Analyst: Apple gave up iPhone sales to push iPod touch as 'mainstream Wi-Fi mobile platform'
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Analyst: Apple gave up iPhone sales to push iPod touch as 'mainstream Wi-Fi mobile platform'

"If the company is successful in this endeavor, it would provide a compelling upgrade path for the estimated 85 million people who already own iPods," Wolf says. "And it could attract new users to both the iPhone and the iPod platform as well. The company appears willing to risk the cannibalization of a significant number of iPhones to accomplish this."

Apple's decision to trade short-term losses for long-term growth of the iPod touch as a general device cost the company long-term profits since it meant losing as much as US$250 million in subscriber revenue shared from AT&T over two years, the analyst told clients. He added that, in his opinion, without the iPod touch, Apple may have sold as many as four million iPhones in the last fiscal quarter.

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