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starflyer
Jan 16, 2008, 10:49 AM
From The Macalope Blog

http://blogs.cnet.com/8301-13509_1-9850999-20.html?tag=more

About that $20 upgrade...

The Macalope was certain that the whining would be swift and furious over Apple charging $20 for the same software features iPhone users get for free. As Adrian Kingsley-Hughes so brilliantly puts it:

Come on Steve, give your biggest fans a break.
Yeah!

$20 is awfully steep to add a little functionality to the iPod touch - functionality that already exists for the iPhone.

Yeah!

... I feel that this is going too far.

Yeah! Unlike all the other times Adrian writes about Apple!

Or not!

Whatever!

Well, dear reader, if you're experiencing a bit of deja vu over this, it's probably because we've seen this before. Which, not coincidentally, is what "deja vu" means in French.

Again, yes, Apple could give the update to iPod touch users for free just like their iPhone-using brethren, but they'd have to open past accounting periods and restate their financials. 802.11n? Any of this ringing a bell?

Not with Adrian, apparently.

The short story for those who got to class late is Apple must charge for substantial enhancements to products that do not have revenue recognized on a subscription basis or it has to restate prior earnings. The iPod touch does not have revenue recognized on a subscription basis. The iPhone does. As does the Apple TV. Hence, they get free updates and the iPod touch does not.

It's a somewhat complicated accounting convention and perhaps you can argue that the iPod touch revenue should also have been recognized on a subscription basis, but then it raises the question as to whether or not all iPods should have their revenue recognized that way and pretty soon it all devolves into communism and everyone's getting everything for free and even Randy Newman doesn't want that.

So you can't argue that Apple shouldn't charge for the update. It's too late.

You do have some recourse, however.

If you think $20 is too much, don't buy the upgrade.

Sure looks like it's worth it to the Macalope, though.



mr.light
Jan 16, 2008, 10:52 AM
:) worth the cost. Even for just mail and maps. Very slick!

mrgreen4242
Jan 16, 2008, 10:52 AM
1) There's about a billion threads about this already, making a new one isn't very helpful.

2) If they just HAD to please the accountants they could have priced the software much more competitively, say $4.99 - which wouldn't be a very big stretch since the software had pretty much no development cost as it was a fixed/sunk expense for the iPhone already - AND/OR simply "paid for" the update from an advertising budget as a one time marketing expense to "garner good will from customers".

Pared
Jan 16, 2008, 10:55 AM
How does AppleTV have "subscription revenue earnings" and the Touch does not?

Can you not purchase songs off the iTunes Wifi Music store?

starflyer
Jan 16, 2008, 10:58 AM
1) There's about a billion threads about this already, making a new one isn't very helpful.

Sorry, I didn't see any threads about the Macalope's blog post.

2) If they just HAD to please the accountants they could have priced the software much more competitively, say $4.99

Well, look at it this way. $20 / 5 Apps = $4.00 each. $1 less then your price.

But seriously, if you don't think this price is worth it, then don't buy it.

mrgreen4242
Jan 16, 2008, 11:04 AM
Sorry, I didn't see any threads about the Macalope's blog post.



Well, look at it this way. $20 / 5 Apps = $4.00 each. $1 less then your price.

But seriously, if you don't think this price is worth it, then don't buy it.

I was indicating $5 for the set; these apps have zero cost associated with them for Apple - their development cost was already sunk into the iPhone.

I won't - I don't have a touch! I'm upset about this because it's demonstrative of an ongoing trend from Apple where they are abusing their (best) customers and as a person who dearly loves his Apple priducts, I don't like to see that.

IJ Reilly
Jan 16, 2008, 11:52 AM
I was indicating $5 for the set; these apps have zero cost associated with them for Apple - their development cost was already sunk into the iPhone.

I won't - I don't have a touch! I'm upset about this because it's demonstrative of an ongoing trend from Apple where they are abusing their (best) customers and as a person who dearly loves his Apple priducts, I don't like to see that.

This is becoming a bit bizarre. You seem more upset about this than actual touch owners who have paid for the applications and don't seem overly bothered by the price. I paid the $20 and don't feel the least bit abused. Is this wrong of me? Must I repent for my sins?

starflyer
Jan 16, 2008, 11:55 AM
I won't - I don't have a touch! I'm upset about this because it's demonstrative of an ongoing trend from Apple where they are abusing their (best) customers and as a person who dearly loves his Apple priducts, I don't like to see that.

If it wasn't for the Sarbanes-Oxley Act I honestly don't believe Apple would have charged for these apps.

My reasoning? Apple didn't charge existing :apple:TV customers for their software update.

If Apple is "abusing their customers" as you say, they would have charged for the :apple:TV update also.

mrgreen4242
Jan 16, 2008, 12:01 PM
This is becoming a bit bizarre. You seem more upset about this than actual touch owners who have paid for the applications and don't seem overly bothered by the price. I paid the $20 and don't feel the least bit abused. Is this wrong of me? Must I repent for my sins?

You're free to buy or not buy what you want. It saddens to me to see Apple on the verge of become a really significant part of the market and keep making these poor choices.

I don't find it bizarre at all. I think Apple made a huge mistake that is going to sour a lot of people on the company just when they are really starting to build some steam.

If it wasn't for the Sarbanes-Oxley Act I honestly don't believe Apple would have charged for these apps.

My reasoning? Apple didn't charge existing :apple:TV customers for their software update.

If Apple is "abusing their customers" as you say, they would have charged for the :apple:TV update also.

The ATV update is a revenue source for Apple. It enables people to BUY or RENT things from Apple, for a fee. Even the other improvements (5.1 sound as an example) are basically there to encourage you to buy or rent something even more expensive.

If Apple had decided to make the Mail application with the touch only work with .mac it'd been free since you have to pay Apple for .mac. They only seem to be giving away things that generate revenue for them, which while it's their right to do is running counter of their competition which will slowly gain ground on Apple as the leader in the PMP market, which I honestly feel is the #1 driving force behind Apple's recent success in the PC business (with #2 being the Intel switch).

EssentialParado
Jan 16, 2008, 12:08 PM
If it wasn't for the Sarbanes-Oxley Act I honestly don't believe Apple would have charged for these apps.

My reasoning? Apple didn't charge existing :apple:TV customers for their software update.

If Apple is "abusing their customers" as you say, they would have charged for the :apple:TV update also.

But that doesn't make any sense. You're saying it's because of SO, but then how come the :apple:TV upgrade was free? The :apple:TV is essentially a non-portable iPod touch. There is no difference in terms of 'subscription model', because you buy items for both the :apple:TV and the iPod Touch from the iTunes Music Store.

Care to explain that? You can't say it's because you buy things using the :apple:TV itself, because I buy music using my iPod Touch itself. There is no difference except that Apple are charging the iPod users for the upgrade.

starflyer
Jan 16, 2008, 12:17 PM
But that doesn't make any sense. You're saying it's because of SO, but then how come the :apple:TV upgrade was free? The :apple:TV is essentially a non-portable iPod touch. There is no difference in terms of 'subscription model', because you buy items for both the :apple:TV and the iPod Touch from the iTunes Music Store.

Care to explain that? You can't say it's because you buy things using the :apple:TV itself, because I buy music using my iPod Touch itself. There is no difference except that Apple are charging the iPod users for the upgrade.

It has to do with how Apple reports its earning on each device. :apple:TV is reported based on the Subscription Model, the Touch is not.

This was covered in my original post if you care to read it...

The short story for those who got to class late is Apple must charge for substantial enhancements to products that do not have revenue recognized on a subscription basis or it has to restate prior earnings. The iPod touch does not have revenue recognized on a subscription basis. The iPhone does. As does the Apple TV. Hence, they get free updates and the iPod touch does not.

IJ Reilly
Jan 16, 2008, 12:22 PM
You're free to buy or not buy what you want. It saddens to me to see Apple on the verge of become a really significant part of the market and keep making these poor choices.

I don't find it bizarre at all. I think Apple made a huge mistake that is going to sour a lot of people on the company just when they are really starting to build some steam.

Why, thank you. But I am supposed to feel abused, right? So why don't I feel abused?

As for the reasons for the charge, I'd refer you to the front page article which discusses this issue and refers to the accounting reasons for it and why similar charges were not put into effect for the iPhone and Apple TV updates.

thesound
Jan 16, 2008, 12:41 PM
I live in Romania, witch doesn't have a iTunes Store. Romania is also a member of the EU. The problem is that i cannot buy, from let's say, Germany's iTunes Store, because i don't have a credit card issued there. This is against EU law and free trade policies. As EU citizen, i'm FREE to buy from any merchand within the EU zone, without any questions regarding my living place, adress, hair colour and sex, and without paying any additional fees (import tax, etc.). It's a unfair business practise that, as iPod owner and as EU citizen, I simply CANNOT buy the software upgrade. Period. I called the local Apple distributor (IRIS S.A.), and they too cannot upgrade my iPod. Hungary, Poland, Bulgaria and any country without an iTunes Store from Europe is in the same situation.

What does Apple think about this? It removed an entire threads from its discussion group regarding this problem.

razorianfly
Jan 16, 2008, 01:37 PM
The 12.99 update from Apple offers stunning functionality for what it's worth.

Why shouldn't you pay for an upgrade which as atleast 7 major new features? - After all, when you bought iPod touch, these weren't part of the bargin.

Times that with the man hours (originally) taken to code each application and software feature, featured in the bought version of 1.1.3.

Yes, i've paid it? - Why. Because.

I have to say, I want Apple to come out with more mind blowing software, because thats what it is, in the future. Charge for it? - yes, if the features deserve the pircetag (which these do).

All I have to say is, if this is what Apple think 1.1.3 shoudl convey, imagine what will be seeded if and when they reach Fimrware 1.2.0/2.0.0 for iPhone & iPod touch. Major things, is the answer.

For people who don't get it yet, this is the start. Leopard is on Macbook, you had to pay $129 to experience it. Welcome to the paid upgrades of the portable Mac OSX platform.

R-Fly