iPod Touch numbers swell, cannibalize older iPod sales

The figures back up Apple's reasoning that the Touch is its 'netbook'

There are almost as many iPod Touches -- 11.5 million -- in the U.S. as there are iPhones, according to estimates by mobile advertisement server AdMob.

The numbers put some teeth in Apple CEO Steve Jobs' contention last year that the iPod Touch is the company's de facto netbook, said one analyst.

"The Touch is in the same broad category as netbooks," said Ezra Gottheil, an analyst with Technology Business Research. "But it's more than a netbook. It's also a cool game platform and a social networking platform. That's what makes it such a great buy, especially for the teen and young adult market."

On Tuesday during Apple's quarterly earnings call with Wall Street analysts, Tim Cook, the company's chief operating officer, said that the combined global installed base of the iPhone and iPod Touch was 45 million. With previous estimates of total iPhone sales at 26.4 million, that left the Touch holding down a base of 18.6 million. Gottheil said that estimate's breakdown between the two -- 59%/41%, with iPhone dominating -- was in line with previous assessments of the devices.

AdMob used the iPhone/iPod Touch installed base in combination with June data from its ad network to estimate the numbers of each device operating in major markets, such as the U.S., Canada, Germany, France, the U.K. and other countries.

Its conclusion: There are approximately 13.25 million iPhones in the U.S., versus 11.5 million iPod Touches, making the ratio 54%/46%, again in favor of the smartphone.

Sales of the iPod Touch soared last quarter, said Peter Oppenheimer, Apple's chief financial officer, in the Tuesday earnings call, and were up 130% compared to the same period last year.

"The iPod Touch is clearly important to Apple," said Gottheil. "Without it, iPod sales would have been really dismal." As it was, even with the Touch included, iPod sales overall were down 7% year-to-year.

Gottheil pointed to hints dropped by Apple executives about the iPod Touch's importance. "For the first time, they're beginning to talk about it as a different type of cat from the iPod media players," he said, referring to comments by Oppenheimer.

"We have three categories of what we call 'pocket products,'" said Oppenheimer Tuesday. "Traditional MP3 players, iPod Touch, and iPhone. For traditional MP3 players, which includes Shuffle, Nano, and Classic, we saw a year-over-year decline which we internally had forecasted to occur. This is one of the original reasons we developed the iPhone and the iPod Touch."

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