iPod touch Sales

  • Posted: 06 September 2010 12:29 AM

    rattyuk - 06 September 2010 01:25 AM

    Oh, forgot to mention that Horace got a link from Gruber today as well:

    How Many iPod Touches Have Been Sold to Date?
    Horace Dediu estimates around 38 percent of all iOS devices sold to date. This is why I?m surprised, at least slightly, that there aren?t more iPod Touch competitors.

    http://daringfireball.net/

    The cell phone providers make their money by selling data plans (contracts) and don’t view selling the hardware as a source of profit.

    The cell phone manufacturers are fixated on selling phones to the service providers.

    What I find interesting is that a 32 GB iPod Touch retails at $299, and a 32 GB iPhone 4 retails at $299 plus a two year contract.

    For Apple to make money on the iPhone touch they must have really good cost control and manufacturing efficiency.  I wonder what their margins are?

    Now that Apple has shown the computer industry what it takes to make a super tablet, and they are busting their b***s to copy them, it may occur to other computer manufacturers that the small form factor touch is a pretty good sized market and they may try to compete in it….if they figure out how to make and sell them at a profit.

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  • Posted: 06 September 2010 01:27 AM #1

    I split the above post from the independent analyst Twitter feed topic because the discussion deserves its own air space.

    PED is running a column on Apple playing coy with iPod touch unit sales numbers.

         
  • Posted: 06 September 2010 02:57 AM #2

    I was pretty surprised at it’s low price when the original touch was introduced .  I’ve since just basically assumed that they were viewing the rather exorbitant profits from the phone as an offset for the low margins of the touch.  Brilliant strategy really.  Using the touch as a gateway drug for the phone while it’s low cost erects a barrier to entry for potential competitors. That’s how I’ve always looked at it anyway.

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  • Posted: 06 September 2010 04:25 AM #3

    BillH - 06 September 2010 05:57 AM

    I was pretty surprised at it’s low price when the original touch was introduced .  I’ve since just basically assumed that they were viewing the rather exorbitant profits from the phone as an offset for the low margins of the touch.  Brilliant strategy really.  Using the touch as a gateway drug for the phone while it’s low cost erects a barrier to entry for potential competitors. That’s how I’ve always looked at it anyway.

    I wouldn’t be concerned about the iPod touch being a low margin product. It’s not. The component costs are not high relative to retail price and consider just how many of the devices Apple makes per year. Economies of scale work in Apple’s favor.

         
  • Posted: 06 September 2010 08:17 AM #4

    DawnTreader - 06 September 2010 07:25 AM

    I wouldn’t be concerned about the iPod touch being a low margin product. It’s not. The component costs are not high relative to retail price and consider just how many of the devices Apple makes per year. Economies of scale work in Apple’s favor.

    A simple point but I wonder how the economies of scale are working out for the tens of companies working on Android devices? Samsung, and to a certain extent, LG of course can ride the coat tales of one of their clients for a while so that would probably help them with their screen and memory costs. But the rest? Apple’s product refresh rate ensure that each product that works works well for a long time. The me too brigade rely on short runs where there is little to be earned just a land grab until their customers get bored and they then have to add yet more bells and whistles.

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  • Posted: 06 September 2010 05:34 PM #5

    rattyuk - 06 September 2010 11:17 AM
    DawnTreader - 06 September 2010 07:25 AM

    I wouldn’t be concerned about the iPod touch being a low margin product. It’s not. The component costs are not high relative to retail price and consider just how many of the devices Apple makes per year. Economies of scale work in Apple’s favor.

    A simple point but I wonder how the economies of scale are working out for the tens of companies working on Android devices? Samsung, and to a certain extent, LG of course can ride the coat tales of one of their clients for a while so that would probably help them with their screen and memory costs. But the rest? Apple’s product refresh rate ensure that each product that works works well for a long time. The me too brigade rely on short runs where there is little to be earned just a land grab until their customers get bored and they then have to add yet more bells and whistles.

    It’s among the reasons we haven’t seen iPod touch competitors nor successful Android competitors for the iPhone. The Droid requires heavy promotion from Verizon. Volume doesn’t necessarily mean success. Ask Dell about its performance in the PC market.

    This is also the reason we won’t see an iPad competitor introduced in time for the holiday quarter. The iPad’s $499 entry price is a significant barrier to market entry and market success.

         
  • Posted: 06 September 2010 10:44 PM #6

    rattyuk - 06 September 2010 11:17 AM
    DawnTreader - 06 September 2010 07:25 AM

    I wouldn’t be concerned about the iPod touch being a low margin product. It’s not. The component costs are not high relative to retail price and consider just how many of the devices Apple makes per year. Economies of scale work in Apple’s favor.

    A simple point but I wonder how the economies of scale are working out for the tens of companies working on Android devices? Samsung, and to a certain extent, LG of course can ride the coat tales of one of their clients for a while so that would probably help them with their screen and memory costs. But the rest? Apple’s product refresh rate ensure that each product that works works well for a long time. The me too brigade rely on short runs where there is little to be earned just a land grab until their customers get bored and they then have to add yet more bells and whistles.

    I believe that Apple’s manufacturing capabilities are awesome.  They clearly have (and use) buying power.  They keep their product lines simple, few SKU’s (compare to the large number of phones other manufacturers have).  They manage their inventory incredibly well, even when most people know a new model is coming out.  Their product quality and support have no peers.  They appear to be on top of their suppliers and sub-contractors, and they don;t fall into the habit of becoming sloppy just because they have great margins.

    The iPhone, which sells for almost $600 probably has a margin approaching 60%.  The iPod Touch which sells for $299 probably has a lower margin (I would guess 45%), still an enviable number compared to computer and phone manufacturers.  Of course it lacks certain features (no phone for one, cheaper camera, etc).  The same reasoning applies to the iPad.  I doubt that there are any companies that can compete with them in the long run.  I am not implying that they won’t have competition; their competitors just won’t make a lot of money.

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    Posted: 07 September 2010 04:21 PM #7

    Three different display size of Multi-touch Device
    ———————————————————-
    iPod nano…..iPod touch….iPad
    16GB….........8GB…...........16GB
    $179….........$229….........$499

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  • Posted: 07 September 2010 05:34 PM #8

    Has anyone noticed that two new touches make an untraceable comm link?

         
  • Posted: 07 September 2010 07:13 PM #9

    danthemason - 07 September 2010 08:34 PM

    Has anyone noticed that two new touches make an untraceable comm link?


    does that mean the Telcos have no way to control or bar facetime comm? If true many will go with a iPod touch as a contract free iPhone and a cheap ordinary cell phone. For most comm, you can wait until you are in touch with a free wifi access point.

    Does that mean the future of smart phones is not as great as analysts tell us…?


    During the september 1st iPod event, SJ said “The iPod touch is an iPhone without a phone…. an iPhone without contract” Could be a much stronger statement than i thought.

    [ Edited: 07 September 2010 07:17 PM by Hamourabi ]      
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    Posted: 07 September 2010 07:28 PM #10

    danthemason - 07 September 2010 08:34 PM

    Has anyone noticed that two new touches make an untraceable comm link?

    If you mean untraceable from a security standpoint that is untrue.  Your first use of Facetime results in a registry with an Apple XMPP server so they can definitely route trace the connection to the devices.

         
  • Posted: 07 September 2010 07:37 PM #11

    Traced to an iTunes account, opened with a gift card?

         
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    Posted: 07 September 2010 07:54 PM #12

    danthemason - 07 September 2010 10:37 PM

    Traced to an iTunes account, opened with a gift card?

    Not sure on how the account setup will work for an iPod touch but you can bet that the traffic can be tracked.  From what I have read the certificate exchange between the devices is the only part of the traffic which is encrypted.  So if someone was able to tap into your router or device and had the right software they could listen into the conversation.  The actual communications is using standard SIP .

         
  • Posted: 07 September 2010 08:01 PM #13

    Thanks Pats, interesting stuff, I’ve got some reading to do.

         
  • Posted: 09 September 2010 06:27 AM #14

    Gruber at Daring Fireball is dependable, except when he’s not. He complains that the new Touch has no mic. It does. He may correct the error by the time you read this.

    Here

    And here are the ways the new Touch is worse than the iPhone 4:

    It apparently has only 256 MB of RAM, compared to the iPhone 4?s 512. More RAM allows more web pages and apps to remain open at the same time.
    The rear camera is pretty lame: less than one megapixel resolution, fixed focus, no way to adjust exposure (the front-facing camera is apparently the same as the iPhone 4?s, though).
    No GPS.
    Ships with cheaper headphones, with no remote or microphone.

    [ Edited: 09 September 2010 06:35 AM by danthemason ]      
  • Posted: 09 September 2010 06:40 AM #15

    danthemason - 09 September 2010 09:27 AM

    Gruber at Daring Fireball is dependable, except when he’s not. He complains that the new Touch has no mic. It does. He may correct the error by the time you read this.

    Here

    And here are the ways the new Touch is worse than the iPhone 4:

    It apparently has only 256 MB of RAM, compared to the iPhone 4?s 512. More RAM allows more web pages and apps to remain open at the same time.
    The rear camera is pretty lame: less than one megapixel resolution, fixed focus, no way to adjust exposure (the front-facing camera is apparently the same as the iPhone 4?s, though).
    No GPS.
    Ships with cheaper headphones, with no remote or microphone.

    I think you’ve misunderstood his meaning.  It’s the headphones that no longer have the mic and remote,so you have to take the iPod out of your pocket to do stuff.