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MacBytes
Feb 9, 2008, 11:11 AM
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Category: Apple Software
Link: Accountancy rules cause iPod touch upgrade charge (http://www.macbytes.com/link.php?sid=20080209121107)
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Posted on MacBytes.com (http://www.macbytes.com)
Approved by Mudbug

Flyer0815
Feb 9, 2008, 11:15 AM
Very interesting article. Seems like Apple took the opportunity of being "forced" to charge for the update and recouped some development costs or something. Theoretically, it seems they could have just charged 1.99 or even .99 and been done with it.

Its only 20 dollars, so I'm not whining. Just an interesting situation.

samh004
Feb 9, 2008, 11:20 AM
Wirelessly posted (Mozilla/5.0 (iPod; U; CPU like Mac OS X; en) AppleWebKit/420.1 (KHTML, like Gecko) Version/3.0 Mobile/4A93 Safari/419.3)

The iLife analogy at the bottom makes sense, and I already figured this was to do with accounting, however this potentially means iPod touch users will have to pay again in the future when iPhone users might not gave to.

As for why it cost $20, not $2, they had to pay the wifi location people for the ability, so maybe that was a touch more expensive.

joeconvert
Feb 9, 2008, 11:36 AM
I think this explanation has been beaten to death on these forums.

nagromme
Feb 9, 2008, 12:37 PM
Agreed--the iPhone and Touch are accounted differently, and Apple probably did have to charge, but did not have to charge $20. At least not for this accounting rule alone.

But one additional factor I have seen mentioned only rarely: after the update, iPod Touch uses the Skyhook locator service (WiF-based pseudo-GPS). That might entail additional cost to Apple. Just a theory I've heard discussed. (And if the iPhone has ongoing revenue from AT&T--a near certainty--then it would have other ways to pay for Skyhook.)

shadowfax
Feb 10, 2008, 01:53 AM
I still don't buy it. I mean, I understand iPhone updates are free because of the ongoing revenue they generate, but the article points out that the Apple TV is accounted for in the same way, when its revenue generation is more like the iPod touch's. Seriously, this update could have been free. The iPT has the iTMS on it like the Apple TV. Just less content available.

Tosser
Feb 10, 2008, 02:23 AM
I still don't buy it. I mean, I understand iPhone updates are free because of the ongoing revenue they generate, but the article points out that the Apple TV is accounted for in the same way, when its revenue generation is more like the iPod touch's. Seriously, this update could have been free. The iPT has the iTMS on it like the Apple TV. Just less content available.

Exactly. Yet people are are finding excuse after excuse to defend apple's decision to screw people over. People are defending Apple crippling their products, which, you gotta hand em, is an awful nice combination: If you cripple your products enough, and people still buy them, even if they're crippled to the extreme, they can get you a huge number of times after quoting the "law". That way, that can set up an ad hoc subscription service, continually creating a stream of money from people buying into crippled products and getting slammed afterwards. Nice set up. For Apple. Not so good for the consumers, though.
Apple certainly seems comfortable in the role as the new up-and-coming MS when it comes to behaviour.

Flyer0815
Feb 10, 2008, 02:33 AM
Exactly. Yet people are are finding excuse after excuse to defend apple's decision to screw people over. People are defending Apple crippling their products, which, you gotta hand em, is an awful nice combination: If you cripple your products enough, and people still buy them, even if they're crippled to the extreme, they can get you a huge number of times after quoting the "law". That way, that can set up an ad hoc subscription service, continually creating a stream of money from people buying into crippled products and getting slammed afterwards. Nice set up. For Apple. Not so good for the consumers, though.
Apple certainly seems comfortable in the role as the new up-and-coming MS when it comes to behaviour.

I cant seem to classify their actions as "screwed over". Everyone paid for their iPod Touch because they felt that the benefits of the product justified the price. The recent upgrade package did nothing to downgrade the product everyone originally paid for. If one feels the 20 dollar price is justified for the upgrade, then they have the option to do so. If not, no sweat, continue using your Touch as you purchased it. I don't see how they are screwing anyone over here.

While the price maybe could have been lower if this was truly for accounting purposes, I don't feel the price is so outrageous that it warrants so much negativity.

Just my .02 :-)

Tosser
Feb 10, 2008, 02:47 AM
I cant seem to classify their actions as "screwed over". Everyone paid for their iPod Touch because they felt that the benefits of the product justified the price. The recent upgrade package did nothing to downgrade the product everyone originally paid for. If one feels the 20 dollar price is justified for the upgrade, then they have the option to do so. If not, no sweat, continue using your Touch as you purchased it. I don't see how they are screwing anyone over here.

While the price maybe could have been lower if this was truly for accounting purposes, I don't feel the price is so outrageous that it warrants so much negativity.

Just my .02 :-)

We have had this discussion before (well, not you and I, perhaps), and frankly, there are nothing in that law that makes Apple do it the way they have _chosen_ to do it. Not only could they have made it cheaper, but they could have done it without making people pay at all.

If all you people claiming this is because of the accounting laws, then please do tell me, why apple isn't making people pay when they update Safari to add new features. Or making people pay, when they introduce features going from 10.5 to 10.5.1?

Also, since apple at that time already had those apps, they _knew_ they were going to introduce them to the Touch, so they should have calculated that into the price to begin with. Heck, they could have accounted (litterally, as in doing the accounts) for that update without letting people know. And it wouldn't have cost them a dime. Nope, they chose to make people pay 20 bucks.

How much do you think we will have to pay, if and when the two get Disk Mode? That is another crippling they have done, but you surely cannot think the customers should pay, say, 40 bucks (compared to the usefulness of that compared to the usefulness of stocks, that price seems about right, imo) to get that "feature"?

That is what I call "screwing people over". You sell them a crippled product, and next you charge them to "uncripple" them. I don't care about that accounting law. Because they _could_ have avoided making people pay if they wanted to. But they didn't.


Oh, btw. Another US-company, doing audio recorders - namely Sound Devices - have no problems adding new features, or even upgrade the hardware to give people a better product. They don't charge me for that. And if they can, Apple bloody hell should be able to as well.

Eric5h5
Feb 10, 2008, 01:30 PM
You know, I bet this could come in handy....

OK, listen up! So everyone here has to send me $20. It's, like, the law or something. My accountant says I have to charge you all $20. Sorry, but I have no say in the matter. What can I do?

::waits for the $$ to start rolling in::

--Eric

shadowfax
Feb 10, 2008, 04:16 PM
I wouldn't call the action unethical. Or screwing customers over. it's certainly true that the :apple:tv upgrade very directly updates the functionality of the product so that it is compatible with the iTunes store, whereas the iPT update adds fun unnecessary stuff that isn't exactly adding compatibility with the store.

I don't see the problem with paying a little extra for new stuff. It would be cool if Apple let it slide. But they should be allowed to make money on their software if they want. It's not monopolistic, and it's not evil. Buying out competitors and shutting them down, that's evil.

QuarterSwede
Feb 10, 2008, 05:21 PM
I wouldn't call the action unethical. Or screwing customers over. it's certainly true that the :apple:tv upgrade very directly updates the functionality of the product so that it is compatible with the iTunes store, whereas the iPT update adds fun unnecessary stuff that isn't exactly adding compatibility with the store.

I don't see the problem with paying a little extra for new stuff. It would be cool if Apple let it slide. But they should be allowed to make money on their software if they want. It's not monopolistic, and it's not evil. Buying out competitors and shutting them down, that's evil.
I don't have a problem with Apple charging for the update honestly. What I don't understand is why they didn't just account for the iPod Touch as a subscription based service in the first place like they did with the AppleTV. Also, why do all other iPod's get updates free and not the iPod Touch? My guess is that if they're only added features not just fixing bugs then they legally have to charge. In that case why not just slap a bug fix in it and give it out?

... Apple is able to release that update for free because, like the iPhone, it recognizes Apple TV revenue on a subscription basis. According to the company's 1 February quarterly filing with the Securities and Exchange Commission, "For both Apple TV and iPhone, Apple indicated it may from time-to-time provide future unspecified features and additional software products free of charge to customers. Italics added for emphasis.

shadowfax
Feb 10, 2008, 10:55 PM
I suppose really the most perplexing thing in all this is why apple didn't include those apps in the first place. It's not like they didn't work, people hacked their iPT's and put them on and they were fine. I guess it was probably Apple's cannibalization fear--make the iPT too useful and it will make the iPhone lose business. I guess they have either decided that their iPhone sales are good enough, or they are just unhappy with their iPT sales... or something.

Also, @.25Swede, I think that if Apple ever updates the iPhone/iPT to have a Wi-Fi video rental store (that would be AWESOME), I bet it would be free for iPT users too--being a "revenue-generating" update, if you will.

Hopefully in a few years we will see the iPhone turn into a hoss mobile platform with those crazy Intel mobile chips, and the OS will be sold after a model that is more akin to OS X than "firmware."