iPod Touch & the Mobile Market

For all of those seemingly astonished analysts (via 512 Pixels) mulling over the fact that Apple owns the mobile marketplace (even after the rise of Android OS’s footprint): how did you not see this coming? Not only does iOS still rake in the largest share of all mobile app purchases, but let’s not forget they also sell and rent movies and TV shows, and are still the number one retailer for music.

But while everyone talks iPhones and iPads, there’s a sneaky product that’s probably contributing to these numbers a hell of a lot more than most people would guess. One look around the families gathered at our Christmas tree this year and it’s evident that iPod touches are selling very well to the younger (and teenage) crowd. Almost all of my cousins currently owned one or received one for Christmas — and every single one of them received iTunes gift cards to spend on Apple’s digital stores. While setting these things up is a bit tedious (I helped two younger cousins get through the process of creating email accounts and Apple IDs), once everything is operational, it’s clear that kids grasp digital frameworks quickly — just hearing them discuss games and apps, how important reviews are, and maximizing the credit attributed to their accounts is explanatory enough to reinforce this. It’s also obvious, as a result, that Apple and its developers are making a significant amount of revenue from customers without credit cards tied to Apple IDs and gift cards. It’s a fantastic method for permitting young customers to access and purchase on a mobile marketplace without the need of a credit card.

The bigger problem for the marketplace is that, after five years, there is hardly any competitor to the iPod touch (or phone-less smartphone). And just like Apple dominates the so-called “tablet” market, they too dominate a market without valid competition: the phone-less smartphone market (which isn’t really a phone-less market when you factor in phone-enabling apps over wifi like Skype and Google Voice). If no one can manufacture a version of a smartphone without subsidies, then the marketplace really does belong to Apple. Apparently some have tried, but none have succeeded in denting marketshare. It’s certainly worse than the digital music player market that Apple nearly owned entirely with its iPods during the 2000s. And just like that market, they’re doing the same to the tablet and smartphone-less ones. Good luck to anyone who can marshall the financing and resources to take on these markets. At this point, though, it’d be wiser to carve a niche into somethign new.