Apple’s weapon of mass consumption: iPod touch creates future iPhone owners

New iPod touch starts at $188.99.  Free engraving, case, and charger.“The highly publicized launch of Droid last month marked a major effort by Google, Verizon and Motorola to slow the iPhone’s growing power in the marketplace,” Peter Farago reports for Flurry in the company’s latest “Smartphone Industry Pulse” report.

MacDailyNews Take: And Palm’s Pre before that, and Blackberry’s Storm before that, and the HTC Touch before that…

Farago continues, “And while the Android platform is the most legitimate challenger to iPhone smartphone dominance, it’s important to remember that the iPhone’s flank is protected by an often overlooked, powerful fighting brand: iPod touch. According to Apple, 58 million iPhone OS devices have been sold worldwide through September 2009. Of those, Flurry estimates that just over 40%, around 24 million are iPod touch devices.”

“While it is clear that the iPhone has significant short-term revenue value for Apple, Flurry believes that the iPod Touch holds more long-term strategic value for Steve Jobs and team. As all industry eyes look to the iPhone, the iPod touch is quietly building a loyal base among the next generation of iPhone users, positioning Apple to corner the smartphone market not only today, but also tomorrow,” Farago explains. “In terms of Life Stage Marketing, the practice of appealing to different age-based segments, Apple is using the iPod touch to build loyalty with pre-teens and teens, even before they have their own phones (think: McDonalds’ Happy Meal marketing strategy). When today’s young iPod touch users age by five years, they will already have iTunes accounts, saved personal contacts to their iPod Touch devices, purchased hundreds of apps and songs, and mastered the iPhone OS user interface. This translates into loyalty and switching costs, allowing Apple to seamlessly ‘graduate’ young users from the iPod Touch to the iPhone.”

The data in Flurry’s report was computed from a sample size of over 3,000 applications, 45 million consumers and 4 platforms: Apple (iPhone and iPod touch), Blackberry, JavaME and Google Android. Each day, Flurry tracks over 15 million end user sessions across apps that have included its analytics solution.

There’s much more in the full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

23 Comments

  1. I am one who tested the iPhone water with a iPod Touch. I loved it and as soon as the 3G came out I moved to the iPhone. My husband demanded I give the iPod to him and not someone else, I had no idea he wanted it. It is the only tech device I have had that improved about every 6 months instead of becoming obsolete. The upgrade price was cheep.
    Now that Apple has proved it is more than a toy it will start making inroads into the business world and bring the iPhone with it.

  2. The Storm 2 came out to massive disinterest. This is the phone that Verizon and RIM called an iPhone killer. Android phones with 256MB of memory for apps and slow performance have a long way to go too.

  3. Data plan and voice plan costs are a major stumbling block for a complete family to own iPhones… but I still agree 100% with the article’s take on the matter. My wife and 2 kids both own iPod touches. Can’t afford to make it a 4 iPhone family, but I can assure you we will eventually make it so…

  4. And the halo glows in full force. Here’s a related anecdote.

    A class of four-graders in NYC school. A computer class teacher is talking about how the they have PCs in the school lab and they run Windows. He goes on to say “Many of you may have Macs at home. Let’s see, who has a Mac at home?” Eight (out of twenty) children raise their hands. “That’s very cool!” says the teacher. Later in the week, one of the (apparently Mac-less) parents tells me the following: “My son came the other day and told be about their computer class. He asked me why don’t WE have a Mac?”. That alone was priceless. Not to mention four out of ten families were on the Mac in this class, and my anecdotal evidence from prior years (different mix of kids every year) confirms approximately the same Mac penetration of about 40% in this school. Not to mention that practically EVERY kid in the middle school (grades 5 through 8) has an iPod, and almost all of the high school children are already on iPhones. There is no doubt in my mind, each generation of seniors from this school goes to college with a Mac in their backpack.

  5. “Then from iPhone to the Mac”

    in case you haven’t noticed, the PC/Mac is getting less and less important.

    that’s the 1990’s battleground.

    now we have the cloud server and portable clients. and Apple looks pretty damn great making all the clients, and Google, Facebook and MS fight over cloud services.

  6. I’m buying my Mom an iPod Touch for Christmas pre-filled with all of her favorite music, photos of all her friends, children, grandchildren and vacation photos. I’m going to take video of every family member saying a 20 second message to her and combine them with music in iMovie. It’ll be a fun project.

    She’s fascinated with everything that the iPhone can do but doesn’t want the monthly charges.

    I’m betting that she’ll soon come to realize, “I really like the iPod Touch, but it just made sense to buy an iPhone so I only have to carry one device.”

    I’d say about 4 months.

  7. One useful fact Apple ought to make clearer: you can “restore” an iPod touch backup to an iPhone via iTunes. This provides today’s iPod touch users with a painless transition to an iPhone.

    True story: My mom got a free iPod touch when buying an iMac with her educator discount. For the first several months I had it, before wiping it and giving it back to her, showing her how it would be useful to her. When I got my iPhone 3GS four months later, I realized I had the option to restore it from my last iPod touch backup. Figuring it wouldn’t hurt give it a try, I performed the restore, and everything worked perfectly! No OS-related problems (I was jumping from OS 1.x to 3.0), no app glitches, and all app settings restored – I was quite impressed. It just worked!

    Apple’s done an excellent job of making sure their success with the iPod leads people to the iPhone. As a result, it’s going to be extremely difficult for competitors to make a dent in Apple’s dominance.

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