February 23, 2012

Halo effect moves from iPod to iPhone

The halo is back. Only this time, Apple says it’s casting a much wider reach.

If your interest in Apple dates back at least a decade, you may remember the concept of the iPod Halo Effect. That was the term used to describe the phenomenon where iPod consumers–many of whom were buying their very first Apple-built product–became so taken with the music player that they started spending their hard-earned cash on other Apple offerings.

Consider for a moment a stat Apple trots out each quarter when it announces its financial performance–that around half of the Macs it sells through its retail stores are to customers new to the Mac. Apple first began to highlight that trend around the same time iPod sales began their stratospheric climb. Another noteworthy stat: Apple shipped 746,000 Macs and turned a profit of $38 million for the fiscal first quarter of 2002–the first quarter in which the iPod began shipping. By the fiscal first quarter of 2009, when quarterly iPod sales reached their peak, Apple was selling 2.5 million Macs and reporting a $1.61 billion profit.
iPod sales have since tailed off, but the halo effect hasn’t gone away. Instead, it’s simply shifted over to Apple’s iOS product line, which is generating stellar sales of its own while introducing new customers to the rest of the company’s product portfolio.



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