Apple's iPod touch sales double, nearly on par with iPhone
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.
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.
Comments
On the other hand, maybe it homogenity is its strength.
And if there's still any doubt out there, we know where the PMP business is headed now and Zune is dead.
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.
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?
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 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.
edit: also, toss in some wi-fi multi-player for extra fun
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.
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.
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.
+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.
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.
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)
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.
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?