Forrester’s report on iTunes sales falling 65% in the first six months of 2006 has been disputed by a ComScore report which claims that sales increased by 84% in the first three months of 2006 compared with the same period in 2005, with an 80% increase in unique visitors.
Apple claimed that the Forrester report was ‘simply incorrect’, with Forrester standing by their claims, saying that the 65% figured was related to ‘seasonality’, or seasonal impact.
However it really sounds like backpedalling, as the Forrester report caused Apple’s share price to dip 3% and caused mild panic on Wall Street.
Apple has spoken of billions of sales through iTunes, but they also freely admit that iTunes delivers little to Apple’s bottom line – it is sales of iPods that matter most to Apple. iTunes itself remains the primary conduit for getting songs onto the iPod, whether ripped from CDs, illegally downloaded from P2P sites or purchased from the quasi-legal/illegal Russian mp3 site allofmp3.com or purchased through the iTunes music store.
It’s also the easiest way to subscribe to audio and video podcasts, and transfer video files that have been converted into an iPod compatible format. While third party methods to exist to transfer content onto the iPod, iTunes remains the only official and certainly the easiest way.
Given the amount of publicity generated by the Forrester report and now the contrary ComScore report, it’s quite possible a lot more people have delved into the iTunes store to have a look around and perhaps even purchase some content, although any spike from these reports is not yet public knowledge.
Apple have also had good success in selling TV shows and movies from the iTunes store, and while not in the same amount as music sold, still giving Apple enough clout to get more TV shows and movies on a regular basis.
This is especially important as Apple prepares to release the long rumoured widescreen iPod video, the first ‘true’ iPod video that is expected to be released at January’s Macworld expo, and the iTV service which will allow users to download content to Macs and presumably PCs running iTunes, and stream that content by Ethernet or wirelessly to their televisions.
When it comes to promoting the sale of music through iTunes, one thing is for sure: those iTunes pre-paid gift cards are sold practically everywhere, from supermarkets to corner stores. It’s a fair bet that millions will be sold in the lead up to Christmas, as it’s a relatively inexpensive gift to give or add to the gifts consumers will be giving their iPod owning friends this year.
While Apple are undoubtedly concerned about the report, having called it ‘incorrect’, I’m sure there secretly pleased for all the extra publicity. Who wants to bet that sales will end up increasing because of this kerfuffle?
