All Hail The iPod Touch
As the competition for smart phone domination starts to heat up, it is becoming increasingly clear that the iPod Touch is Apple's ace-up-its-sleeve, and according to a report by Flurry, a San Francisco-based mobile analytics company, 24 million iPod Touches represent …
Context & Ripple Effects
The iPod Touch has traveled far since its 2007 debut as a screen-first media player that early reviews dinged for weak battery life (Personal Technology's take). By late 2009 it is something else entirely: Flurry's analytics put cumulative sales at 24 million units, and the App Store — live since mid-2008 — has turned the device into a full application platform rather than a music-and-video accessory.
That arc explains why GigaOM frames the Touch as Apple's hidden weapon rather than a side product. Commentators had already been pushing this logic a year earlier, arguing for an iPod Touch HD as the natural stepping stone to an Apple tablet, and August 2009's 'Goodbye iPod, hello iPhone' debate treated the classic iPod as obsolete while leaving the Touch conspicuously unaddressed. With smartphone competition intensifying among Apple, Google and others heading into 2010, a no-contract, carrier-free slice of the iOS installed base matters strategically.
First-order effects
- Apple now fields an iOS installed base of 24 million Touch owners who buy apps and media without any carrier subsidy or contract — revenue per device flows straight through Apple's own store.
- Developers choosing platforms see a larger addressable iOS audience than raw iPhone sales alone suggest, tilting app-development effort toward Apple at exactly the moment rivals need developer mindshare.
Second-order effects
- Competing smartphone ecosystems face pressure to answer with their own subsidized-or-free non-phone devices, because Apple is effectively seeding future iPhone buyers — every Touch household is a pre-sold upgrade customer.
- The Touch cannibalizes Apple's classic iPod line from within, accelerating the decline of dedicated MP3 players and pushing Apple's margins toward app and content transactions instead of hardware alone.
Third-order effects
- If the pattern holds, handheld computing bifurcates into connected phones and cheaper Wi-Fi-only companions running the same OS and store — a template that points toward tablets and other contract-free iOS-class devices, as the iPod Touch HD speculation anticipated.
- App stores become the strategic chokepoint: whoever controls distribution on a large installed base sets terms for developers and content owners, which will draw regulatory and competitive scrutiny as rogue-app research already suggests.
The trend: Mobile computing is consolidating around platform-plus-app-store ecosystems where a vendor's installed base across all device types — not phone sales alone — determines leverage over developers and carriers.