Apple's iPod Touch losing out to iPod Nano at checkout lines
After surveying 90 Apple stores and 18 Best Buy locations over the Thanksgiving weekend, analysts for ThinkEquity Partners LLC concluded that despite a high level of interest in the new iPod Touch among shoppers, the more affordable iPod Nano remains the clear winner at the cash register.
"Our channel checks indicate that of all the iPods, the Touch piqued the most interest from customers," analyst Darren Aftahi wrote in a research report to clients this week. "However, our conversations do not lead us to the conclusion that "level of interest" translated into consumer purchases of iPod Touch."
From interactions with sales representatives and store managers, Aftahi and his team determined that even though 8GB iPod Touch ($299) generated lots of interest among holiday shoppers, when it came to purchases, they instead decided on the 8GB iPod Nano given its smaller size and lower price ($199).
"Also, a lot of consumers seemed to opt for iPhones over iPod Touch because iPhones facilitate all that iPod can do (and more), but the opposite is not true," the analyst further advised clients. "Older individuals preferred iPod Touch because of its interface and Wi-Fi capability, while iPod Nano was more favored by younger individuals (children and teens)."
iPhone sales
Based on his checks, Aftahi believes that iPhones are selling well, perhaps well enough to best his 3.2 million quarterly estimate come the close of Apple's first fiscal quarter of 2008 in late December.
However, he noted that feedback concluded that shoppers who are not currently AT&T customers are generally choosing an the iPod Touch over an iPhone — satisfied with its WiFi capability — to avoid early-termination carrier fees form their existing cellular providers.
"Our checks also confirmed our view that an individual buying an iPhone would not purchase iPod Touch and vice versa," he wrote. "It may be noted that the comparison between iPhones and iPods is essentially a comparison between iPhone and iPod Touch, given their similarity in appearance."
Mac sales
Meanwhile, MacBooks were the clear winner of Apple's personal computer business during the Thanksgiving weekend, according to ThinkEquity's data and channel checks.
"MacBooks were perceived to have generated greater interest (and purchases) than iMacs among consumers this past weekend, and we believe this will continue throughout the holiday season," Aftahi told clients. "It is worth noting that MacBooks are more popular among the college population, while iMacs are favored by families, a point reinforced through our checks."
The analyst reiterated his Buy rating and $227 on shares of the Cupertino-based Apple.
"Consumer sentiment seems to favor Apple this holiday season," he wrote. "The stores that we visited exhibited high customer inflow rates, and the people who entered the store spent a considerable time there."
92 Comments
The iPod Touch was never a very wise move, but Apple does not always have a hit on its hands.
After surveying 90 Apple stores and 18 Best Buy locations over the Thanksgiving weekend, analysts for ThinkEquity Partners LLC concluded that despite a high level of interest in the new iPod Touch among shoppers, the more affordable iPod Nano remains the clear winning at the cash register.
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I bought an iPod Touch (actually 2 Touches!) when I was in Japan last week
- saved about £70 each over the uk price.- it's really nice - I don't want the iPhone yet (no 3G, 2Mpixel camera, no video camera, no 16GByte version, long expensive service contract etc) - I think I'll stick with my Nokia N95 for a phone for now, and use my Touch for entertainment.
- the nano is ok, but the Touch is definitely worth the extra money, IMHO.I am looking forward to seeing some more interesting apps running on it after the SDK arrives.
From interactions with sales representatives and store managers, Aftahi and his team determined that even though 8GB iPod Touch ($299) generated lots of interest among holiday shoppers, when it came to purchases, they instead decided on the 8GB iPod Nano given its smaller size and lower price ($199).
"Also, a lot of consumers seemed to opt for iPhones over iPod Touch because iPhones facilitate all that iPod can do (and more), but the opposite is not true," the analyst further advised clients.
Unsurprising. I feel exactly the same way. The Touch is nice, but there's no point to it when placed beside the iPhone. If you just want an iPod, the Nano is a great little player and the Classic has a lot of space. The Touch is the only one without a clear purpose.
You can be sure that Apple expects the Nano to outsell all other players especially this time of year. There are a few variables worth considering. First, during the holiday season people are usually shopping for others. Studies have shown people will buy less expensive options when shopping for others. So, it makes sense during this time of the year people will be gravitating towards Nanos and Shuffles. This has happened ever since Apple has had all three products. Second, after the holidays people usually have spending money to spend on themselves. They usually will spend more on themselves then on others if they have the money to do so. Third, the iPod Touch is a great product, but for many people looking for a high end player the iPod Classic still makes more sense. For instance, the iPod Touch hardly has any storage space when compared to a Classic. You can bet that is why Apple hasn't killed off the Classic. Eventually Flash storage prices will drop and capacity will grow. When that happens, Apple will likely kill off the Classic and sales of the Touch will grow. Finally, there are many organizations throughout the Country giving away iPods as incentives. Most of these entities use the iPod Nano because of the price point. For instance, I have received free an iPod Mini from Citibank and a Nano from Key Bank for opening up accounts. I suspect this has a huge impact on what iPods sell.
"Our checks also confirmed our view that an individual buying an iPhone would not purchase iPod Touch and vice versa," Well duh! Thank you Mr analist (misspelling intentional) for pointing out this very subtle fact. I would have missed it completely if not for your deeply insightful analysis.Sarcasm aside, I bought an iPod classic on black thursday. Would have bought the iPod Touch if it had 80 gigs rather than 16.