iPod Touch: Is It an iPod or iPhone?

Analysts generally weren’t too impressed with Steve Jobs’ announcements about new iPod features and lower prices last week in San Francisco. But in light of the new iPhone 3G released in July with a lot of hype and a lower price, the new $229+ price tag on the iPod Touch was an interesting move.

Is Apple (AAPL) trying to make the Touch appeal to people who want an iPhone but are bound to their carriers? Maybe. Consumer behavior seems to be saying that the Touch is a device more for iPhone fans than people who are only thinking about options in the iPod family.

The chart below looks at traffic to the Touch, iPod Nano, and iPhone portions of the Apple site.

• Interest in the iPod Touch was generally low, but probably got some momentum from the iPhone in July and August, surpassing traffic to the iPod Nano during both months.
• Interest in the iPhone has been higher than the iPod Nano or the Touch since February, with especially strong months when the 3G was announced and launched.
• Interest in the iPod Nano was strong throughout Q4 2007, and peaked in December, suggesting it may have been the most likely of the three devices to be considered as a gift.

Not only does the iPhone’s momentum seem to have increased interest in the iPod Touch, but those who have been interested in Touch are more likely to look into an iPhone.

• iPod Touch researchers have been researching the iPhone an average of ~10% more frequently than they research the iPod Nano, even during the holiday season.
• Cross-consideration seems to mirror the iPhone’s momentum in June and July 2008.

Will the momentum in iPhone interest and last week’s price cut lift the iPod Touch when it comes to sales from now until the end of the year?

Despite the iPhone’s popularity, consumers in the current economic climate may not be willing to shell out between $229 and $399 for an iPod Touch if they have the option of giving a Nano for $149-199. Then again, interest and momentum in the Touch could increase as the iPhone and other high-end mobile devices like it are sold at big box consumer electronics stores. In combination with the price drop on the iPod Touch, wide availability of the iPhone could open a new and bigger market for the Touch as a music and media player to grab market share from the Zune and the PSP.

Apple’s announcement last week might be bigger news than we think.

Comments

[brewer:]

I think page loads are not a very good proxy for product interest. iPod Touch is more like the iPhone than like other iPods. iPod touch is a key product because it helps spur app sales, which the 'analysts' then attribute to the iPhone.

Everyone seems to think the iPod growth has flattended out, but the iPhone is also an iPod, and yet sales are STILL growing.

You can even make calls on the iPod Touch fairly easily. Just have to add a mic, jailbreak it, and run an internet telephony application. There is no cell network, of course, but you can make calls with it from WIFI.

I think it will be much more popular this holiday season than most people realize. It's far more versatile than the portable game devices from Sony or Nintendo.

2008 Sep 18 03:39 PM

[Murphy Mac:]

I have a touch because I'm under contract until the spring. I'll be getting an iPhone when the contract is up.
Both are an incredible leap forward for handheld devices. My only problem with the touch is that wifi in Charlotte NC isn't as widespread as one might hope.

I don't know why so many people, "expert" pundits included, expected the touch price to drop below that of the iPhone. No subsidy! When you hold this device in your hand, when you see how slick the touch interface is, you know it costs some serious money to manufacture. I've seen other "touch screen" phones - they don't even come close in usability. The iPhone and touch are miles ahead, I just don't know how long Apple can maintain the lead.

I look forward to Apple taking advantage of all the flexibility this platform offers. The Remote app makes my other Apple toys (Apple TV and an Airport Express connected to my stereo) that much more useful. I've been wondering what took so long for a wifi remote to materialize. I know there are a few out there. But this one can't be beat for simplicity and potential upgrades. I can navigate the Apple TV interface without turning the TV on -- which is great for music.

The new touch addressed issues I have with my first gen. Hardware volume controls were added. And a speaker - although it's probably not the best speaker. The lack of direct volume control on the first gen iPod touch might have bothered some hardcore iPod users. Problem solved.

This comment is all over the place. But here's what I would take away from considering the questions raised in the story: Apple has multiple pieces in place that work well together to make accessing your digital media more like a living room experience should be. Apple TV, Airport Express with Air Tunes, and touch or iPhone as a remote. It's a slick and reasonably affordable system when compared to other pieces you might shop around for. And it works with the computer (Mac or PC) that you have now.

Apple should showcase the Remote app in some ads going into Christmas. It might boost Apple TV sales.

2008 Sep 18 03:49 PM

[bigmoney:]

I was in the market for an ultra-portable, and decided on an Asus eee PC. Granted, its not quite the same solution as an iPod Touch, because its two pounds. But its very tote-able to a coffee shop, has 6 hours of battery, a solid state drive, and blue tooth, for those with a smartphone / data plane. My version is Linux, so I have a train-load of free software I can use, and am not confined to "Apple Store". Right now, mine is on my desktop, running an SSH & VNC server, so I can operate it entirely from my desktop, and get data in & out with a 19" LCD and full sized keyboard.

2008 Sep 18 03:53 PM

[Murphy Mac:]

bigmoney- I don't see the ultra-portable as competition for iphone/touch. Do you? If I could do things like read CF cards and connect a BT keyboard to my touch maybe I could leave a laptop behind on certain trips. And coffee outings. As it stands I can't.

I really hope Apple has something well underway that bridges the gap between your machine and an iPhone. For all the talk about the iPhone being a computer --- it's a crippled computer at this point. All the potential in the world is there, but it needs to be let out!

As for linux ---- I've tinkered with a couple distributions on some really crappy hardware. From what I saw it isn't ready for anyone who doesn't like to tinker. At least I didn't see a version that is. I'm not saying there isn't one out there. But my take is that something needs to change if they're going to gobble up any consumer market share.

2008 Sep 18 04:06 PM

[Billy Staples:]

I hurt all over. I had to get out. too much on margin and was getting killed. Still yearning to be back in eventually and I am not a tech guy, but a normal everyday person who would buy this stuff without dissecting it. no insults intended, just the idea that regular people want the iphone. even if they don't understand half of it, remember when beepers first came out.

I know it seems ridiculous now, but when you saw one, everyone needed to have one. If I see one now on someone other than a doctor or hooker, I laugh

anyway...in the immortal words of Knute Rockne

Lets win this one for the gipper

signed George Gipp (in spirit)

thedarksize.com

2008 Sep 18 11:24 PM