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Where are the iPod touch knockoffs?

The latest iOS numbers and the new iPod touch launch demonstrate what a huge hit the iPod touch has become. It’s safe to assume that about half of all iPods, or between 4 and 5 million units in the current quarter, are sold as touch versions.

The iPod touch has been around about as long as the iPhone. It was launched three months after the first iPhone 2G, almost exactly three years ago. While the iPad has been in the market less than six months, a large number of potential competitors have been launched running Android and there seems to be a real rush to market. Six months is about as quickly as any hardware product can be reasonably engineered.

So the question is why is the iPad being cloned while the iPod has remained in the market by itself?

The value of the iPod is arguably as high with a healthy margin and consistent pricing. The volumes are comparable with tens of millions already sold so there is no obvious economic disadvantage to the iPod vs. iPad. Indeed, the iPod touch is a large (1.6) multiplier to the whole iOS platform. The demographics are very sweet too with a clear upsell opportunity.

One explanation might be that the iPod is a music device and that market has been locked up with iTunes, putting up a huge barrier to entry. However during the music launch this month, there was almost no mention of the iPod touch as a music player while it was loudly touted as a game and app platform. Browsing and Facetime are also huge uses for the device.

So in the iPod touch we have a mini iPad–ironically, the dig at the iPad was that it was nothing more than a large iPod touch.

So if cloners are rushing to copy the iPad, why not its smaller incarnation?

  • Marcelo Garcia

    I was wonder what is the point of iPod Touch. Instead, why not go straight to iPhone? If I want to buy an iPod, I would go to the classic, with massive disk space or iPod Nano (the previous one) which is smaller and easier to carry.

    • http://lowendmac.com Tim Nash

      As Steve Jobs pointed out, the iPod touch is an iPhone without a contract. So a cheap pay-as-you-go phone + iPod touch, is nearly equivalent to an iPhone, but for much less. There are other advantages too, detailed in my article http://lowendmac.com/nash/09tn/year-of-the-ipod-t

    • michael

      If you can’t or don’t want to afford the respective contract. I use a prepaid phone and my university has free WiFi. Perfect for a iPod touch and – over the lifetime of the device – certainly more than 1000 € less expensive.

    • Your mom

      Also, for teens/children – if you don't want to pay for a cell phone for them, the iPod touch is great

    • Hamranhansenhansen

      > Instead, why not go straight to iPhone?

      iPod touch is 1/10th the price.

      > If I want to buy an iPod, I would go to the classic, with massive
      > disk space

      iPod touch has more music than a classic, because you can purchase music over Wi-Fi, listen to streaming music like Pandora over Wi-Fi, discover music on the Web, or make your own music with apps.

      > or iPod Nano (the previous one)

      No apps, no Wi-Fi, not very good for video.

      A lot of kids have iPod touch as their main computer. Sometimes people use an app so much they buy an iPod touch just for that app and turn it into a dedicated device. A lot of people get one to go with their Verizon dumb phone.

      • http://www.chrisdpratt.com Chris Pratt

        I think you mean 1/3 the price, but even that's a little off. The top-model iPhone (32GB) off-contract is $699. Even the lowest model iPod Touch is $229 with 8GB: roughly 1/3 the cost of the iPhone Apples for apples, the 32GB iPod Touch is $299, a little less than half the cost of an iPhone off-contract.

        Though, it certainly would be great if the iPod Touch could be had for 1/10th the cost of an iPhone. Then, it's only be $60-70.

      • RattyUK

        @ Chris. I think he was also counting the contract price. Not insignifcant over 2 years.

    • Tim F.

      I think just the opposite: why buy an iPhone when you can by an iPod touch. The carrier subscription is the least desirable feature of the iPhone. A $50 sub seems onerous with how little I use the phone. I want the mobile web but know that 80% of my usage would be within my wifi networks: home, work, all my friends's houses, even three or four of my local bars, coffee shops. I will miss mobile Internet when walking or driving, but then I'm usually with someone who does have it for quick needs.

      • Sigivald

        That's easy – because some of us actually need a telephone, and don't want two devices.

        The AT+T contract is, indeed, a pretty grim option, but it's better than no phone.

        There's a reason they sell like hotcakes.

      • Joe Rico

        Also, the iPhone has lots of uses that require a combination of GPS and cellular connection. I use mine all the time to find the nearest gas station, Marriott Hotel, etc. You can't do this on an iPod.

    • JulesLt

      There's a presumption that because Apple's margins are high, it should be easier for competitors to come in and undercut them, but we've seen that the costs for (say) the Nexus have actually come in higher than Apple.

      Unlike in the PC market, Apple have real scale in the music player and phone markets – and of course there is a lot of component duplication between the iPod and iPhone which will help that scaling even further.

      So far, rival products have basically had production runs in the tens and hundreds of thousands, vs a company that can confidently target ten million.

      Using Android equalises the playing field a bit – in that rivals can save on OS development costs – but not if you muck up that advantage by spending even more money on bringing 30 different phone models to market each year.

      But then, as we know, for most phone manufacturers, the customer is the network, not the user – their purpose is to pump out new models every 3 months or so.

      Where this will start to change is as Android devices become a bigger market, and also if the market consolidates onto reference hardware designs with case tweaks – once someone gets a single design selling ten million or so, then they'll be able to command Apple's level of discount.

      As the Android App market grows, that also increases the usefulness of a WiFi only android PMP – but the Android App market is undermined by high piracy, and of course the mentality of Android owners ('I can get the same apps for free on Android' as one told me).

      • Bob Thebuilder

        Very thoughtful observations. You hit the nail squarely on the head.

    • Random Commenter

      It's called Total Cost of Ownership. A smartphone will typically range from $1800-2600 for a two-year contract. An iPod touch can be had for around $200 and can function as makeshift phone with Google Voice, a Gizmo5 SIP account, and a cheap SIP app (like $3).

    • Ken

      "I was wonder what is the point of iPod Touch. Instead, why not go straight to iPhone?"

      I don't want a phone. I want a bunch of portable electronic devices. I want a chromatic tuner and metronome for practicing music. I want a clock and calendar for keeping track of events. I want a to-do list for taking to the store. I want a music player for listening to foreign language recordings. I want a calculator, for when I need to do some complex math. I want a camera, for when I need to take a quick photo. And I don't want to carry around 8 or 9 little electronic devices like I used to. I have no use for a cell phone.

      I don't see the iPod Touch as "an iPhone without the phone". I see it as a smaller Newton, or a Palm Pilot but done well. I bought a Palm way back in the day, thinking I could find or write apps, but they were hard to find and harder to write, and I never used it much. Today there's a ton of apps for the iPhone, and it's easy to whip together some HTML/JS to make my own (which also happen to work on all my other computers, too).

      Cell phones are annoying and expensive, and the fact that I don't have a telephone with me 24/7 is a *feature*, not a problem needing me to throw a thousand dollars (or more) per year at it.

      • yowsers

        I'm with you on most of that, but came out with a different conclusion.

        I look at the iPhone as a super iPod Touch (better cameras and range with 3G). The phone is free.

        I barely use the phone. Always been that way. But I have to have a number and a line available for the times I do require a phone (and when I require it, I *really* do require it — calls with family, job phone interviews, etc.)

        I have to pay for phone service anyway, and it has to be cellular, too (land lines are not an option since they became useless about a decade ago with all the telemarketers out there.) So I summarize up the iPhone this way:

        1. The iPod Touch portion is what I really paid $300 for.
        2. I don't count the cost of the phone service contract since I'd pay that anyway out of my personal "overhead" budget. This is an expense to me whether I got an iPhone or any other device.
        3. The phone portion therefore is free.

        Maybe not the most astute or correct analysis, but that's how I view it.

    • Claude Hénaul

      The iPod Touch is marketed deceptively. It is a small (Retina size) tablet, not per se a music player any more. Think about it: if your eyes are half decent, what can you do on the iPad that you can't do on the Touch? My 67-year-old eyes work just fine using the Retina display for tablet purposes. It is my favourite reader, for example, because the best reader is the one you have with you. My Tablet Touch (Touch Pad?) is always with me. Yes, I use it a lot for music too, but that is no longer its chief function. Nor, I believe, is it the role Apple has in mind for the device.

      I think the deceptive marketing is deliberate on Apple's part, to keep the device below the radar of would-be tablet competitors for a just a while longer.

      Strategy seems to be working.

  • http://lantinian.blogspot.com Nikolay Andreev

    For some reason the only thing companies are cloning from Apple are 3G enabled devices. There is no clone coming for the iPad. All Android android devices have 3G antennas build. No only that, they all preserve the phone functionally. At best the only thing they are cloning is the iPad 3G.

    The iPod Touch has always been the iPhone without the phone and has consequently remained unclonned.

    If I had to make a guess as to why this is the case, it would be that a 3G device is a lot more profitable and or sellable.

    If I had to make a guess as to why is that, it would be that only carriers have retail locations and store partnership. Only a Carrier can potentially market and sell a device since no one else but Apple has 300 stores and retail network that has nothing to do with Phones. Only Apple has the complete product distribution solution.

    If I had to make a third guess, it would be that Carriers are only interested int 3G (phone) enabled deices as only trough them can they make a profit. Consequently, no Android device would be sold if it does not have a 3G phone feature.

    If my guesses were correct then we would never see a iPod Touch clone as long as it remains 3G less. No one but Apple can create such a device and sell it with a profit.

    • http://www.asymco.com asymco

      Your guesses make a lot of sense. As usual, the culprit turns out to be distribution. With 3G devices, the vendors have distribution (carriers), without 3G they are at the mercy of a channel (consumer retail) that finds no value in yet another undifferentiated product.

    • Scott

      The reason Android devices have telephone features, I think, is because without them they can't pass Google's API test for Market certification. Ditto for rear-facing cameras. Whether these features actually make sense on the device seems to be a secondary consideration.

    • Kaleberg

      You are on to something. Apple is the only company selling smart phones that doesn't also own a phone network, so it is willing to sell an iPod Touch even if it doesn't have a contract. The phone companies are basically good old Ma Bell, except without the government forcing them to upgrade their technology on a regular basis. Why should they undercut their existing business? It would be like Sony selling a torrent box that would undercut their media division.

      Interestingly Palm, another phone maker without a network, was briefly selling a pre-iPod Touch called the Life Cycle or something. It had a full body screen, two orientations, WiFi, apps, played music and showed video, but no one had a clue as to what it was good for. Maybe if Palm had opened a media store it might have sold better, but Palm was focused on the phone market then.

  • Niilo

    I take issue with the initial premise of this article. You should get out more

    Plenty of devices competing to fill that space in your pocket:

    http://www.iriver.com/iriverplus/plus4.asp http://us.playstation.com/psp/twopsps/pspgo/ http://www.nintendo.com/ds

    Android hand-helds wihout SIMs coming thru, presumably with ability to install apps:
    http://www.engadget.com/2010/02/24/gogear-muse-rehttp://www.archos.com/products/ta/archos_43it/indhttp://enso-now.com/zenpad1 (yuk!)

    PS Actually love the blog; best writing on wireless space around.

    • http://www.asymco.com asymco

      There are some devices which compete with the iPod touch, but they are likely to come from existing MP3 player vendors. The odd thing is that the Dell, Samsung, HP, Acer vendors building iPad competitors were not motivated to take on the iPod touch. Or perhaps they did and I did not notice. It's been three years and their efforts may have simply faded away.

      By the way, a pretty solid list of Android devices with or without 3G is at http://www.pdadb.net. I found 33 non-cellular Android devices. Except for an unreleased Dell and another unreleased Samsung tablet none came from top tier phone or PC vendors.

      There are Airis, Viiv, 1und1, Archos, Ziss, MENQ, Eken, ICD, FirstOne and HOTT, SMiT, enTourage, Creative, Camangi and Archos.

      Not exactly well-known brands.

    • Drew Caster

      Niilo, can you send me a url for a *shipping* iPod Touch Clone running Android with apps?

    • Sigivald

      See, I own a PSP and a DS.

      And neither of them comes close to competing with an iPod Touch as a general purpose device. (Both are superior platforms for pure gaming, however.)

      The DS is a joke for anything but gaming. The PSP has more power, but lack of both a keyboard and a touchscreen makes it a bad, bad joke as an internet appliance.

      (And the "iRiver Plus4"? Not a product. It's software.

      The various iRiver products don't seem real impressive or nearly as well-reviewed. Like the P7? Costs $169 with 8GB, has useless software [according to CNET], and doesn't even have WiFi or bluetooth.

      (And it has a proprietary USB cable. Just like the iPod does, but without the advantage of being able to buy one anywhere because it's amazingly popular. So it's a negative in a much more dramatic way…)

      Yes, it's a lot cheaper than an 8gb Touch. And I'd feel ripped off, in comparison, if I had one.

      There's a reason they're not sweeping the market and putting Apple to shame – and crappy UI is it.)

  • http://lantinian.blogspot.com Nikolay Andreev

    Thanks for the question ;)

    I just did a follow up post on my blog and if indeed the Carriers are the only means of sucessfully selling an iOS competing device then the iPad WiFi would not see a competition anytime soon either. Only the iPad 3G will.

    So an android device only make sence if it has a cell radio otherwise there will be no one to sell it. That's a scary thougt.

    On another note, I did some calculations as well and it seams the iPod touch has already outsold the iPhone, even on total units shipped: 60 to 55 million. Can you double check that?

    • http://www.asymco.com asymco

      The way to find out current iPod touch total sales is to take 120 million iOS and subtract all the sales of iPhones and iPads plus whatever number of iPhones were sold during July and August.

      I'll write a post about this.

    • Sevket Zaimoglu

      Through which outlets do you think the likes of Sony and Samsung sell their PSPs, PS3s, digital cameras, laptops, LCD-LED-3D TVs and countless other consumer electronics goods? They certainly have many different channels to sell wifi only PMPs.

      • http://www.asymco.com asymco

        Those products are differentiated. Selling knock-offs is non-trivial. You have to find a retailer who is willing to associate their brand with what your product means to the buyer.

  • http://lantinian.blogspot.com Nikolay Andreev

    (quote)Plenty of devices competing to fill that space in your pocket(/quote)

    Competing with someone usually implies doing a siliar job. In the device market this has to translate info similar sales. Appe just put the combined sales of the DS and PSP at less than that of the iPod Touch just before it was refreshed. Strike that. Apple was selling a 2 Gen class device at $199. Now for $30 more you can jump two generations.

  • Jon T

    I have another explanation for you.

    PC manufacturers' existing bread and butter business is severely threatened by the iPad in a way not seen before. They simply cannot sit by and watch their low end PC market fall away from under them. Trouble is, the underlying concept of how we use these devices has been changed by Apple. And although they can clone, they have no answer to the Apple habitat issue, which will be big problem for them.

    Conversely, the iPod is a gadget that lives with iTunes. As no-one else has yet come anywhere close to re-creating iTunes their chances of significant success with an iPod touch clone is limited.

    • Gandhi

      That will all change once iOS 4.2 is released, which is a key update for two reasons.

      1) Consolidates iOS development across the three devices – iPhone, iPod Touch and iPad.
      2) The introduction of printing straight from the device and media sharing via Airplay, it is the beginning of iDevices dropping the Mac/PC umbilical cord.

      Other manufacturers ignore the iPod touch at their own peril. Will the iPod touch take the place of a full-fledged computer – even a PC? No. But by the sheer number of units sold, the installed base for iOS devices becomes so much larger that developers simply cannot ignore it.

      Also keep an eye on Apple TV. It is now running iOS on the A4 chip. Another device that increases the installed base. Apple is working on an SDK for AppleTV, make no mistake. It is just not ready for prime time yet, but it is coming.

      • r00fus

        AppleTV + SDK (ie, an App Store target) will be awesome, but what about the Nano… right now it's not appealing to me, but with iOS App Store (even if it's a limited selection), it would be a game changer.

      • Tom

        Also, a nano with face time.

    • http://www.ecolojic.com Joshua

      I think you might be right, Jon T. The response of the manufacturers to the iPad is based on fear and protecting revenues. The iPod touch didn't originally generate the same fear. Now that is is less a music consumption device, and more of a media/games machine, it too is becoming more of a threat.

      I'd say they'll start moving into this space too soon, but their primary fear is the paradigm shift that the iPad has caused.

  • FalKirk

    First, great question. I've been wondering why Apple's competitors were letting Apple have the iPod Touch market all to themselves.

    Second, in response to Niilo's well researched post indicating that the iPod Touch does have competitor's, I would beg to differ. At least for purposes of this discussion I am looking for a competitive product that provides a one-two punch like the iPod Touch/iPhone combo. The competitive product needs to run the same OS and share the same apps, at a minimum. If such a product exists, I have never heard of it. That, in and of itself, should speak volumes.

    Third, the answers as to why there are no iPod Touch equivalents on the market seem to be: a) iTunes and b) distribution.

    iTunes resonates very differently with the iPad, the iPhone and the iPod Touch.

    With the iPad, iTunes is useful for content viewing and content management, but it is seldom used for content listening. On the iPad, iTunes is useful but not essential.

    With the iPhone, iTunes is useful for content listening as well as content viewing and content management. Content viewing and content management are nice to have, but content listening is the essence of iTunes. On the iPhone, iTunes is all but essential.

    Please note, that I said “all but essential”, not “essential”. I think the fact that Android phones survive and thrive without anything close to an iTunes equivalent is proof that iTunes, as nice as it is, is not essential for the survival of an App Phone.

    With the iPod Touch, iTunes is either essential or as close to essential as it gets. If you want iTunes alone, buy an iPod. If you want iTunes and the App Store, buy an iPod Touch. Could the iPod Touch survive if it only had access to the App store? Survive, yes. Thrive, probably not. The same can be said for the iPod Touch’s potential competitors. Can they thrive without an iTunes equivalent? Probably not.

    The second barrier to entry for iPod Touch’s competiors is distribution.

    Apple has their own stores. They can do what they want.

    Android has primarily used the carriers as their distributors. The carriers have no interest in promoting a device that does pay a monthly subscription fee for their services. This means that the carriers have no interest in carrying a WiFi only device like the iPod Touch.

    (As an aside, this analysis applies equally to potential iPad competitors. The carriers have no interest in distributing a WiFi only tablet. This means that any tablet that the carriers do distribute will almost certainly come with a contract and a subsidized price. While the subsidized price may prove to be an advantage, the contract will also prove to be a disadvantage.)

    For Apple’s iPod Touch (or tablet) competitors to have success with a WiFi only device, they need to use distributors other than the carriers. While many companies have fine distribution systems, the removal of the carriers retail stores, advertising dollars and general advocacy is a serious disadvantage to Apple’s iPod Touch (and iPad) competitors.

    Thoughts?

    • http://www.asymco.com asymco

      This is a thoughtful analysis. Thank you for posting it. The answer is not a single reason. From a higher elevation, what may be happening is that the iPod touch is "asymmetric" enough to the expectations of both the major device/PC vendors but also to the platform vendors (Microsoft and Google and even Symbian). The iPod may be the most disruptive product in Apple arsenal simply because it's the one that invites everybody to ignore it. Note the relative "underperformance" along dimensions of power that demanding users expect, while being a great solution for the less-demanding younger users.

      • Vik

        Further, isn't it required by Google in their TOS for using Android that to access their app store there MUST be 3G on the device? So you can install Android on the device but you aren't allowed to hit the Android app store. I am not sure about that but I believe it to be the case – which is why the latest Samsung Galaxy Tab has no WiFi only model.

        That probably explains why there is no competition. Itunes and the ability to get songs and games over WiFi is the driver .

      • jimbo

        I agree with your assessment that the iPod sort of flies under manufacturers radar. As a dyed in the wool geek, I would have expected the iPods to have died off years ago, yet they are selling incredibly well. Having access to the App store gives it a formidable advantage of the remaining competing mp3 players on the market.

        I know lots of young people (my college age kids friends) who have iPod touches which they use for web use and games while using a cheap phone for texting and voice calls.

        Also consider that many of the android phone manufacturers rely on telcos for distribution as well as subsidies – note the number that were given away free with the buy 1 get 1 type offers.

        Most of these manufacturers are not really concerned with R&D in coming out with the next greatest thing – they just need to crank out new models as quickly as possible. Hence are they really going to be focused on bringing updates the the already sold units? I think not.

        The large PC companies – Dell, HP whatever have slashed their R&D budgets in the race to the bottom, and are too busy playing catch up to come up with anything really innovative. MS is at least giving it a shot, but they have been in this game a really long time and have not really shown real leadership in smart phones despite years of experience.

        Also, does anyone still buy a Zune?

        Now with the new iPod touches having Facetime as well, I can see iPod sales really taking off.

        All these sales stats so frequently reported in the press don't seem to take into account that iPod touches run IOS too. They just record the iPhone sales vs Android and blithely ignore all else. But I'll bet dollars to donuts that the subtlety is not lost on game and other app developers. Do they care whether their customer has a phone or an iPod? I think not.

  • RobM

    First of all, thanks to asymco.com for producing this fantastic blog!

    Secondly, regarding the iPod Touch, I would like to suggest where the largest demographic market is: children and teenagers under 18 who are typically not allowed to own a credit card and therefore an iPhone. If you cant get an iPhone, you get an iPod Touch!

    What is great from Apple's viewpoint is they are catching their future iPhone owners as 12 year olds!! These kids are growing up with multi touch and app store etc. In my 10 year son's class one

    • yowsers

      Outside of teenagers, I've met a number of adults who got the iPod Touch as their cherished entertainment device, and used the cheapest and dumbest of dumb phones for their phone requirements.

      Of course, many do it for carrier reasons (practical or political), but some had no issues there. The cheap dumb phone allowed them super-cheap plans and flexibility, while the iPod Touch would be a more personal device for them that would outlast any carrier contract. The iPod Touch was nowhere near as mercenary a device as a cheap dumb phone is.

      It's not how I view it for my needs (phone and iPod — all good by me), but I have seen it in others.

      • E

        I am a 40 something, and I have an ultra-cheep dumb phone and an iPod touch. It's the perfect combination. Then I bought an iPad, and I never use the iPod touch any more. Hmmmm.

      • Seppl

        @E i had the same problem with my iPod touch – didn't use it that much after I got my iPad. But then I started to use it as a sort of digital Swiss-knife (alarm clock, listening to music, calculator, pocket calendar, skype-phone, note taking… Sometimes even for "multitasking" along the iPad).
        also it's a cheap iPhone alternative for mobile web-browsing if you jailbreak it and tether it via bluetooth (ibluever) to your mobile phone.

  • RobM

    I continue…..

    One third of the kids have Touches. And they ALL want iPhones.

    My guess for the iPod Touch focus on gaming is that Apple can see that it is kids that are driving this market!

    Rob, Copenhagen

    • http://www.asymco.com asymco

      Completely agree. I referred to this in the article as "The demographics are very sweet too with a clear upsell opportunity."

      • Yowsers

        I recall somewhere in the year or so following the iPod Touch's release that some of their vendors had to get the message across to Apple execs that "You guys don't know what you have here — you have an incredible gaming platform.". It was a surprise to them, but they seem to have quickly adjusted.

        I wish there was more details of that forthcoming, because I bet it's an interesting story.

        In the meantime, the list of industries and companies deeply threatened by iOS keeps growing.

  • Famousringo

    Archos just announced a line of Android 2.2 powered "internet tablets," including a few SKUs aimed squarely at the Touch:

    http://www.archos.com/

    They have a few advantages over iDevices, and a few drawbacks. They're competing as well as a small company like them can. I have no idea why the big electronics firms are blind to the pocket computer market. Perhaps they feel that after ten years of trying, the iPod is unnassailable.

    • http://loewald.com/blog Tonio

      I visited the archos website. Embarrassing typos in the website copy and products in the store don't match those in the content pages (e.g. the Archos 7D in the store looks physically different from that in the content pages). This hardly seems likely to engender confidence.

      I think if you go back to the original question, "credibility" needs to be a factor. Everyone and their best friend has tried to clone the iPhone, and they're all rushing to clone the iPad. But no-one credible has tried to clone the iPod Touch.

    • Jesse

      The Archos tablets do not have access to the Android Market, which is controlled by Google.

      In fact, there's not a single non-3G capable device with access to the Android Market. This is contractually enforced by Google itself which is why you don't see any mainstream companies releasing Wi-Fi only Android 2.2 devices.

      We can only speculate as to why Google has this rule but my guess is that it has something to do with the carriers.

      • Sevket Zaimoglu

        I think it would be a trivial matter to install Android marketplace to the wifi only devices, as marketplace is nothing but an app itself (around 500KB download and named something like market.apk). In any case, since the user can choose to install apps outside the Android marketplace (Gameloft games are not in the marketplace at all), downloading and installing apps should not be a problem.

        If you think it will not be possible to install any app on the wifi only Android devices, whether they are obtained from the market or not, I would find it very hard to believe, since I don't know how that could be done.

    • Tom

      I believe that all Android devices that do not have access to the Google Marketplace are dead in the water. There are possibilities to get around this, but only a niche audience is going to be willing to try this.

  • Archagon

    Uh, what about the Zune?

    • http://www.asymco.com asymco

      The Zune HD is perhaps the only example of an attempt at replicating the touch with a similar product. It was released a year ago in the US only and very little has been heard about it since. I checked and there are no sales figures of any kind about it.

      One point about it is that the apps for it are rare indeed. It launched with 9 apps and there are less than 100.

    • Random Commenter

      Correct. The author forgot Zune. It is indeed a competitor to the iPod touch, albeit quite feeble in terms of sales and market penetration (being limited to the United States).

  • Eric

    There is a MAJOR competitor to iPod Touch, but everyone just can't remember it. That is "ZUNE" by Microsoft which is only in U.S. market. The reason was unknown.

    • Hamranhansenhansen

      It's true, the Zune HD was an iPod touch clone, but it sold in low numbers worthy of its name. I don't think they are still making them.

      • Archagon

        Nonetheless, the Zune OS appears to be the basis for Windows Mobile 7, so it's still pretty important.

    • Yowsers

      By "MAJOR" you mean MSFT, yes? Because Zune certainly isn't…

  • http://literalbarrage/org/blog Doug Stewart

    I have a slightly different take: it's all about the 3G, but not for the reasons you'd think.

    Android is, as a rule, a segregated marketplace when it comes to the hardware. There is NO reference device, no gold standard. Some devices have large screens, some small. Done have keyboards, some don't. To date, though, the unifying thread for all Android devices has been always-on network connectivity.

    So, if you're an Android dev, the only thing you can count on is network access. Thus, you rely upon it as your touch point, your best selling point — my app can talk to ANY other Droid device out there!

    At least, that's my theory.

    • Hamranhansenhansen

      I think you are close but missed the mark.

      The unifying feature of Android is not 3G, it's *carriers*. Android devices are carrier devices. Carriers call all of the shots. They sell all the devices. The software is a commodity, and the hardware is a commodity, and they both exist entirely to enable the carrier to sell a phone plan with 2 year term, $75 per month bill, and $375 termination fee. The biggest brand in Android is Verizon Droid. Some Verizon Droid phones were made by Motorola, and some by HTC. They have 2 or 3 different user interfaces. They have various versions of Android. Doesn't really matter. As long as it connects to the voice network with a dialer and data network with a Web browser and text messaging then job done. That is why the quality and usability of Android is so bad. When you come back in 2 years, the carrier will sell you the network again and they don't care what phone you pick at that time.

      So the reason there is no Android iPod touch is carriers don't want to sell you a device that gives you a reason not to buy a smartphone.

      With Apple, they will make the device, the experience, the software and support the best they can and constantly make it better because they want you to pick another Apple device in 2 years. With Apple, the software and experience are valued, and the network is the commodity. Any Wi-Fi network will do. Any open carrier network will do. That is why all iPhones are SIM phones.

      So Verizon is not interested in selling you an Android iPod touch because that is just the commodity parts. And Apple is not interested in selling you an iPhone with Android and Verizon networking because that is just the commodity parts.

      • poru

        That about sums it up. Harsh verdict on the carriers but they deserve it. The fact that they continue to sell Android devices with obsolete OS (not to mention the Dell Streak, what's with that!?) and poor or nonexistent upgrade paths to the latest OS is damning. They just care about the monthly $$$.

      • Henry S Levy

        I'm convinced that Android is subsidized by the carriers. Think of the direct and indirect cost to Google of Android:
        Cost of development distribution and maintenance.
        Strain on working alliance with Apple.
        Brand value- think of the difference in reputation of Android vs. GoogleWorld, Google search and Gmail.
        Patent liability.
        Not licensing Android for wifi.

        These costs arenot justified by the revenue stream from mobile advertising for the foreseeable future. The carriers make a fortune on each handset sold. I phone subsidies prove it is worthwhile for them to pay for them to share the spoils.

        I don't know if the carriers intend to pay Google thru Providing an express lane on the information highway or another source, but this is the only way that Googles investment in Android makes sense to me.

      • Joe, Winfield IL

        Doug, I think you're on to something here! Consider the fact that Android is a Google product. Google has spent untold dollars and resources developing this software, with no direct revenue. The only way they can monetize this effort is with advertising revenue. Google will allow non-3G devices to be made; this will allow Android to power the smart devices of the future (dishwashers, thermostats, coffeemakers, etc.) These appliances are fine with wi-fi because they are stationary and because they aren't consumer communication devices. The alternative to an Android toaster is not an iOS toaster.

        The iPod touch is designed to go with you. If Android products are to be used in this manner, they need to be connected. GOOGLE DOESN'T MAKE MONEY ON ITS PRODUCTS IF THEY AREN'T ON THE INTERNET! The Android Marketplace is pretty much required on entertainment devices if they are to sell. Withholding the Marketplace is Google's way of keeping their software free and open, while still using leverage to keep the device makers in line with Google's objectives.

        This would explain both the absence of wifi-only tablets and the lack of an iPod touch. Distribution is a secondary concern. I think the big guys could get their products onto store shelves at Best Buy and the like, but they'd be responsible for 100% of promotion. The lack of differentiation would be a problem, but someone could theoretically go whole hog into developing their own brand on a commodity platform. The first to act could probably get some share. But to do it without the full Android experience is nearly impossible.

  • http://blog.tonyscida.com Tony

    Given the size of some of the Android tablets, maybe they are aimed somewhat at the iPod Touch market. The recent Samsung tablet seems much smaller than the iPad.

  • Toby

    RE: iPod Touch clones – is it possible that few companies are able to offer such a device at the prices that Apple can build them? Apple reuses a lot of parts from the iPhone and that helps Apple get lower prices overall thru volume discounts and reuse of designed components.

    The iPod Touch helps Apple lower the cost for both devices – the iPhone and the iPod Touch, which building a synergy for bringing customers into the fold as iPhone users as their disposable income increases.

    I was under contract recently with another carrier, and figured it was cheaper to buy an iPod Touch and use that as a second device for a few months than to break my contract early. I had a bunch of apps read to transfer when I got the phone, and a lot of experience that convinced me I would enjoy the phone too. A great way to "try" out the Apple ecosystem without the trouble of porting your number and getting big bills etc. I already had an iPod classic, but that is just getting a toe wet in comparison.

    I'd bet that most heavy iPod Touch users would love to use their devices as phones too. Either they get bad phone service in their areas, like the larger capacity drives of 64GB iPod Touch, still under contract with another phone company, or don't have the current income to get an iPhone with data plan. Lots of reasons, but most of those reasons should evaporate over time as Apple adds carriers, capacity, service improves, and possible people get older and make more money versus still in school (most iPod Touch users skew under 25 years old).

    I agree, most competitors would not have the distribution or the fan base of people upgrading from earlier models of iPods.

  • Panamajack

    On the surface, it looks like a simple question of margins: the iPhone (and all similarly equipped smartphone competitors) have obscene margins compared to the iPod touch.

    Tablets offer something similar to phones with potentially lucrative dataplans, carrier subsidies, and corresponding high margins. Apple's competitors just aren't prepared to play a netbook-type price war with the iPod touch it seems ….. too bad.

    • Hamranhansenhansen

      > Apple’s competitors just aren’t prepared to play a netbook-type
      > price war with the iPod touch

      They already did that with iPods in general, and they lost badly.

  • macorange

    The only reason Android got any significant traction is that large segments of the market couldn't get the iPhone without switching carriers. The iPod Touch has no similar dynamics: anyone can go out and buy one without any switching costs. So why buy anything else?

    That's the number one reason, and the second is the carriers participation, not only in distribution, but marketing. And the phone refresh cycle: most everyone gets a new phone every two years.

    An Android non-phone doesn't have any of these advantages. Non-3G Android tablets will be in the exact same boat. Why buy something other than the iPad unless its WAY less expensive?

  • AlfieJr

    i think the comments above have nailed the two key factors for the iPod touch's unique status:

    - the all purpose iTunes media/game/app and more store. it is still the biggest and most widely used, no matter what criticism. and if you already use iTunes, the touch "just works." the competition simply can't match this ease of use and installed base. MS tried with the Zune+Zune store with very limited results.

    - the Apple direct to consumers sales/service setup. absolutely no one else has anything like the Apple retail store chain. Best Buy, Target, et al aren't comparable sales venues at all. and as noted by several, the Android OEM's mainly rely on the telcos, who will only sell stuff in their stores that require their services. where does one go to get hands on with Archos products? i have no idea … who does?

  • JPM

    An iPod Touch-type device is probably not profitable enough at the price you can sell it. Even Apple seems reluctant, is careful to keep it under iPhone standards, so that it does not compete too much with it.
    If iPod Touch had a 5 MP camera + flash, I'd immediately go with that + dumbphone.
    I think they released it in the first place because they did not anticipate iPhone's huge success and wanted a device to get people familiar with the new OS. Now they use it as a vector for FaceTime.

    • http://www.asymco.com asymco

      I can assure you it's profitable for Apple. It's nearly 50% of the unit volume for iPod and it has been responsible for increasing the average selling price for the iPod line. The result has been a steady or rising iPod sales total while units sold has been declining.

  • Woochifer

    I think the reason behind this is a lot simpler. The tech world is obsessed with the latest and greatest, and the perception is that portable media/MP3 players are passe, yesterday's news.

    Never mind the fact that the iPod touch functionally blurs these lines by serving as a wi-fi device, media player, PDA, et al — basically a smartphone without the phone. But, the tech press and analysts reflexively shoehorn devices into tidy categories. They see smartphones and tablet devices as the big growth markets and shower those segments with attention and blanket coverage. Because the iPod touch is considered a portable media player, no one wants to touch it since it occupies a device category that techies routinely deride as old and tired.

    The portable media player market is a mature market. It's no longer a huge source of revenue growth, and in mature markets, devices become commoditized. Apple avoids this by extending the platform and functionality, which adds value to the device and keeps the margins high. The only way to compete in this market is to invest in it. Apple is able to leverage this by tying iPod touch development to the iPhone.

    It would be expensive for other existing MP3 manufacturers to do the same thing. They might consider it worthwhile if the portable media player market still had the explosive growth rates from five years ago. Indeed, the iPod touch still enjoys significant sales growth, but it's still categorized by analysts as simply a media player. That's why so many tech articles about iOS ignore the iPod touch numbers.

    If another company wanted to come up with an iPod touch clone, they would have to overcome the perception issue. Analysts would hammer them for investing in an obsolete product category. Tech bloggers and reviewers would chide them for making a backwards move.

    Just look at the beating that Microsoft has taken with the Zune. It's really the only new media player competitor that has launched over the last few years. Even though they want to tie it with Windows Phone 7, it's still too little too late.

    The reality is that there's still money to be made if someone wants to create an Android derivative without the phone functionality. But, everybody wants to catch the rising wave, and an iPod touch competitor doesn't fit that mold.

  • Mark H

    Great blog and fascinating discussion. If indeed Android-based devices must be carrier supported to gain traction in the market, then there is little chance an Android tablet will have success in the enterprise where the iPad appears to be making inroads (hospitals, car dealers, restaurants, etc). There is no upside to having 3g if you already have wifi in place.

    • http://www.asymco.com asymco

      Good point. Carrier-shackled devices have been notoriously difficult to sell into enterprises in large volumes. Even RIM had to give up and go consumer to maintain any semblance of growth.

  • Gandhi

    Non-3G Android devices will not have access to the marketplace – the carriers will never let them. And Google is so worried about Apple decimating Google's internet search lead that it will bend over backwards just to ensure Android devices are sold (http://www.businessinsider.com/heres-how-apple-is-beginning-to-destroy-googles-core-search-business-2010-9).

    Apple is moving away from Google for their backstabbing. RIMM is looking to buy a mobile search advertising firm. Microsoft already has one. Apple has iAd. The mobile device internet search landscape is not the same as PC internet search.

  • Abhi Beckert

    Do you not have major electronics stores in the USA? I live in a small australian city, we have two apple resellers (not apple stores, just resellers) and a huge range of electronics and department stores which sell iPod touches. Too many to count. I think all of them would sell a wifi android device, if there was demand.

    But who would buy one? There aren't enough geeks around. We only have one or two stores who sell kindles, and the don't seem to do very well (unlike iPods and iPads, which are flying off the shelves almost faster than they can be restocked, multiple shipments arriving every week).

    Android doesn't have a good enough gaming/music/app catalogue to be attractive to the mass market. That's why no one wants to sell them.

    • http://www.asymco.com asymco

      Anomalies are really interesting. This discussion has been very fruitful to uncovering some of the real reasons why Android exists.

  • Andre Richards

    Honestly, it's probably something as simple as branding. Apple's competitors are largely made up of companies with executives who are not comfortable thinking too far outside the box and from their point of view, the battle is over. The iPod is to music players what Windows is to PCs. It's done. From their uninspired point of view, there's nothing left to fight for. The branding war is done. People want iPods.

    I'm not saying all that is true, btw. I'm just saying it would take a company with the kind of creativity and borderline insanity that Apple routinely displays to figure this out and get a wedge into that market. Someone needs to come along who can upend the entire market and turn Apple's game on itself. Someone out there may have an idea about how to do that, but clearly no company is willing to stick its neck out that far to try.

  • Jindo Fox

    @Chris, who said "I think you mean 1/3 the price, but even that’s a little off."

    What good is an iPhone without a contract? AT&T is $70/month at a minimum.

  • Gopiballava

    What percentage of iPods are bought by the people that use them, vs. gifts?

    When you're buying somebody a gift, can you buy them a device that is a "better deal"? Can you explain to the gift recipient that the Toshiba device was way better than the iPod, and cheaper?

    (this doesn't assume that the iPod was actually the worse deal, just asking about human behaviour)

  • Pingback: I believe it is because of Android that there is no iPod touch « A Man With A Ph.D.

  • BMC Austin

    It's two days after the new iPod Touch announcement, and my 6-year old is already hammering me for it. He says all of the kids in his first grade class want it, too. First grade. He's excited about FaceTime, videos and video games.

    If this thing is the monster success that I suspect it will be, then legions of kids' first phone will be a FaceTime iPod Touch. They will grow up using WiFi video calling. It's fascinating to contemplate the implications of THAT.

    • Neil Anderson

      My nine-year-old hammered me enough to place a pre-order for one. And a new Apple TV, too. :)

  • Z

    Looks like EVERYONE here missed the galaxy player 50 announced alongside the tab.

    http://www.engadget.com/2010/09/03/samsung-galaxy

    • http://www.asymco.com asymco

      Fascinating. As an Android PMP how does one manage and sync one's video and music collection?

      • Z

        Most Android Manufacturers make a third party sync software and Samsungs no exception. There are also third party solutions like Doubletwist. For the lazy you could always just dump the stuff on the device in mass storage mode, and let the media scan/tags take care of the rest.

        Leaks about the next version of Android, Gingerbread say it will get official desktop sync software, so it won't be so hectic in the future.

  • Jkronen

    One more thing (so to speak):

    The new Touch will function nicely as a Skype phone, thanks to the Facetime mic. That's another huge category it will have all to itself.

    So will it finally work with a Bluetooth earpiece?

    • Gandhi

      It has bluetooth 2.1+EDR

  • Ken

    I'm actually considering buying a new iPod Touch this weekend (not my first iPod, but my first iOS device). In the interest of looking at the competition, I tried to find a similar Android device. Recently I found myself in a car with a bunch of Google engineers, who couldn't stop talking about Android, so I asked them simply: where can I get the Android version of an iPod Touch? Their answer was equally simple: Android is open source so you can build it yourself.

    If you look past the obvious interpretation of this response (i.e., "go $#!@* yourself"), I think what he was suggesting is that Google engineers get free Android phones just for working at Google (so device cost isn't an issue), tend to make a lot of money (so paying thousands of dollars for service is no big deal), and work in major metropolitan areas (so cell coverage is good). They're all hardcore engineers, so to them there's no point in a device with fewer features, and from their perspective there's no need to build such a device, anyway.

    As for why there's no Palm Pre Touch, I have no idea. Maybe there's something similar at work. I know someone (a Mac user, interestingly) with a Palm Pre and he raves about the OS, so if I could get one without the phone and slide-out keyboard, I'd probably be looking to buy that, instead.

  • Jim

    We don't see them because Verizon (et al) won't pony up cash to put their name on the front of a device that won't give them a continuing revenue stream, and that means the easy sales channel is gone. Take those two out and the obvious route to profit is gone.

    Apple knew what revenue stream they could count on from day one via earlier iPods, and the app stream became juicy gravy on top of that.

  • Yowsers

    not sure if asymco posted any rules of the road here but based on the standard posting I would think "keep it intelligent" and "keep it civil" would be 2 such.

    • http://www.asymco.com asymco

      That's correct. I have is zero tolerance for lack of civility.

  • http://nbergus.com Nick Bergus

    What about Nokia's flawed "Internet tablets," the N800 and N810? Market failures, sure, but a similar idea, no?

    • http://www.asymco.com asymco

      Sort of. The Nokia tablets were not much more than experiments and attempts to understand the market. They were positioned as internet tablets and not much else.

  • Pingback: Where are the iPod touch knockoffs? | KevinUrrutia.com

  • poru

    I am looking at tablet alternatives (i.e. cheaper) to the iPad for a possible hospital project and stumbled across an ad for the following at the respected and popular The Register technology site:

    Android Tablet PC -aPad- MID – Wifi -7"TFT Touch Screen – Rockchips RK2808 Processor- 600MHZ – 2G- ARM 11 (SMQ5453)

    (web site

    The price for the "aPad" (original name!) is USD 145 and the manufacturer's web site is lightinthebox.com in China. The page lists buyer and user comments and questions. Two recurring questions were "what version of Android does it run" and "can the OS be upgraded?" Presumably for hardware or chip reasons it ships with Android 1.5 (or 1.6, a bit confusing) but cannot be upgraded beyond 1.9.

    There seems to be a lot of interest but basically you get what you pay for. (Smaller screen, plastic casing, 2.5 hour battery life, obsolete OS…) The $145 price for a 7" tablet presumably indicates a rock-bottom price for touchscreen devices.

    • yowsers

      What usage do you anticipate? Will you develop your own software, or do you plan on purchasing or downloading it? S/W availability will govern which machine you buy.

      FWIW, what little I've heard of physicians using touch screens is that they were already using the iPhone with patients (with software from App Store and other places is ready to go) and simply switched to the iPad when it became available. You couldn't pry the iPad off of them if you tried. Usability and adoption by key stakeholders (healthcare workers, physicians) will have a lot to say about the success of your project.

      Considering the costs of many things in hospitals, $500 isn't that much, btw.

      Consider the Blackberry, for example. People count how many BB's are sold to enterprise. Next time you're in a meeting, ask how many people have been issued BBs, and then ask how many people have stopped using them, or use them merely as a paperweight. Better yet — *don't* ask them. Instead, go to IT and check on usage. You'll probably get a more accurate read on it.

      My guess is that there is a not-insignificant "paperweight budget" that comes out of IT, but which IT doesn't properly account for. That paperweight budget is comprised of all the BBs that are issued and then get dumped into a drawer for the life of the contract.

      I haven't seen any figures, but I'd bet that the paperweight budget coming from iPhones would be almost negligible.

      Cheap Chinese knock-off tablets at $145 may look cheap as a tablet, but that's still expensive for paperweights IMHO.

      • poru

        Well I'm a firm proponent of the iPad and many of the docs and nurses already have iPhones of course, but in the interest of "due diligence" we need to research alternatives. A previous hospital "mobile IT solution" used a Windows Mobile 6 handheld with a stylus that cost £700 or USD1000 (roughly) so either ipod touches or ipads would be cheaper!

        One issue however is preventing the device from being stolen and the Apple kit is obviously more desirable than some cheapo Chinese ripoff ;)