 93
The iPod Touch has a purpose. It represents the future of the iPod line. However, flash memory capacity must rise and prices must fall before the player becomes more attractive to the masses. That is how it always works. When that happens most people seeking a high end player will prefer the iPod Touch.

Quote:
Originally Posted by Denton View Post

Unsurprising. I feel exactly the same way. The Touch is nice, but there's no point to it when placed beside the iPhone. If you just want an iPod, the Nano is a great little player and the Classic has a lot of space. The Touch is the only one without a clear purpose.
post #12 of 93
Quote:
Originally Posted by Denton View Post

Unsurprising. I feel exactly the same way. The Touch is nice, but there's no point to it when placed beside the iPhone. If you just want an iPod, the Nano is a great little player and the Classic has a lot of space. The Touch is the only one without a clear purpose.

Of course there is a difference, there isn't a minimum $60/month recurring fee on the touch.
post #13 of 93
Well I for one was in the opposite category.
Immediately after announcement, I bought a new Nano, and took it back for a touch.

The click-wheel was too small and I continually misfired on the center-click. (I had a 1st gen Nano for 2 years and still think its a better form-factor.)
The new interface introduced clutter I didn't need on that small of a screen. And there was no way that I was going to watch video content on that small of a screen, with a 4:3 ratio to boot.

I realized that I wanted
1) a nice size screen
2) touch interface
3) 16 gigs was a nice size for my needs
4) its expandability

I do wish it had a camera, but oh well.

Comparing it to the iPhone I like the slimmer form factor. iPhone almost seems clunky to me now when I hold one.

I anticipate a lot of enhancements to the touch over the next 2 years, at which time I'll reconsider whatever iPhone is current at that time.

I think the touch is a great product.
post #14 of 93
Quote:
Originally Posted by TerrinB View Post

The iPod Touch has a purpose. It represents the future of the iPod line. However, flash memory capacity must rise and prices must fall before the player becomes more attractive to the masses. That is how it always works. When that happens most people seeking a high end player will prefer the iPod Touch.

You know how Apple can make the iPod Touch attractive to me without relying on the price of flash memory?

Put a hard drive in it. Yeah, I said a hard drive. I know I'm not the only person out there who wants the Touch interface mated to the capacity of the Classic. I am still savoring the taste of disappointment with the last product line overhaul, because I was betting on having exactly that: touch + scads of storage. Until the company offers that, I'm out of the market for iPods.
post #15 of 93
Quote:
Originally Posted by Booga View Post

huh? The iPod Touch is necessary. It's okay that it's not outselling the nanos-- having it in the lineup and available to those that want the "latest greatest" thing is a required part of Apple's lineup. In addition, all those people who wanted an iPhone but didn't want a phone.

Anyway, the touch is the one I want!

The iPod Touch will also get better and probably cheaper. I'm waiting for rev 2. (does need more ram.)
post #16 of 93
Quote:
Originally Posted by Denton View Post

Unsurprising. I feel exactly the same way. The Touch is nice, but there's no point to it when placed beside the iPhone. If you just want an iPod, the Nano is a great little player and the Classic has a lot of space. The Touch is the only one without a clear purpose.

This is only true because of the paltry storage space on the Touch. Give it 40 or 60 Gigs and you'd see them fly off the shelves.

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post #17 of 93
Quote:
Originally Posted by CREB View Post

The iPod Touch was never a very wise move, but Apple does not always have a hit on its hands.

Huh? Does it have to outsell a lower cost iPod to be a hit? With so many people waiting for a 3G iPhone or that don't want to switch carriers or like/need WndowsCE/Mobile/Blackberry/other mobile the iPod Touch is a perfect alternative that offers WiFi internet using Safari and a neat Video iPod running OS X.
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post #18 of 93
Quote:
Originally Posted by CREB View Post

The iPod Touch was never a very wise move, but Apple does not always have a hit on its hands.

AT&T service is poor in my Midwest location, I ditched it long before the iPhone came out and went with Verizon, so an iPhone has no value for me.

To me, the iPhone is a cool phone with a great touch interface, and a small solid-state iPod, but comes with a very high cost of use, and slow data transfer. The battery and capacity certainly isn't up to my usage needs for watching videos.

The Touch is a higher capacity solid-state iPod that also has the great interface and larger screen of the iPhone, and does WiFi really well to boot so I can get to the web and all its resources nearly everywhere. I can have almost all of what I want in a personal music/photo-video/web viewer for under $400 and be done with it. The iPhone with its required service plans never gets paid for. After a year, the thing would have cost me well over a $1000, only have half the capacity, be slower to use for the web on the go, and the poor AT&T connections would still force me to have another phone if I wanted to reliably talk to someone.

If people aren't buying the Touch, it's because the product they are shopping for was meant as a gift and costs too much, or they haven't actually held one and seen what it can do. They probably already have a crappy $49 phone and contract that handles calls and texting, and maybe a crappy MP3 player, and really only want a quality music/video player with a price under $200.

The only changes that would make me happier with my Touch is if they could give it much greater solid state storage, and move the damn earphone jack to the top or side where it won't prevent sitting it upright on a tabletop.
post #19 of 93
Quote:
Originally Posted by SpamSandwich View Post

This is only true because of the paltry storage space on the Touch. Give it 40 or 60 Gigs and you'd see them fly off the shelves.

And if/when they have that capacity for Touch they have it for the iPhone too ... that would be cool, especially if 3G version with GPS
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Been using Apple since Apple ][ - Long on AAPL so biased
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post #20 of 93
You can probably say the same thing of the Classic too. The mini, then the nano, was said to be Apple's top seller. So any other Apple product probably won't give comparable sales. That does not make the iTouch a mistake by any stretch. It's probably the $150 (USD) model that's selling the most too, the iTouch is twice that price.
post #21 of 93
Quote:
Originally Posted by jimhill View Post

You know how Apple can make the iPod Touch attractive to me without relying on the price of flash memory?

Put a hard drive in it. Yeah, I said a hard drive. I know I'm not the only person out there who wants the Touch interface mated to the capacity of the Classic. I am still savoring the taste of disappointment with the last product line overhaul, because I was betting on having exactly that: touch + scads of storage. Until the company offers that, I'm out of the market for iPods.

I agree with you - if there'd been a HDD version I'd have gone with that
- I thought about waiting to see if they did one
- but, I came to the conclusion that they'll probably never do a HDD version, as it wouldn't be a simple upgrade for the hardware or software, and with a limited market

- and, in the end, I thought the 16GB was probably adequate for what I needed, given that I'm not going to store hundered of movies on it at the same time.

- but I'll don't mind being proved wrong about the HDD - but it seems Apple are on a 12 month refresh cycle on the iPods, so you'll have to wait a year to find out.
post #22 of 93
This is non-news.

An un-story.

Nano has always outsold the more expensive iPods, since Nano was introduced. And Mini before that.

And basing an article on the musings of an analyst that doesn't know the products he's talking about ("iPhone can do all an iPod can do..." ah, except hold 16 GB of content) only makes it worse.
post #23 of 93
I like seeing some numbers, but I could've written this story without leaving my office.

First, the NEW Nano is nice. The old one was a shuffle with a screen. The new one does a lot, and is small, and makes you wonder why ever buy a shuffle. So the old was was hurt by the Shuffle and the new one will not be. So it's sales will be up.

That being said....

Second, the Touch is a BIG hit if it sells half the number of Nano's being sold.

I don't need anyone hanging around a Mall checking to see if Nano sales are up and ahead of Touch sales. The Touch is a HUGE success, and so the Nano is doing what is supposed to do. (fight back against the cheaper Shuffle)

Of and one more thing...... anyone out there surprised the Macbook is selling best?
That's only been a trend for .... as long as we can remember?

How about an article about something of interest? You know.... something we didn't know?
post #24 of 93
Quote:
Originally Posted by TerrinB View Post

..... during the holiday season people are usually shopping for others. Studies have shown people will buy less expensive options when shopping for others.

I was going to bring up this very point. Nanos also out sold full sized iPods last year.
post #25 of 93
Quote:
Originally Posted by tundraboy View Post

"Our checks also confirmed our view that an individual buying an iPhone would not purchase iPod Touch and vice versa,"


Well duh! Thank you Mr analist (misspelling intentional) for pointing out this very subtle fact. I would have missed it completely if not for your deeply insightful analysis.

That's quite a clever spelling. Did you choose it because the correct spelling of analyst doesn't have "anal" in it like your version does? Or maybe you just don't like the letter y?
post #26 of 93
Quote:
Originally Posted by Booga View Post

huh? The iPod Touch is necessary. It's okay that it's not outselling the nanos-- having it in the lineup and available to those that want the "latest greatest" thing is a required part of Apple's lineup. In addition, all those people who wanted an iPhone but didn't want a phone.

It's probably pretty smart - basically you have a bunch of Verizon customers buying touches, and ATT customers buying iPhones. Then when the Verizon contract expires, the person knows exactly what they want to replace their two devices with...
post #27 of 93
Quote:
Originally Posted by AppleInsider View Post

... despite a high level of interest in the new iPod Touch among shoppers, the more affordable iPod Nano remains the clear winning at the cash register."

This isn't surprising. In addition to costing $100 more (a very big deal when you're buying gifts), the Touch doesn't offer much in the way of added functionality.

By eliminating the click-wheel, many aspects of the UI (like one-handed operation) becomes very difficult, if not impossible. Of the features not shared with the nano, only Wi-Fi web surfing is substantial enough to be worth the price.

When the SDK comes out in February, and we start seeing third-party apps, I think that will change. Once it becomes possible to download a standard-PDA suite of apps (memo pad, full-featured address book and calendars, to-do list, etc.) I think you'll find a lot of people buying Touches, for use primarily as a Wi-Fi enabled PDA. I count myself among them (even with PDA software, I'll probably continue using my nano as my primary music player - the click wheel really is that much of a big deal for me.)

(BTW, if anyone from Mark-Space is reading this, the above paragraph is a strong hint for something that would be the perfect companion to The Missing Sync.)
post #28 of 93
Quote:
Originally Posted by shamino View Post

Of the features not shared with the nano, only Wi-Fi web surfing is substantial enough to be worth the price.

And a significantly larger screen.
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post #29 of 93
When I worked at the Apple store Willow Bend, I noticed Christmas buyers always buying the lower cost iPods as gifts. This happens every Christmas season. Gift buyers are often cheap bastards. They never buy AppleCare or any other add-on.
post #30 of 93
[QUOTE=shamino;1178641]
Quote:
Originally Posted by AppleInsider View Post

By eliminating the click-wheel, many aspects of the UI (like one-handed operation) becomes very difficult, if not impossible. Of the features not shared with the nano, only Wi-Fi web surfing is substantial enough to be worth the price.

Um... doesn't the sex appeal count for anything? It is, after all, a big reason why any iPod sells at all over the competition. I can certainly tell you from my direct experience that when people touch that screen, they want it.
post #31 of 93
Quote:
Originally Posted by cameronj View Post

Um... doesn't the sex appeal count for anything? It is, after all, a big reason why any iPod sells at all over the competition. I can certainly tell you from my direct experience that when people touch that screen, they want it.

It may be "A" reason for many and a big reason for some, but I believe that the majority of people prefer the iPod because it's simple to use.
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post #32 of 93
Quote:
Originally Posted by jimhill View Post

You know how Apple can make the iPod Touch attractive to me without relying on the price of flash memory?

Put a hard drive in it. Yeah, I said a hard drive. I know I'm not the only person out there who wants the Touch interface mated to the capacity of the Classic. I am still savoring the taste of disappointment with the last product line overhaul, because I was betting on having exactly that: touch + scads of storage. Until the company offers that, I'm out of the market for iPods.

But that would cannabilize Classic sales.
post #33 of 93
Wow, as other's have said, they reported the blatantly obvious differences in Apple's product line and it's pricing.

What scares me is that they apparently thought "perception of sales staff" is an accurate means of measure!?!

And then somebody was stupid enough to pay them to do this.
post #34 of 93
If they do a 60GB iPod Touch with HD, then I might just be tempted. I am the sort of person who enjoys having my whole music collection on the go and in a lossless format. Heck, at that point the lines between iPod and PDA suddently start to gray.

As to a cheaper device selling out a more expensive device, well I'm hardly surprised. Also, if people step up to the iPhone, then this too is a good thing.
post #35 of 93
Apple's goal this Christmas is to place millions of video players, mainly nanos, into the hands of consumers. That will form the base for Apple's next big push in video downloads - both rentals and sales - and drive TV and movie studios (back, for some) to iTunes.

The goal of the iPod touch is to make the touch screen iPod capability available worldwide, since it will take iPhone at least another year to go into many markets. It's main target is not the US. However, in the US, the goal of the iPod touch is to make the new Zune look a generation behind.
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post #36 of 93


Why wouldn't the Nano be the most popular? It hits the consumer sweet spot, and it's the cheapest iPod you can buy with a screen.

If the Touch was being outsold by the Classic, OTOH, that'd say something. If Apple.com sales are any indication, though, it's not.
post #37 of 93
Quote:
Put a hard drive in it. Yeah, I said a hard drive. I know I'm not the only person out there who wants the Touch interface mated to the capacity of the Classic. I am still savoring the taste of disappointment with the last product line overhaul, because I was betting on having exactly that: touch + scads of storage. Until the company offers that, I'm out of the market for iPods.

An HDD defeats the directions the Touch is going in. I'm sure Apple won't miss one sale out of 40 million.
post #38 of 93
Quote:
Originally Posted by shamino View Post

By eliminating the click-wheel, many aspects of the UI (like one-handed operation) becomes very difficult, if not impossible. Of the features not shared with the nano, only Wi-Fi web surfing is substantial enough to be worth the price.

Have you ever tried to use the iPod touch? I have a 16 gb one, and I have to say, operating it with one hand is simple and extremely easy. In fact, the touch screen makes everything easier, not more difficult.

Some features that are either not on the Nano, or are much better:
Calendar
Contacts
Wi-Fi web browsing
Widescreen (huge screen) videos
CoverFlow

For me, being able to manage events and contacts easily on my iPod (which is the only electronic device I carry with me) is great. Besides, have you noticed the huge screen?
post #39 of 93
Quote:
Originally Posted by jimhill View Post

You know how Apple can make the iPod Touch attractive to me without relying on the price of flash memory?

Put a hard drive in it. Yeah, I said a hard drive. I know I'm not the only person out there who wants the Touch interface mated to the capacity of the Classic. I am still savoring the taste of disappointment with the last product line overhaul, because I was betting on having exactly that: touch + scads of storage. Until the company offers that, I'm out of the market for iPods.

I don't think that would work. I read somewhere that there would be latency issues with a hard drive based iPod Touch with all the GUI animations it incorporates. A bit of it is already apparent with cover flow in the Classic.
post #40 of 93
Quote:
Originally Posted by Quark108 View Post

I don't think that would work. I read somewhere that there would be latency issues with a hard drive based iPod Touch with all the GUI animations it incorporates. A bit of it is already apparent with cover flow in the Classic.

Not to mention that having a large touchscreen interface and a spinning HDD would require an even larger battery to maintain the same usage time. Now we have a much thicker device that weighs more because of the increase in storage and battery sizes. Not ideal.
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