Some interesting mobile ad stats for the iPod touch in December from the folks at AdMob.

As many of us suspected, the iPod touch may the surprise product for the 2008 holiday season. As I’ve stated in other topics, all of the electronics stores I visited in the few days after Christmas had iPod touch cases displays either mobbed or essentially picked clean of stock.

DawnTreader - 08 January 2009 11:53 PM

Some interesting mobile ad stats for the iPod touch in December from the folks at AdMob.

As many of us suspected, the iPod touch may the surprise product for the 2008 holiday season. As I’ve stated in other topics, all of the electronics stores I visited in the few days after Christmas had iPod touch cases displays either mobbed or essentially picked clean of stock.

While traveling for the holidays, I heard a report on NPR about how there seemed to be a great deal of interest in choosing the iPod Touch over the iPhone due to AT&T’s excessive plans for iPhone, and that all the “best” features could be obtained much cheaper by getting an iPod Touch instead.

Could be some evidence that the NPR story has some validity. I have to admit that AT&T has so far kept me from an iPhone.

iBill - 09 January 2009 12:09 AM

DawnTreader - 08 January 2009 11:53 PM

Some interesting mobile ad stats for the iPod touch in December from the folks at AdMob.

As many of us suspected, the iPod touch may the surprise product for the 2008 holiday season. As I’ve stated in other topics, all of the electronics stores I visited in the few days after Christmas had iPod touch cases displays either mobbed or essentially picked clean of stock.

While traveling for the holidays, I heard a report on NPR about how there seemed to be a great deal of interest in choosing the iPod Touch over the iPhone due to AT&T’s excessive plans for iPhone, and that all the “best” features could be obtained much cheaper by getting an iPod Touch instead.

Could be some evidence that the NPR story has some validity. I have to admit that AT&T has so far kept me from an iPhone.

It’s the costs of the plans that pay the high subsidies to Apple. Economies of scale work well. I have four iPhones on my plan and with unlimited texting as a plan element, the lower cost of each incremental iPhone addition begins to bring down the average cost per phone.

Multiple sources of data seem to agree. Look at Net Application’s web-browsing share for the iPod Touch: The Christmas and week-end spikes have now settled down, but the web-browsing share still more or less doubled for the iPod Touch from what it was before December 2008.

iBill - 09 January 2009 12:09 AM

I have to admit that AT&T has so far kept me from an iPhone.

My wife, myself and I all chose the Touch over the iPhone due to the ATT factor. Not that we have any disparaging views of ATT, but rather our friends etc. use VZ which allows free network calls.  I do like the Touch though.

Edit: And as I mentioned the other day, I do see a lot of Touchs among the Middle school crowd.  Makes a lot more sense than buying a phone and paying for a data plan that won’t be fully utilized.

Play Ultimate - 09 January 2009 03:16 PM

iBill - 09 January 2009 12:09 AM

I have to admit that AT&T has so far kept me from an iPhone.

My wife, myself and I all chose the Touch over the iPhone due to the ATT factor. Not that we have any disparaging views of ATT, but rather our friends etc. use VZ which allows free network calls.  I do like the Touch though.

What does VZ offer in terms of service that AT&T doesn’t? AFAIK, there’s free calling within the AT&T cellular network as well? Most of my calls do not use any of the alloted monthly minutes.

DawnTreader - 09 January 2009 11:04 PM

What does VZ offer in terms of service that AT&T doesn’t? AFAIK, there’s free calling within the AT&T cellular network as well? Most of my calls do not use any of the alloted monthly minutes.

Especially when you factor in the night and weekend minutes (5,000). And yes, calls to other ATT mobile phones are free.

DawnTreader - 09 January 2009 12:54 AM

It’s the costs of the plans that pay the high subsidies to Apple.

I’m not concerned about loss of revenue due to the what I consider merely short-term selection of touches over iPhones. I think the typical thought process will go something like this:

1) Wow, if I get an iPod touch I can do all the cool things an iPhone does without having to pay for phone service, and I’ll still get to use my provider of choice rather than switching to AT&T.

2) Gee, I really love this iPod touch I’ve been using for months now, but wouldn’t it be great if I didn’t have to carry two devices around all the time?

3) Oh fine, I’ll get the iPhone and save myself the hassle – at least with AT&T’s rollover minutes I wind up with more than on my current plan, so I’ll make the sacrifice in quality of service in exchange for the convenience.

Net result: Apple has now sold an iPod touch + an iPhone instead of just an iPhone.

MacGuffin

MacGuffin, you’ve got the thought process dead-on. One other variant will emerge down the road too. Once exclusivity ends, step 3 won’t require a change in carrier, yet the phone upgrade that reduces the “personal device count” will be iPhone. This strategy is brilliant.

I should add that my son informed me that many of his friends got iPod Touches for Christmas.

I think Apple will surprise many with how many they have sold over the Christmas quarter.  How WS will react is will be a different question.

Wall Street got them as gifts too. They will act like the adolescents, except they can afford more apps.

Yeah I know really weak.

MacGuffin - 10 January 2009 05:05 PM

DawnTreader - 09 January 2009 12:54 AM

It’s the costs of the plans that pay the high subsidies to Apple.

I’m not concerned about loss of revenue due to the what I consider merely short-term selection of touches over iPhones. I think the typical thought process will go something like this:

1) Wow, if I get an iPod touch I can do all the cool things an iPhone does without having to pay for phone service, and I’ll still get to use my provider of choice rather than switching to AT&T.

2) Gee, I really love this iPod touch I’ve been using for months now, but wouldn’t it be great if I didn’t have to carry two devices around all the time?

3) Oh fine, I’ll get the iPhone and save myself the hassle – at least with AT&T’s rollover minutes I wind up with more than on my current plan, so I’ll make the sacrifice in quality of service in exchange for the convenience.

Net result: Apple has now sold an iPod touch + an iPhone instead of just an iPhone.

MacGuffin

A few points on the above thoughtful post:

The exclusivity arrangement with AT&T was necessary when the iPhone was originally released. AT&T is spending huge amounts to support the iPhone. The investment is so large it has materially depressed AT&T’s near-term earnings. Apple provides one important thing AT&T hasn’t been able to create on its own - customer loyalty.

Absent exclusivity, it’s unlikely Apple could command the same level of subsidy from multiple carriers.

IPod touch sales as an alternative to iPhone purchases isn’t such a bad thing. Both devices bring volume to the app store and build Apple’s leadership in the handheld device market. For developers it makes little to no difference if app sales are to iPhone users or iPod touch owners.

I expect the iPod touch numbers for the quarter to be staggering. It’s the consolation gift prize for parents who don’t want to foot the monthly bill (regardless of carrier) to provide their son or daughter with a smart phone.

I’m sure a lot have been sold, but the exceptional surge may in part due to touches bought with $100 education Macbook subsidy being set aside as gifts in quite large numbers (e.g. student does deal to split the $100). i.e. I suspect a percentage actually sold in the previous quarter have only just been activated.

I think we all agree that the iPod Touch will be a star product to brag about for this earnings call. And lets not forget to talk about one important attribute, we’ll recognize the revenue from the Touch sales immediately, it won’t be spread over 24 months like the iPhone. The earnings impact will be felt right away!

The fact Apple is further establishing the application platform and driving future iPhone sales is a great bonus. All those analysts who felt the iPod story was reaching it’s end had no understanding of what the Touch was all about. I’ll trade a couple of Shuffle sales for a Touch sale any day!

I’ll try later

MacGuffin - 10 January 2009 05:05 PM

DawnTreader - 09 January 2009 12:54 AM

It’s the costs of the plans that pay the high subsidies to Apple.

I’m not concerned about loss of revenue due to the what I consider merely short-term selection of touches over iPhones. I think the typical thought process will go something like this:

1) Wow, if I get an iPod touch I can do all the cool things an iPhone does without having to pay for phone service, and I’ll still get to use my provider of choice rather than switching to AT&T.

2) Gee, I really love this iPod touch I’ve been using for months now, but wouldn’t it be great if I didn’t have to carry two devices around all the time?

3) Oh fine, I’ll get the iPhone and save myself the hassle – at least with AT&T’s rollover minutes I wind up with more than on my current plan, so I’ll make the sacrifice in quality of service in exchange for the convenience.

Net result: Apple has now sold an iPod touch + an iPhone instead of just an iPhone.

MacGuffin

Looking at all the iPhone data from NetApplications Market Share, it seems unlikely that the iPod Touch is stealing much from the iPhone.  Their latest weekly share for the iPod (http://marketshare.hitslink.com/operating-system-market-share.aspx?qprid=10&qpmr=24&qpdt=1&qpct=3&qptimeframe=W) is 0.11% versus about 0.46% for the iPhone, and the iPhone is continuing it’s share growth trend. 

This graph below is mine based on Net Applications weekly data for the 2G iPhone up through May 31, 2008 and for both 2G and 3G thereafter.  I’m paying attention to the 7 day moving average and especially to the exponential curve fit with it’s projection out 1 month.  It’s been a good fit.  The iPhone should hit .6% in late Feb or early March.