Is the iPod Touch Really an iPod?

Analysts generally weren’t too impressed with Steve Jobs’ announcements about new iPod features and lower prices last week in San Francisco. But in light of the new iPhone 3G released in July with a lot of hype and a lower price, the new $229+ price tag on the iPod Touch was an interesting move.

Is Apple is trying to make the Touch appeal to people who want an iPhone but are bound to their carriers? Maybe. Consumer behavior seems to be saying that the Touch is a device more for iPhone fans than people who are only thinking about options in the iPod family.

The chart below looks at traffic to the Touch, iPod Nano, and iPhone portions of the Apple site.

  • Interest in the iPod Touch was generally low, but probably got some momentum from the iPhone in July and August, surpassing traffic to the iPod Nano during both months.
  • Interest in the iPhone has been higher than the iPod Nano or the Touch since February, with especially strong months when the 3G was announced and launched.
  • Interest in the iPod Nano was strong throughout Q4 2007, and peaked in December, suggesting it may have been the most likely of the three devices to be considered as a gift.

Not only does the iPhone’s momentum seem to have increased interest in the iPod Touch, but those who have been interested in Touch are more likely to look into an iPhone.

  • iPod Touch researchers have been researching the iPhone an average of ~10% more frequently than they research the iPod Nano, even during the holiday season.
  • Cross-consideration seems to mirror the iPhone’s momentum in June and July 2008.

Will the momentum in iPhone interest and last week’s price cut lift the iPod Touch when it comes to sales from now until the end of the year?

Despite the iPhone’s popularity, consumers in the current economic climate may not be willing to shell out between $229 and $399 for an iPod Touch if they have the option of giving a Nano for $149-199. Then again, interest and momentum in the Touch could increase as the iPhone and other high-end mobile devices like it are sold at big box consumer electronics stores. In combination with the price drop on the iPod Touch, wide availability of the iPhone could open a new and bigger market for the Touch as a music and media player to grab market share from the Zune and the PSP.

Apple’s announcement last week might be bigger news than we think.

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