Apple's iPod was 'Must-Have' Gift of 2006?

   Although some consumers looking for Sony's powerful PlayStation 3 video game console went home empty-handed and disappointed during the 2006 holiday season, many others were more than happy to pick up a Microsoft Xbox 360 or Nintendo Wii instead. But according to analysts at Hitwise, an online measurement firm, the "must-have" gift of the season wasn't a video game system, it was Apple's iPod, which was (and still is) in plentiful supply both online and in various retail stores.

This is the third year in a row in which Apple's line of MP3 players has dominated the sales charts, and Apple's iTunes Store saw a massive 413 percent increase in traffic between December 24 (Christmas Eve) and December 25 (Christmas Day), which isn't all that surprising. Customers who received iPods for Christmas no doubt began logging on to iTunes as they set up the devices.

A more telling statistic is that iTunes traffic rose 110 percent, year-over-year, compared with Christmas Day 2005. To put this figure in perspective, Apple made two software changes this year that might have artificially inflated the number of online visits recorded. First, iTunes software is no longer included in the box with iPod devices, so customers have to go online to get the software. Second, customers must visit iTunes to update their iPods, whereas last year, Apple included a separate utility with the devices for that purpose. In other words, in order to use the iPod at all, you now need to use iTunes first.

Hitwise also provided some equally questionable statistics about Microsoft's Zune, a competing MP3 player that was introduced in mid-November. According to the company, traffic to rose more than 1,000 percent on Christmas Day as compared with the previous Monday, December 18. Unlike the iPod, the Zune comes with all the software users need to connect and sync the device. However, Hitwise says that Apple's traffic during the same week was up 1,222 percent, and visits to iTunes outperformed visits to by 30 to 1.

What does all this mean? Not much, actually. Few will be surprised to discover that Apple's iPods sold well during the holiday season, and although Hitwise's numbers are interesting, Apple's official sales numbers--which will likely be announced at the company's MacWorld trade show in January--should prove more decisive. There's little doubt that electronics sales are still a major piece of the holiday season's sales pictures, but flat-panel TVs, video games, DVD movies, computers, software, digital cameras, cell phones, and other products all help complete a major part of that picture as well.

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