Analyst: Apple traded 1.5 million iPhone holiday sales to establish iPod touch

“Apple knowingly gave up as many as 1.5 million iPhone sales during the holiday quarter to establish the future of the iPod as a mobile device, according to investment note issued on Monday by Needham & Co.,” Aidan Malley reports for AppleInsider.

“Analyst Charlie Wolf bases his observations around statements made by Apple chief operating officer Tim Cook during the iPod maker’s latest quarterly results conference call; the executive referred to the iPod touch as becoming a ‘mainstream Wi-Fi mobile platform’ rather than just a touchscreen version of the iPod. The company’s willingness to reduce the feature and price gaps between the iPhone and iPod touch indicates that it’s ready to trade short-term losses for long-term growth of the iPod as a general device, especially among existing iPod owners trading up from older players,” Malley reports.

“The increased support for the iPod touch may also be a calculated risk that future iPhone updates will negate any immediate hits to the current product’s success. Needham predicts that Apple will release an upgraded, 3G-capable iPhone at the same price in the summer and will drop the price of the current model to $299 at the same time, also dumping current iPod touch prices to $199 and $299,” Malley reports.

Full article here.

During the company’s conference call, Apple executives, stated at least three separate times that, to paraphrase, “Apple established iPod touch which has the potential to become the very first mainstream mobile platform running all kinds of applications.”

29 Comments

  1. @ Shen,

    It’s coming !!! In ’08 !!! It will have hand writting, larger display over the Touch. It will redefine mobility as most people only need web browsing, a little hand writting, document (book) reading, video watching and music listening when they’re on the more. A laptop is too much for that. And no PDA or tablet was previously designed for that. The iPod Touch is giving a BIG hint away !!!!

    Now, when this year ??? It doesn’t belong to me to say it, but only to the Steve.

  2. OMG OMG OMG!
    Its like this is some ‘new’ idea…thestormglass.com – these guys saw the writing on the wall as soon as the iPhone came out…and they are just some random bloggers.

    It staggers me that people get so excited about something so obvious.

  3. The suggested price drops are nuts. Apple doesn’t do low-end. Instead, Apple will keep the prices higher but add memory and capabilities. Like a 16GB iPhone at the current price and 32GB Touch.

  4. I would suspect this was a long term plan even before the iPod came out. iPod is a pretty generic term and a lot of people / rumors assumed that is was a way to start a platform and not necessarily just about a music player.

    That appears to be the case. Can’t wait to see what happens in ’08.

  5. iphone, ipod touch, itablet…… 30 years is just the beginning! They belong to a new platform. Jobs said, the battle of desktop is over, Microsoft won. The new battle front is on our palm. Apple had already occupies most strategic position: phones, ipods.. When the SDK and new device come out later this year, booommm….. Apple takes the whole new platform. So, there’re 50 more weeks in 2008, said Jobs during MWSF 08

  6. 16gb iPhone is all I need – the 8gb is not quite enough, but I love it anyway.
    The iPhone is so far ahead of all the rest, its a joke.
    Dont care about ‘3G’ , but I will probably get one anyway.

    Love the Air – will get one.

    Dont care about Apple stock price – thats just gambling and the house always wins. (not sure who the house is, but it aint your average punter)

    Very keen on iTunes movie rentals – hope they arrive here in Canada soon.

    Google maps is really good – GPS, no.
    I dont get lost when driving around, what with road signs etc. You have to be kinda stupid to get lost in a car, for fricks sake.

  7. Mini Drives would harm the form factor and the performance. Furthermore, every other company can take that route – it isn’t original. If Apple choose this direction, only OSX would stand for it’s greatness.

    NO – not a mini hard drive… Nanflash is faster, less power consumption. Better suited in every case. Apple made a BEAUTIFUL choice with form, function and engineering this product. Lack of drive space… I think differently on this issue. However, I would have liked to see a SD expansion slot.

    I totally prefer a iPhone the way it is designed. When manufacturing processes and prices of flash memory drop – then buy a big iPhone. 64 Gb would be grossly enormous for any phone – but I guess some folk need this. For the rest of us 16 is most likely the sweet spot.
    And this is why the iPod Touch is appealing. Furthermore, the iTouch lets APPLE make more money on a similar product NOT tied into the AT&T;deal.

    dougless <—- my freakin log-in doesn’t work here at MDN — since the day I registered

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