In recent quarters, Apple has seen sales of iPod fall flat, a signal to some that iPhone is starting to cannibalize sales of standalone mp3 players.
However, on its earnings call this afternoon, Apple noted that sales of iPod touch are continuing to grow. In fact, the company says that iPod touch now makes up more than half of total iPod sales, up 27% year-over-year.
That means that the company sold roughly 10 million of the device in the quarter (versus 16.2 million iPhones and 7.3 million iPads). Beyond helping Apple’s bottom line, that’s important because of the impact it has on the total size of the iOS ecosystem, which now totals 160 million devices.
The latest iteration of the device, which was revealed back in September, does just about everything that one can do with an iPhone 4, including run apps, use Facetime and record HD video (or what Steve Jobs joked is an "iPhone without a contract"). Given the sales numbers, that appears to be a compelling proposition to customers, even as mp3 players on the whole appear to be a declining category.