iPod Touch: Selling Like Gangbusters?


Check out the above chart. It’s no secret iPod sales had steadied, or even dropped a bit over the last couple years. Still, it’s generally believed a lot of that is due to people buying iPhones, which are iPods that don’t show up in these sales figures.

In any case, look at the first two months of the last three years. From Y/Y of -28 and -13 to +5 in January, and from -5 and -16 to +10 in February. While the iPod nano may have some hand in this, the iPod touch is clearly selling very well.

TAB – Microsoft: We Couldn’t Kill the iPod, Maybe We Can Kill the iPod touch

You’ve got to give Microsoft credit. Having failed at making the Zune an “iPod killer,” they’ve given up and are trying to make it an “iPod touch killer.” Why go after big brother when little brother has kicked your butt for two years? Beats me; you’d have to ask Microsoft. All I can do is look at the Zune HD and see what it’s about…

Read the rest of this article on theAppleBlog >>

Windows Supersite Blog’s Complete Misunderstanding of the New iPod Announcements.

As usual, Paul Thurrott gets most of this wrong

Incremental. It’s official, folks. The iPod market is now mature. There wasn’t a single major announcement at today’s event

Which is what most who knew what was going on suspected. And yet there was actually great stuff there if you cared to pay attention.

If you think that’s bad, though, look at the Zune: They had Apple right where they wanted them (i.e. with nothing cool to announce) and couldn’t even pull a new device out of its hat.

Let’s take a closer look at the Zune announcement. They have WiFi to use at home and maybe the office (where you don’t need it because you have a computer), but not in public hotspots that require a browser that the Zune doesn’t have. It’s an embarrassing joke. What’s amazing is that Steve Jobs stated WiFi in most CE devices doesn’t work because they have no browser, yet MS did their stupid marketing bullet-point update anyway. The rest of the Zune announcements went downhill from there.

“New” iPod nano. Or as I call it, the second-generation iPod mini. Or the second coming of the first generation nano. Or Apple’s version of the flash-based Zune. Whatever you call it, one thing is clear: Last year’s “fattie” iPod nano was clearly not the success they were looking for. Back to the drawing boards. Oh, I do like the colors though. And the accelerometer is interesting. Why isn’t it in the classic?

Is putting the word new in quotes supposed to fool us? No one can compare today’s nano to the last generation and not see that it’s indeed very new. As for slamming last year’s model, I didn’t see any dip in iPod sales for the holiday season or the rest of the year. Still 10-11M a quarter. Not bad for something supposedly not a success.

Back to the drawing boards? Apple simply utilized the very design they perfected along with an accelerometer they helped to popularize. This was a natural progression.

Oh, and an accelerometer isn’t in the classic because there’s little reason to rotate it (rotation’s mostly for wide-screen video) and because you probably don’t want people shaking your hard-drive based player.

“New” iPod touch. OK, they lowered the price. And they added back iPhone features like a speaker and external volume toggles that quite frankly should have been there in the first place. Do we salute Apple for that? No. No, we don’t.

Again with the quotes. This is where Paul is the most lost. Then again, he needs to be because the touch is where all of Apple’s competitors are so far behind it’s laughable.

First, at the time of the touch introduction the iPhone dropped to a new price of $399 and required a two-year contract. The touch was $299 with no contract. Do you think your extra $100 and two years of data/voice plans couldn’t buy you a little something like hardware controls and a speaker? The idea that the touch should have had these on Day 1 at its price point just goes to show how suckered Paul is by Microsoft’s belief that you should sell your hardware at a loss.

Now, with millions of iPhone and touch sales Apple can get more aggressive. They added the #1 most requested feature, and also a speaker (which was my #1 requested feature), made it lighter and better sculpted for the hand, refined the interface and dropped the price of the 8GB model by $70, and the others by $100.

I don’t salute Apple for anything, but those are terrific improvements to the touch line and, as I wrote about earlier, the most important update of the day in my opinion. Anything Apple does to get its mobile OS into more hands is great news.

Finally, while we’re on the subject of the touch, there is nothing out there that can even touch (heh, pun intended) the first generation units. Not only the hardware, but Apple’s multi-touch interface and mobile OS X, the iTunes integration, the beautiful screen, and the app and WiFi stores (with WiFI you can actually use). Nobody has anything even close. And yet, today, Apple just rendered it old hat. Remarkable.

NBC shows are back. I love this one, and it’s another example of Apple being the bad guy. A year ago, NBC left iTunes because Apple wouldn’t give them the variable pricing they wanted. Apple claimed (and its closest iCabal fanatics parroted) that NBC just wanted to sell TV shows for more than $1.99. But that wasn’t true: They wanted to sell older shows for just 99 cents per episode. And longer, mini-series-type shows for $2.99. Now, in the words of the New York Times, “both sides now say they got what they wanted.” Put another way, Apple caved to NBC’s reasonable and customer-centric demands and NBC got what it wanted. Bravo.

This is utter nonsense. First, if NBC was “customer-centric” they wouldn’t have pulled their content from the #1 store on the market. In the middle of the season, no less! They gave their customers a big “FU” and now Paul tries to re-write it as some sort of act of courage? The fact that they pulled everything tells you that this was an act of pure greed, stupidity, and hubris on NBC’s part. Much like the record companies providing DRM-free music elsewhere, NBC thought they could put a dent in iTunes’ universe. They were wrong.

What you saw today, Paul, but will not admit because you’re a FUD-spewing Apple basher, was NBC acknowledging defeat and coming back to a store they never should have left in the first place. It hurt them. It hurt their customers. It may even have hurt their stockholders. They’re back now because they know they’ll make $$$, and also realized their little temper tantrum and ego trip did them no good.

The NYT is right, though. Both sides did get what they want: Apple held the line on pricing, and NBC is now back on the #1 online video store. Smart move by NBC to swallow their pride, but they should have done it six months ago.

Oh, and one more thing. There was no one more thing. And that stinks. Because these announcements don’t amount to much more than a cheerleading session for continued dominance.

Stop acting as if the mainstream iPod (the nano) has to sing and dance at each announcement. It simply has to offer the strongest overall product in its category (it does), provide great value (it does), and keep improving (it did). Thinner, longer battery life, accelerometer, improved interface and features, beautiful curved design with great colors, and twice the memory — all at the same price point. Why would anyone pay the same price for, say, a year-old Zune design with WiFi you can’t use and an online store with half of iTunes’ content and horrendous DRM on each track? Not to mention paying for those tracks with “points” that Microsoft collects up front. As for the touch, Microsoft and others are years away from getting there…

The new nano and new touch are incredibly strong announcements, and position Apple very well not just for the holiday season but beyond. The touch, especially, is untouchable by the competition.

A Few Quick Thoughts on the New iPods.

I haven’t had time to parse everything, and I’ll play with iTunes and give my thoughts on it later, but here are a few things that struck me — in no particular order — from today’s announcement:


Lots of radio channels, music clubs, online music stores, etc., do this sort of thing, so it really made sense to bring it to the iPod. I’ll have to play with it, of course, but in my experience as a serious music listener these things never really get it right. Any time they say that since you like [artist name here] you’ll also like [another artist name here], it’s “wrong” as often as it’s right.

Like I said, a good and obvious feature to add, and making playlists out of it is a nice variation, but I don’t get too excited about canned recommendations. The demos they gave didn’t seem very good at recommending things any differently that what I’ve seen before.


Makes sense to save a few $$ and discontinue all but one model. With 120GB they’re at a point where they can pretty much satisfy the high-end user. My 80GB unit is almost full, so this will be where I go next.

In Macworld’s live blogging event one of them wondered if this would be the last Classic update ever. I hope not. I see no reason why they cannot keep a hard-drive player in the lineup for at least one more round of updates. Some people need the room.

[UPDATE:] While the Genius feature is on the classic, I notice that the new center popup menu is not. Not installing an accelerometer on a hard-drive based model might make sense (don’t want it shaken so much), so I don’t bemoan the lack of “shake to shuffle”, but not implementing the center popup seems silly. In fact, that lack of effort makes me wonder if indeed this is the classic’s last year. By next year I think the touch will realistically only be at 64GB, which would put Apple’s highest capacity player below 2005 levels. Ouch! I’m curious to see where Apple goes with the classic…


I thought they’d kill the 1GB model. I have a shuffle and really like it, so I’m glad they still start at $49. The new colors are the best yet, in my opinion.


I had no problem with the older generation, but I do admit to preferring the taller model. This thing looks beautiful. I like the colors as well.

Landscape on the 2-inch screen is great, and I think this thing is going to be as big a hit as ever.

I wanted shake to shuffle so bad, but now am disappointed. Those who think exercising or jogging will “trigger” the shuffle are not giving enough credit to just how “violent” an action shaking is. It’s trivial for the accelerometer to know the difference between a shake and any exercise you’d care to perform with one of these things strapped to your body. I’m disappointed, though, because I assumed the shake would turn shuffle on/off. Instead, it appears to instigate a shuffle every time. I’m completely spoiled by the ease with which I can toggle shuffle with the iPhone, and wanted something as easy on the nano. Bummer.


Though not as “brand new” as the nano, this is the killer upgrade in the lineup. Adding the speaker is a HUGE improvement! You also get a microphone using one of a couple new pairs of Apple headphones (more below). Outside volume controls were also badly needed, and they’ve dropped prices $70, $100, and $100 for the three models.I don’t believe Apple does loss-leader stuff, but they are really coming down to get these things off shelves for Christmas.

Some people wanted GPS, etc, but I really think they put in by far the most important hardware improvements and lowered the price significantly. This is a great update.

It’s also the most important update of the day, in my opinion, because Apple wants OS X mobile in as many hands as possible.

New Interface

Better cover flow in the nano is nice. Love the center button popup menu, but why the heck isn’t Search one of the options? Arrrgggh! Am I the only one who actually gets a song in his head and wants to hear it without having to browse to the darn thing? I can search on the nano, but it’s kind of clumsy and a shortcut to get there would have helped greatly.

iTunes 8

Again, Genius doesn’t impress me much but I’ll have to wait to see if it’s any better than the myriad recommendations scheme I’ve seen before. Grid view appeals to me greatly, and I’m really interested in trying it. But it looks like they removed the old “list with album art” view. If true, that could be a shame because it’s the view I use most often.


I’m not a TV guy, but there’s no denying it improves the value proposition for the iTunes Store. Further, since it’s a buck more per show (which I think is reasonable for now) it also got NBC back, which is a biggie as well. Good move all-around, I’d say.

As a bonus, in addition to NBC it adds other NBC stations such as the USA Network, NBC Sports, etc. Further, NBC is kicking in $0.99 episodes (not HD, of course) of some “classic” TV shows.

This is really a win-win for everybody.

New Headphones

Adding the mic and play/volume controls to the nano, classic and touch is GREAT! However, I think the feeling during the event was that these ‘phones came with the new iPods. I do not think that’s the case. Their special features are only compatible with the new models, yet they sell for $29 at the Store. I think you just get the same ol’ headphones with the new models, and have to pony up if you want the remote controls.

Apple’s value for the new models is excellent, so I suppose they just couldn’t swallow the new ‘phones as a freebie as well. Still, it’s kind of a shame.

Oh, and I like the in-ear ‘phones with remote for $79. Better quality with the remote capability. I use expensive over the ear ‘phones for serious listening, but for more casual stuff I can see me getting these when I get a compatible iPod.

2.1 Software

Not available until Friday so there’s not much to say. Steve says it’s bug fixes and stability. If it speeds up my iPhone and backups I’ll be a happy camper.


All in all these are solid announcements. And it’s a great iPod lineup for the holidays. A new iPod nano at 8GB for just $149, and the much-improved touch at the same capacity for just $80 more. Wow!

Apple 2.0: Outside Reality, As Usual.


Philip Elmer-DeWitt rarely writes anything that makes much sense. He jabs at Apple, but his best shots are the kind Mohammed Ali would be throwing today.

Most of the time I just ignore the guy, shaking my head. Still, every now and then he exceeds a threshold and I feel like I should point it out.

Recently Philip decided that he didn’t like what Apple’s charging for storage. After showing prices for the iPod touch, he brilliantly asks this:

On second glance, however, there seems to be something wrong here. Why does a $100 bump in price buy you 8 GB of memory in the the first instance, but an extra 16 GB in the second?

Then, intrepid reporter that he is, he looks at iPhone prices, determines that Apple’s charging $100 for 8GB just like the touch, and asks another deep, probing question:

Why does Apple charge $12.50 per gigabyte in all models except the 32 GB iPod touch, where it’s $6.25 per gig?

He’s got Apple reeling now. Will they ever be able to wriggle out of his clutches? Ha! Before they can even try, he moves in for the kill:

Why does Apple charge $999 for the 64 GB solid-state drive in the MacBook Air? If you do the math, that’s $15.60 per gig of NAND Flash memory, more than double what Apple charges for the same stuff in the new iPod touch.

Philip’s hard-hitting expose is complete, and all the tech world trembles at what he might reveal next.

Well, except for one thing…

I think Philip Elmer-DeWitt is insane.

Here are some questions for you, Philip:

  • Why has every hard drive since the beginning of time provided more storage/$ as you go higher in capacity? I mean, if you “do the math” you’ll see more GB per dollar in a larger drive than a smaller one of the same make/model/manufacturer.
  • Why have I not seen the 64GB SSD drive available as a laptop option for less than $850 (and as high as $1,300)? Everyone is selling them for “more than double” the price of NAND Flash memory. That’s because it’s a new type of device, not just a big 64GB stick. You should really let that market mature a bit before criticizing the prices.
  • Why has Apple’s iPod line always provided more storage/$ in similar models as you move up the line? Yep, just like with hard drives.
  • Why has everyone else’s portable devices done the same?
  • Why does a 2GB RAM stick not always cost exactly twice that of a 1GB, and why does a 4GB not always cost twice that of a 2GB? (Don’t even get me started on 8GB sticks.)
  • Why does a 512MB SD (or any other storage card) not cost half that of a 1GB card?

Clearly, I could go on. The point is that Philip has not brought anything new to light. Had he bothered to “do the math” on just about any memory/storage prices he would have seen this.

OK, maybe Philip isn’t insane, but then he’s certainly ignorant of storage prices — no matter the medium, size, or reseller. I know he’s just trying to cast Apple Steve Jobs in a bad light, but it can’t be done from what he published.

Why iPod Touch Users Have to Pay For Their New Apps.


In today’s Macworld keynote Steve Jobs announced that the iPod Touch will now be getting five applications from the iPhone that it previously did not have:

  • Mail
  • Maps
  • Stocks
  • Weather
  • Notes

This is great news for touch owners.

What’s the catch? Well, for existing touch owners it’ll cost $19.99. As I read the live blogging on the event, a few sites grumbled about this, and I could see them getting their fingers ready to (unthinkingly) blog about the “outrage”.

Well, cool it, guys, and let’s think this through. Consider that Apple’s providing free updates to the iPhone. And Apple’s new Apple TV software is also free to existing owners. And the new touch apps are included on all new iPod touches starting today (with no price increase).

Given all that, can you think of maybe another reason why Apple is charging for the new apps other than being stupid, greedy, etc.? C’mon, think. Think, dammit!

This is speculation on my part, but I believe it’s because of the iPod’s revenue recognition. Unlike the iPhone and Apple TV — whose revenue is recognized over a period of time — iPod revenue is recognized at the time of sale. According to Apple, extending revenue recognition allows them to offer new features to the iPhone and Apple TV without having to charge for them. So in iPod’s case, from an accounting perspective they couldn’t just “give away” the features to existing owners.

In my view, $20 for these apps is a steal, but certainly no one’s forcing any one to buy them. Still, I’m sure we’ll hear lots of whining from a Mac blogging and user community that’s getting more and more whiny, knee-jerk, and filled with a sense of entitlement at each new Apple announcement.