Blog Post

The iPod Touch Holiday Sales Spike, or Why Apple is Building a Tablet

Christmas was kind to Apple (s aapl) this year. The iPod touch seems to have been a popular gift this holiday season, at least according to some interesting statistics regarding App Store downloads over the period leading up to and including Christmas day. App download activity information tracked by Flurry Analytics (via MobileCrunch) shows a massive increase in downloads on December 25.

The iPhone also experienced a holiday bump, although nowhere near the surge the iPod touch had. That’s to be expected, since people are far less likely to give an iPhone as a gift, considering the attendant cell service contract and recurring fees associated with the smartphone. This also marks the first time app downloads on the iPod touch have exceeded those on the iPhone.

Overall, the App Store saw a 51 percent increase in downloads from November to December. Note that only downloads are being accounted for here, so it isn’t clear what percentage of these figures are free apps and how many are paid. In either case, it’s good news for Apple, and probably for top app developers as well. Thanks to the way the App Store is organized, many of these downloads probably came from the top 25 and 50 lists available on the mobile version of the software marketplace.

Apple’s growth rate exceeds that of the Android market by a fair margin, with its 51 percent increase dwarfing Google’s 22 percent spike. Despite the advent of many competitors, and the variety of Android devices available, the App Store’s growth shows no signs of slowing or reaching a plateau.

Which is why Apple’s plans for a tablet are beginning to make more sense to me. Despite all the buzz online about the device, I had a hard time figuring out who Apple would be able to successfully market such a device to, beyond fanbois and tech enthusiasts. But thought of as another way of extending the App Store’s reach and capitalizing on its success, it begins to make sense. Especially when you consider the latest rumors, which seem to indicate that the device, when it does arrive, will more closely resemble an incredibly versatile PMP than a tablet computer.

As long as the price point is kept low enough, I can definitely see iPod touch owners trading up, and people more interested in the movie and video side of things making a first iDevice purchase. In fact, the pricing structure of the tablet is the most intriguing aspect, as far as I’m concerned, and I can’t wait to see what Apple thinks people will pay for its latest creation.

4 Responses to “The iPod Touch Holiday Sales Spike, or Why Apple is Building a Tablet”

  1. Price will NEVER be low enough for apple.

    Look at the ipad, $700 – when you can get a similar tablet from Sony for around $500.

    The iPhone 4 – $500 on a contract! Who on earth would pay this? Well clearly all of the Apple followers, hence 600,000 sold in presale.

    They are certainly doing something right…

  2. Scott King

    And what price point is low enough???

    Consider that the first iPhone was introduced at the $599 price for 8GB with no subsidy. The actual retail price of the top end iPhone 3GS (32GB) model with no contract is $699. I don’t see how a new 10″ tablet from Apple would be priced anything less than $899-$999. Even if the tablet gets associated with a subsidy for a 3G wireless subscription, that’s still around $699 to $799, and most people with an iPhone will not qualify as a new contract customer and get the subsidy. People seem to expect this thing to cost less than $700 and that is nuts, go buy a netbook and enjoy your toy.

    Gawkers will complain about the price no matter what, they always do. None of this really matters because people will buy $999 tablets from Apple because no one else will have anything like it.

    • Agree i don’t see it priced below $1,000. People thinks the tablet is intend to be a low end device putting it below the MacBook.

      I think this is another revolutionary step in computing this is in a category of its own.

      I believe this will do for portable computers what the iPhone did for cell phones.