iPod Touch's Holiday Sales Spike Likely Beat the iPhone's

Ever since Apple (AAPL) introduced the iPhone in the summer of 2007, it has been hailed as one of the most revolutionary products in tech history. By comparison, the iPod touch, which has all the iPhone's features without the cell phone, has been downright publicity-starved.

But this holiday season, it seems the thinner, cheaper device may be Apple's breakout hit. While actual sales data are not yet available, Broadpoint AmTech (BPSG) analyst Brian Marshall figures iPod touch sales soared more than 100%, to 7.2 million, in the final quarter of 2009, while iPhone sales rose 53%, to 11.3 million.

For further evidence of an iPod touch boom, check out the data from Flurry, which makes analytics software embedded into thousands of mobile applications. While the number of apps downloaded onto iPhones rose 29% from Dec. 24 to Dec. 25, downloads onto iPod touches skyrocketed by more than 300%—and surpassed the iPhone for at least that day. "It wasn't just that the iPod touch barely squeaked by," says Flurry Vice-President Peter Farago. "It blew the doors off the iPhone—and overnight."

The iPod touch can do pretty much anything an iPhone can do, and for a lot less money. It features the same slick multi-touch interface and can run almost all the 100,000-plus programs in Apple's App store. The main difference is that the iPod touch does not work over cellular networks, so owners must be within striking distance of a Wi-Fi hotspot to go online or download apps. But Wi-Fi is available in most homes, offices, airports, and coffee joints, either for free or for a few bucks—but it costs nowhere near the monthly $100 of an AT&T (T) contract.