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Can someone point me to links where Apple:

a) states that the price for iPod Touch updates were because of S-Oxley?
b) states that the ability to install apps will be at a price _because_ of S-Oxley?
c) states that they account for different products in a different way, because of S-O?
d)explains _how_ they account for the different products?
e) explains that it is _not_ because they simply are greedy and act like the big corporation that they really are (Apple is only small when compared to Windows, not when compared with any other computer hardware manufacturer)?
 
Can someone point me to links where Apple:

a) states that the price for iPod Touch updates were because of S-Oxley?
b) states that the ability to install apps will be at a price _because_ of S-Oxley?
c) states that they account for different products in a different way, because of S-O?
d)explains _how_ they account for the different products?
e) explains that it is _not_ because they simply are greedy and act like the big corporation that they really are (Apple is only small when compared to Windows, not when compared with any other computer hardware manufacturer)?
As much as I agree with you, someone is gonna come on here and tell you that you're "missing the point"... Oh well, nicely said.
 
Can someone point me to links where Apple:

a) states that the price for iPod Touch updates were because of S-Oxley?
b) states that the ability to install apps will be at a price _because_ of S-Oxley?
c) states that they account for different products in a different way, because of S-O?
d)explains _how_ they account for the different products?
e) explains that it is _not_ because they simply are greedy and act like the big corporation that they really are (Apple is only small when compared to Windows, not when compared with any other computer hardware manufacturer)?

I can't answer very specifically on all of this, so I won't. :)

d) This sort of information isn't always public, but when asked, they will give it during the quarterly results conference calls. What is known is that the iPod line and Macs have revenue recognized immediately. iPhone and ATV have revenue recognized over 24 months.
e) Evil until proven guilty eh? ;)
 
I can't answer very specifically on all of this, so I won't. :)

d) This sort of information isn't always public, but when asked, they will give it during the quarterly results conference calls. What is known is that the iPod line and Macs have revenue recognized immediately. iPhone and ATV have revenue recognized over 24 months.
e) Evil until proven guilty eh? ;)

d) I'm not really going to take a flight across the Atlantic to ask, to be honest. And since people obviosuly prefer to bake their own, as long as it can be used as an excuse (by the people defending the corporation, that is), then it doesn't look like anyone is actually going to link anywhere to answer my questions.

e) Not really. I do, however, have quite the experience dealing with other american companies as a consumer.

How is it, that some american companies (small and big) are able to provide software updates and even hardware updates for free for their customers. And no, the "well, their HQ is outside of the US". I'm quite certain a company like Sound Devices (LLC) have their HQ at 300 Wengel Drive, Reedsburg, Wisconsin 53959 USA. So, no, Apple is not "evil until proven otherwise" – having been a Mac user for 18 years shows quite the opposite , in fact.

F) Since the excuse for Apple on these boards is that other companies are simply, on paper, moving their HQ abroad, I'd like to get some links and facts to that end as well as a link or a scanned article as to why Apple choose not to, and instead make people pull out their wallet. If it's an excuse, people ought to at least qualify it. And no, some nonsense about patriotisme doesn't work. Most (if not all?) of Apple's products are made in China – with a manufacturing HQ in Taiwan.
 
Krevnik - Had a good reply to this going - but command-B doesn't bold in Firefox (as it does in IE!!) but instead opens the "bookmarks" sidebar - so of course, command-W doesn't close the sidebar but the entire window, post and all. :p

I'll try to paraphrase. Thanks for the good & insightful comments & dialogue.

Aha, another catch... MacOS X, iTunes, and Safari are all accounted for separately. And they are accounted for separately from the hardware.

For me, this is the rub, and if correct points to a choice on Apple's part that they could have made for the Touch - independent of how the hardware revenue is accounted for. Let the software be separate - and free!

Because when they have had to invoke the 'S-O' argument, it has been about updates to a fairly closed product where the software and hardware were presented as a single entity. MacOS X, while tied to Apple hardware, does not actually fall neatly into this same category.

Curious about past, pre-Touch examples...assume (almost by definition in your statement) they'd have to be iPods.

But the Touch is an iPod in name only; it and iPhone are both mobile OS X computers. As such, they're inherently more extensible, updateable, and less closed than a garden-variety iPod, which is "just" an MP3 player. In other words, it's not a fairly closed product and doesn't have to be treated as one.

You might argue it's not the reality of the product, it's that "software and hardware are presented as a single entity." If so, I submit that the Mac and OS X are marketed by Apple as the epitome of fairly closed, hard/software as single entity...as scores of "buy a Mac because OS X is more secure than Windows" commercials attest. Yet OS X (and every component program) can be accounted for separately...

In sum...I see a lot of choices on Apple's part, roads that if travelled could result in software upgrades they don't have to charge for. Even if:

Apple wanted to take the entire sale price of the Touch as revenue up front. This is what it had always done with ipods, and to do differently would have really skewed their revenue trends.

...it still seems they could separate software from hardware for accounting and not charge for upgrades.

Boda2 also says the charge can't be "de minimus." Is there an accounting standard for that? $1.99 for an 802.11n enabler is one thing; $20 for a few apps is another, why not $1 per app?

One final example others have raised: Sony's PSP. This gets tons of firmware upgrades that add very significant functionality. To a neutral observer (or accountant!), PSP hardware/software is equally closed/tied as Touch hardware/software. Yet Sony - of America - doesn't charge for those.

Hell, Microsoft probably does the same with Xbox360 upgrades, and almost surely has done so with the Zune.

...So why is it Apple is the only company that comes to mind for charging for these kinds of upgrades?
 
d) I'm not really going to take a flight across the Atlantic to ask, to be honest. And since people obviosuly prefer to bake their own, as long as it can be used as an excuse (by the people defending the corporation, that is), then it doesn't look like anyone is actually going to link anywhere to answer my questions.

Note: Conference call. :)

The only reason I defend the corporation is from the standpoint that people seem to think the only motivation behind this is greed. The problem is that it is /never/ that simple, and I have seen first-hand enough stupidity inside corporations, and from consumers alike to realize that neither consumer nor company is right all the time.

I have seen public perception turn really nasty on a leak for a product that wasn't meant to be released for 1-2 years. But the prototype was leaked shortly before the previous hardware revision finally hit the market. In that case, people causing hysterics didn't seem to grasp the fact that products take awhile to bake, and that the company in question was not out to obsolete their device in under 6 months of selling them the previous one.

In this case, we have a huge gap of knowledge. We (including me) can only make wild-ass guesses as to the greed-to-requirements factor involved in this decision. Until someone raids Apple's accounting reports and internal memos on the subject, or we get a straight, detailed answer from Apple that is honest. We just don't know the specifics. Right now, no matter what conclusions any of us draw, they aren't backed by anything solid either way, and that is a problem.

How is it, that some american companies (small and big) are able to provide software updates and even hardware updates for free for their customers. And no, the "well, their HQ is outside of the US". I'm quite certain a company like Sound Devices (LLC) have their HQ at 300 Wengel Drive, Reedsburg, Wisconsin 53959 USA. So, no, Apple is not "evil until proven otherwise" – having been a Mac user for 18 years shows quite the opposite , in fact.

You are trying to lump one class of update with another. The problem is that accounting, law, etc don't like generalities. Apple itself provides free software updates, but the iPod Touch doesn't seem to fall in that category in all cases. Some updates are free, a couple haven't been.

F) Since the excuse for Apple on these boards is that other companies are simply, on paper, moving their HQ abroad, I'd like to get some links and facts to that end as well as a link or a scanned article as to why Apple choose not to, and instead make people pull out their wallet. If it's an excuse, people ought to at least qualify it. And no, some nonsense about patriotism doesn't work. Most (if not all?) of Apple's products are made in China – with a manufacturing HQ in Taiwan.

The decision is a company's to make. I cannot even guarantee it is the sole reason why Microsoft ships Zune 2.0 as a free firmware update, while Apple ships iPod Touch 2.0 as a pay update. Hell, it could simply be that Zune revenue is reported over time like services.
 
One final example others have raised: Sony's PSP. This gets tons of firmware upgrades that add very significant functionality. To a neutral observer (or accountant!), PSP hardware/software is equally closed/tied as Touch hardware/software. Yet Sony - of America - doesn't charge for those.

Hell, Microsoft probably does the same with Xbox360 upgrades, and almost surely has done so with the Zune.

...So why is it Apple is the only company that comes to mind for charging for these kinds of upgrades?

That's what I want to know.

Actually, my first iPod got upgrades long after it came out.
So did my 3rd gen iPod...

What gives Apple?
 
For me, this is the rub, and if correct points to a choice on Apple's part that they could have made for the Touch - independent of how the hardware revenue is accounted for. Let the software be separate - and free!

They could, but then what is to say an auditor will claim they aren't trying to be shifty in the recording? Especially when the 1.1.3 & 1.1.4 updates weren't charged for, it was the apps added onto it.

2.0 could potentially be different, which is a concern.

Curious about past, pre-Touch examples...assume (almost by definition in your statement) they'd have to be iPods.

But the Touch is an iPod in name only; it and iPhone are both mobile OS X computers. As such, they're inherently more extensible, updateable, and less closed than a garden-variety iPod, which is "just" an MP3 player. In other words, it's not a fairly closed product and doesn't have to be treated as one.

This is true. But the big problem here them comes to having to actually treat the OS like a separate product. Right now with OS X there is a lot more choice on the part of the user on which version to use (to a point), and if they decide to just slap Windows on their Mac and nuke OS X off it.

Right now, they don't offer nearly that level of flexibility at the OS level, which arguably is what makes the mobile OS X + Hardware a single product.

You might argue it's not the reality of the product, it's that "software and hardware are presented as a single entity." If so, I submit that the Mac and OS X are marketed by Apple as the epitome of fairly closed, hard/software as single entity...as scores of "buy a Mac because OS X is more secure than Windows" commercials attest. Yet OS X (and every component program) can be accounted for separately...

In fact, that is what I do argue. But I also argue that OS X may be limited in the hardware it runs on, but right now, the hardware isn't. So far, there is still a distinction from an appliance device that can run new apps, and a computer.

In sum...I see a lot of choices on Apple's part, roads that if travelled could result in software upgrades they don't have to charge for. Even if:

...it still seems they could separate software from hardware for accounting and not charge for upgrades.

Boda2 also says the charge can't be "de minimus." Is there an accounting standard for that? $1.99 for an 802.11n enabler is one thing; $20 for a few apps is another, why not $1 per app?

One final example others have raised: Sony's PSP. This gets tons of firmware upgrades that add very significant functionality. To a neutral observer (or accountant!), PSP hardware/software is equally closed/tied as Touch hardware/software. Yet Sony - of America - doesn't charge for those.

Hell, Microsoft probably does the same with Xbox360 upgrades, and almost surely has done so with the Zune.

...So why is it Apple is the only company that comes to mind for charging for these kinds of upgrades?

Accounting, accounting, accounting, accounting. There are lots of reasons to not account for product sales immediately, especially when you don't need to. Sony of America is an interesting case, particularly because the PSP isn't an American product by any stretch of the imagination, and Sony of America is just an offshoot of Sony in Japan. I don't even pretend to understand the legal complexities involved here. :)

The 360 provides services in Live Marketplace, and the Dashboard could very well be part of that. The Zune may be tied to a subscription reporting model for one reason or another. Again, I don't know the details, and I can only guess.

Even Apple for the most part runs accounting in ways that makes some iota of sense... but the iPod Touch in particular is the irregularity (and the 802.11n drivers). If we want to understand these irregularities, we need to understand why they differ from the rest of the products Apple produces. So questions we should be asking (if we want to find an answer) are things like:

If the iPod Touch's updates are similar to OS X updates, what makes them similar and different (in terms of accounting)? Do we compare something like 2.0 to Tiger->Leopard, or Tiger->10.4.1? What about apps that weren't originally bundled, but now are? How does Apple handle that scenario (iLife is a great parallel to think about here)?

If the 802.11n drivers add hardware-level functionality (or at least unlock it), how does that differ from updated OGL drivers? What other precedents has Apple set here?

All-in-all though, the more I think about it right now, the more the complaints confuse me. The updates should be free because it is 'just a firmware update' to a closed device, but then your arguments against the fee leverage the upgradable/open ecosystem on OS X that Apple does use to extract repeated revenue from via OS X updates, iLife updates, etc. Apple is going to extract the revenue from the market by selling you a series of closed devices, or a series of software updates... Which is it gonna be for the Touch? It seems to me that the model of 'charge for both' which seems to work just fine on the computer (and the Touch hasn't even had a hardware upgrade beyond capacity yet) is being completely rejected on by Touch users.

I actually find it kinda interesting from a sociological/psychological standpoint. :)
 
Upgrades or updates? There's quite a difference. One gives you new features that it didn't have before, while the other fixes bugs and problems...
The problem I see with this logic is that Apple sold an intentionally stripped down device. There's no denying that. Now, they're trying hard to establish a standard of buying features that should have been included from the beginning.

Now, I understand what this makes a great deal of sense in business, but it leaves customers with a bad taste in their mouths, especially when competing products get features updates for free regularly.

So, we've established our positions on this precedent and no one is budging. My hope is that Apple decides to pursue revenue through their App Store and provide iPod Touch owners and iPhone owners these updates for free. Yes, iPhone users pay more for their monthly service plans, but that doesn't mean the update can't be provided free for their sister product.
 
Companies have to charge EXTRA for features not originally included or advertised (like when Apple had to charge users for 802.11n updates to their computers).

Updates to features are free, updates to NEW FEATURES is not...

Touch users originally bought them as iPods, Apple has to charge to update them to PDA's (the iPhone Apps).

You will be charged again to have the ability to use third party apps (version 2.0 software).

iPhone users to not have to pay becuase they are originally advertised as being Smartphones with the ability to use them as PDA's and update them with new features and software.

Simply not true. Companies do not have to charge to update their products with new features.

Besides, if it was simply a formality, it would be like a $1 charge, not a $20 charge. Apple is just making money.
 
Upgrades or updates? There's quite a difference. One gives you new features that it didn't have before, while the other fixes bugs and problems...

5G iPods got gapless playback as a significant free new feature in a firmware update.
 
Note: Conference call. :)

Ah, yes. Althoug I misinterpreted it at first (tick that off to the language barrier (mine)), howcome everyone just speculates it's because of S-oxley? Why haven't anyone asked that question? And, just as important(ly …), why haven't any of you linked to anything like this?


The only reason I defend the corporation is from the standpoint that people seem to think the only motivation behind this is greed.

Ah, I see. By that logic, you'd defend vielding power as a monopoly, making up excuses for such a monopoly, merely because people thinks that misuse of a monopoly is only done to make even more money. Excellent.

The problem is that it is /never/ that simple, and I have seen first-hand enough stupidity inside corporations, and from consumers alike to realize that neither consumer nor company is right all the time.
Haha, that's poor. That's like saying that "Nothing is never black and white", and therefore you can be "just a little pregnant", or even worse: The girl who was raped and beaten aren't a victim, because it's "never" that simple. Well, sorry, but sometimes it IS. Go take a look at MS's business practices in the past.


I have seen public perception turn really nasty on a leak for a product that wasn't meant to be released for 1-2 years. But the prototype was leaked shortly before the previous hardware revision finally hit the market. In that case, people causing hysterics didn't seem to grasp the fact that products take awhile to bake, and that the company in question was not out to obsolete their device in under 6 months of selling them the previous one.
Who gives a hoot? That has absolutely no bearing on people defending apple practices by merely claiming it's because og S-Oxley. And especially not when other american companies doesn't do this, and doesn't make the consumer pay extra. It's a crap excuse.

In this case, we have a huge gap of knowledge. We (including me) can only make wild-ass guesses as to the greed-to-requirements factor involved in this decision. Until someone raids Apple's accounting reports and internal memos on the subject, or we get a straight, detailed answer from Apple that is honest. We just don't know the specifics. Right now, no matter what conclusions any of us draw, they aren't backed by anything solid either way, and that is a problem.
Occam's Razor …
Besides, it's about plausible reasons. Since Apple haven't in any way implied this is anything more than getting extra revenue, which is further supported by Apple letting the user pay exorbitant prices for RAM (even more in the past), Apple having the highest "pay per product" (no idea, what's it called in english: "The pay above cost"?), and that no other company I'm aware of let people pay like this _because of S-OXley, it really is a matter of deducting. And making up excuses based on S-Oxley certainly doesn't adhere to Occam's, neither to common sense.



You are trying to lump one class of update with another. The problem is that accounting, law, etc don't like generalities. Apple itself provides free software updates, but the iPod Touch doesn't seem to fall in that category in all cases. Some updates are free, a couple haven't been.

Yet another poor excuse.
I am certainly not. People are saying that the S-Oxley means that something that really add features (and therefore "value") force Apple into having the customer's pay.

let me tell you a little about SD: They have not only made Bugfixes and small changes to the firmware in their recorders. They have added - mentioning just a few big ones: MP3-recording, MP2-recording, FLAC-recording, and dumping audio to an external drive. Now, that last bit, including simultaneously recording to all discs (HDD, CF-card and the external drive) was added, not just in the firmware, but by having all their recorders shipped back, at their expense, to Wisconsin, to have the board with the FW-chip switched so these features could be added. And get this: Apart from the MP3-recording, nothing of it were promised when they sold the previous recorders (incl. mine).
Besides, the Law is _all about_ generalities.




The decision is a company's to make.
Exactly. And Apple chose to make people pay even more than they already did. And this with a product that has to be one of their most tied-in products. A product that cannot function without iTunes.

I cannot even guarantee it is the sole reason why Microsoft ships Zune 2.0 as a free firmware update, while Apple ships iPod Touch 2.0 as a pay update. Hell, it could simply be that Zune revenue is reported over time like services.
Well, since Apple is corporation, with a monopoly-like status in this market, the most likely reason is: Because they can (i.e. greed).

In short: All I'm hearing are excuses a la "You're paying a premium for Apple's memory, because it's a better quality" (i.e. empty speculation, that has absolutely no bearing on reality.
 
The decision is a company's to make. I cannot even guarantee it is the sole reason why Microsoft ships Zune 2.0 as a free firmware update, while Apple ships iPod Touch 2.0 as a pay update. Hell, it could simply be that Zune revenue is reported over time like services.

It's simple. Apple can.

If Microsoft tried to charge for the update, people will complain, etc.

Apple does it, a lot people end up paying or if they complain Apple will tell them to chill, explain a bunch of BS, and they will buy it.
 
Apple does it, a lot people end up paying or if they complain Apple will tell them to chill, explain a bunch of BS, and they will buy it.

Yup, that pretty much sums it up. It's like herd mentality, and when someone refuses to be a sheep, the rest of the flock gets angry ...
 
Ah, yes. Althoug I misinterpreted it at first (tick that off to the language barrier (mine)), howcome everyone just speculates it's because of S-oxley? Why haven't anyone asked that question? And, just as important(ly …), why haven't any of you linked to anything like this?

Fine, I'll source you.

Go back to MR's reporting on conference calls for quarterly reports. Hopefully, they should still have articles for the last year or so (4-5 reports). That gives some information.

Next, go back to Apple's feed for MWSF 08 and the recent iPhone event. Particularly, the pieces regarding the apps being brought to the touch, and the tail end of the Enterprise announcements for the iPhone (I believe) when they bring up the iPod Touch.

Ah, I see. By that logic, you'd defend vielding power as a monopoly, making up excuses for such a monopoly, merely because people thinks that misuse of a monopoly is only done to make even more money. Excellent.

Strawman. You take one motivation, and turn it into another.

If you could show how abuse of a monopoly-like position is taking place, great. Greedy as it may seem, this isn't exactly a move that helps further cement their monopoly position, if this forum's reaction is any indication.

Haha, that's poor. That's like saying that "Nothing is never black and white", and therefore you can be "just a little pregnant", or even worse: The girl who was raped and beaten aren't a victim, because it's "never" that simple. Well, sorry, but sometimes it IS. Go take a look at MS's business practices in the past.

Strawman, twisting of words.

I said that the company and consumer are never always right. If you think I insinuated that Apple would never be malicious, you misinterpreted. The problem is that stupidity is just as likely a cause for a bad situation as malice. And yes, sometimes it is just that simple that someone could make a mistake and the consumer and company both wind up paying for it in the end.

Who gives a hoot? That has absolutely no bearing on people defending apple practices by merely claiming it's because og S-Oxley. And especially not when other american companies doesn't do this, and doesn't make the consumer pay extra. It's a crap excuse.

It does have a bearing as an example of how employee stupidity caused consumer to believe that there was corporate malice when it was unwarranted. And also provides a good example of how little a consumer knows about the workings of a large company, and how schizophrenic it can be.

Despite some real attempts at reform inside a company like Microsoft, some individuals in a position of control over certain situations have made poor choices that have produced consumer outrage recently (and rightfully so). However, it doesn't suddenly make the rest of the company guilty by association.

Occam's Razor …
Besides, it's about plausible reasons. Since Apple haven't in any way implied this is anything more than getting extra revenue, which is further supported by Apple letting the user pay exorbitant prices for RAM (even more in the past), Apple having the highest "pay per product" (no idea, what's it called in english: "The pay above cost"?), and that no other company I'm aware of let people pay like this _because of S-OXley, it really is a matter of deducting. And making up excuses based on S-Oxley certainly doesn't adhere to Occam's, neither to common sense.

Common sense also says to never attribute malice to something that can be easily explained as stupidity. So again, we can argue this around in circles until the moon explodes quite randomly and for no apparent reason. Until we have data from Apple (gathered via leaks, investigation, etc) that provides evidence one way or another, we are both simply speculating.

Yet another poor excuse.
I am certainly not. People are saying that the S-Oxley means that something that really add features (and therefore "value") force Apple into having the customer's pay.

I think you skipped or missed the part where subscription-based accounting models are handled differently in terms of regulation. That makes a world of difference here. While the product may be sold as a single lump sum up front, it may not be accounted for by the company as a single lump sum up front. TiVo is a good example of where you can buy a lifetime subscription with the box, and yet the revenue you gave TiVo is not being accounted for as a stand-alone product. It is a subscription-based service.

let me tell you a little about SD: They have not only made Bugfixes and small changes to the firmware in their recorders. They have added - mentioning just a few big ones: MP3-recording, MP2-recording, FLAC-recording, and dumping audio to an external drive. Now, that last bit, including simultaneously recording to all discs (HDD, CF-card and the external drive) was added, not just in the firmware, but by having all their recorders shipped back, at their expense, to Wisconsin, to have the board with the FW-chip switched so these features could be added. And get this: Apart from the MP3-recording, nothing of it were promised when they sold the previous recorders (incl. mine).
Besides, the Law is _all about_ generalities.

If the law was about generalities, the supreme court would not slap down laws that were 'overly broad', and we wouldn't have multiple degrees of a particular crime. The law is written in specifics, cases revolve around specifics, and precedents don't always apply in similar cases if the right set of specifics are different. An upgrade to a product that is part of a subscription model is not the same as an upgrade to a stand-alone product. And in the case of regulations on accounting and reporting, it is how the product is accounted (subscription/stand-alone) that matters, not how it is sold to the public. And it does suck that it is the case.

Exactly. And Apple chose to make people pay even more than they already did. And this with a product that has to be one of their most tied-in products. A product that cannot function without iTunes.

And happily enough, they make sure you can get iTunes via bundling with the product or as a download.

The question here is how much of the decision to charge, and how much, is Apple and how much is regulation? We don't know enough specifics to say either way.

Well, since Apple is corporation, with a monopoly-like status in this market, the most likely reason is: Because they can (i.e. greed).

In short: All I'm hearing are excuses a la "You're paying a premium for Apple's memory, because it's a better quality" (i.e. empty speculation, that has absolutely no bearing on reality.

First off, don't put in my mouth words I haven't said. I have made it clear my position on Apple charging, and that I don't believe a fee on the order of what was asked for in January makes a whole lot of sense.

Secondly, you have no more information than I do, and any conclusion you draw is as much based on speculation as any conclusion I draw. If anything, the difference is that I have seen how big corporations actually operate from the inside, and realize that while most people in a corporation are usually fairly well-meaning people looking for ways to please the most customers with the resources available, as early as possible... all it really takes is one idiot or malicious individual out of 30 thousand to create a fiasco with the customers.
 
Warning: Long post on iPT vs. iPhone Fees

I've seen too many posts regarding the incremental upgrade fee associated with iPT vs. iPhone. I am not going to weigh in on whether the fee is right or wrong but wanted to clarify some of the points around the use of SOX compliance and accounting issues.

All public companies in the US are required to abide by the following:

1. GAAP (Generally Accepted Accounting Principles). This what allows all companies in the US to have a standardize set of books to operate their business, provide comparisons to other companies, to pay taxes, and meet SEC reporting requirments.
2. SOX (Sarbanes-Oxley). This is a protective measure instituted after ENRON and the other accounting fiascoes that requires all public companies to undergo stringent testing, documentation, and control procedures to ensure that they are meeting GAAP and SEC requirements. It also extends criminal liability to the executive staff to ensure that all the financial reporting is accurate.
3. SEC reporting requirements. All publicly traded companies must file and provide sufficient data to the public in a standardize form for specific transactions (quarterly earnings, annual reports, M&A, etc.).

I'm giving a very high level perspective on this and will not get into any detail on each of these beyond what I've written. There are entire industries built around these topics and you can google and learn more about them.

So onto the Apple iPT vs. iPhone fee...

The main confusion around SOX seems to be that folks on the fora suggests that the Apple iPT fee is caused by SOX. I watched the SDK presentation and Steve Jobs does not mention SOX at all. He mentions, and I'm paraphrasing, that the incremental fees on the iPT were due to "Accounting Issues". Perhaps it was mentioned in another presentation. Either way, based on what SOX is, it is doubtful that SOX is the cause of the fee. SOX may require that Apple demonstrate consistency in how it recognizes revenue for iPods vs. iPhone but is not the main reason for the fees.

Most likely the causes are
1) is the revenue recognition differences in the iPT vs. iPhone.
2) Apple chose to implement an upgrade fee. Again, no comment on the right or wrong on the fee.

On the accounting issues:

As I mentioned above, all public companies are required to disclose their financial information. All this information is available from the SEC at www.sec.gov.

I have provided links below for their 2 most important filings: (Please note that these are lengthy documents fully of legal and accounting language but a worthwhile read if you really want to understand a companies business)

Apple 10-K. This is the annual report and includes the financial results for the entire year.

Apple 10-Q. This is the quarterly filing (forgot which quarter) of Apple's quarterly financial results.

One of the key areas within these reports, besides their financial results, is their disclosure of how they recognize revenue for their products. This is basically the accounting version of what happens when you buy a product from Apple.

Instead of having you guys find this section, I have copied out a section of it for you. This is verbatim from the 10-Q.

Revenue Recognition

Net sales consist primarily of revenue from the sale of hardware, software, music products, digital content, peripherals, and service and support contracts. The Company recognizes revenue for software products (operating system software and applications software), or any product that is considered to be software-related in accordance with the guidance in Emerging Issues Task Force (“EITF”) No. 03-5, Applicability of AICPA Statement of Position 97-2 to Non-software Deliverables in an Arrangement Containing More-Than-Incidental Software, (e.g., Mac computers, iPod portable digital music players and iPhone) pursuant to American Institute of Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) No. 97-2, Software Revenue Recognition, as amended. For products that are not software or software-related, (e.g., digital content sold on the iTunes Store and certain Mac, iPod and iPhone supplies and accessories) the Company recognizes revenue pursuant to SEC Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition.

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. Product is considered delivered to the customer once it has been shipped, and title and risk of loss have been transferred. For most of the Company’s product sales, these criteria are met at the time the product is shipped. For online sales to individuals, for some sales to education customers in the U.S., and for certain other sales, the Company defers revenue until the customer receives the product because the Company retains a portion of the risk of loss on these sales during transit. If at the outset of an arrangement the Company determines the arrangement fee is not, or is presumed not to be, fixed or determinable, revenue is deferred and subsequently recognized as amounts become due and payable and all other criteria for revenue recognition have been met.

For both Apple TV and iPhone, the Company indicated it may from time-to-time provide future unspecified features and additional software products free of charge to customers. Therefore, sales of Apple TV and iPhone handsets are recognized under subscription accounting in accordance with SOP No. 97-2. The Company recognizes the associated revenue and cost of goods sold on a straight-line basis over the currently estimated 24-month economic lives of these products with any loss recognized at the time of sale. Costs incurred by the Company for engineering, sales, marketing and warranty are expensed as incurred.

As you can see, the accounting for iPhone is very different from the iPod. Thus it is true that Apple needs to recognize revenue differently. Also note that once you implement an accounting principle you can not change it at will. Any change will require a company to restate their current and past earnings (don't remember how far back you have to go tho). Therefore, Apple is not going to make changes on how they plan to account for the iPT or the iPhone.

I hope this clarifies the issues around the whole SOX and accounting for some of you and I hope we can stop this whole discussion on upgrade fee caused by this.

The real issue is whether people feel it is right for Apple to charge a fee to upgrade the iPT. Unfortunately, Apple has chosen this route and as a friend of mine said once, "You can vote with your feet", meaning you can choose to pay or not pay. That choice is yours.

BTW, I do not own an iPT nor do I work for Apple. However, I own 3 ipods (4g 40gb photo, 4gb nano, 5g 30gb video) and am thinking about adding an iPT to use as a PDA.

Thanks for reading!
 
I definitely agree with the statements in this thread about "herd mentality". People are rightfully speaking out against Apple for charging for updates that should be free. When the people who are used to being shafted by Apple read these comments, it makes them mad and they try to justify it.

All of the accounting BS aside, the 2.0 firmware update will NOT be an "upgrade". The iPod touch and iPhone already have the ability to run 3rd party applications via "jailbreak". The 2.0 firmware is just "unlocking" this capability for "legitimate" use.

So, someone please explain to me how unlocking an already present feature is an "upgrade".

The only "new feature" the firmware will be adding is all the enterprise junk. Everything else, the units are already capable of as proven by "illegitimate" applications made by "hackers" already.

This isn't like going from Tiger to Leopard, or XP to Vista, or even XP SP1 to SP2. This is just introducing capabilities that are already present and throwing in a couple of extra features and trying to charge for it.

Why can't Apple release the 2.0 firmware for the iPod touch WITHOUT the "Enterprise" capabilities, but WITH the ability to run 3rd party apps? If someone wants those "Enterprise capabilities" then they can CHOOSE to pay the fee.

Let's look at some other devices for a second.

The Xbox360 as an example. You DO NOT have to be a paying Xbox Live member to receive updates. In fact, you never even have to purchase a game or additional accessory to receive updates. You can just use it as a very expensive upscaling DVD player and media player.

Going by all of the "accounting" nonsense in this thread, it would be about time for Microsoft to start posting notices stating "if you bought an Xbox360 before this date you are no longer eligible for updates".

Same goes for the Zune. With the Zune, you do not have to buy or rent a single song from the Zune Marketplace. Yet they received a significant software upgrade.

I can't even begin to list how many games and pieces of computer hardware and software I have owned over the years that have received significant upgrades, equal to that of the 2.0 firmware, free of charge.

Quite simply, there is not a reason this Earth that Apple HAS to charge for the upgrade. The whole "legally required to" is pure and simple BS made up by both them and the sheep who stick up for Apple.

Even if they were legally required to charge for upgrade (in the case of the iPod touch, the only upgrade being the "Enterprise features"), then there is not a single reason they HAVE to include that. There is absolutely NO REASON whatsoever they cannot release the firmware WITH the capability to RUN 3rd party applications and those who WANT the "Enterprise features" can then MAKE THE CHOICE to buy the extra features.

The only answer to ALL of this is that Apple CHOOSES to charge for the upgrade. They know that there are enough people out there who will happily buy it, and another group of people who will complain and still buy it. Even though the vast majority will not buy the upgrade, theres enough people who are stupid enough to pay for it.. so they do it.

I don't have an iPod touch. I don't plan to purchase one because of this.

I DO have an iPhone. I can tell you that if Apple even began to try to charge for "upgrades" like this I would be paying the $175 termination fee.

One thing that puzzles me though.. if the iPods are "accounted for differently" and they're supposedly "legally required" to charge for updates...

then why is it that 5G iPod owners were not charged for the firmware upgrade that gave them gapless playback and the ability to buy and play iPod games? That upgrade also significantly improved battery life during video playback and increased the maximum resolution and H.264 bitrate from 320x240 768kbps to 640x480 1.5Mbps. The 5G iPod released in 2005 was given the firmware upgrade to have those capabilities while the 5.5G iPod released in 2006 had those features out of the box.

Why is it that the iPod nano (3G) and iPod classic received a free firmware upgrade to be able to play rented movies? Certainly work had to be done on the software level to enable the features required by the DRM to allow them to play. That wasn't free.

Why, in the past, has Apple been able to release a firmware upgrade that adds new features (ability to play games, play rented movies, gapless playback) and unlocks already available features (hardware capability to run higher resolution and bitrate video) for free? The 2.0 firmware for the iPod touch will add a new feature ("Enterprise" features, which could be optional) and unlock already available capabilities (ability to run 3rd party apps). What laws have changed in the last year and a half to have to require them to charge for something they've done for free in the past?

Oh thats right, nothing has changed. They're just charging because they can.
 
Fine, I'll source you.

Go back to MR's reporting on conference calls for quarterly reports. Hopefully, they should still have articles for the last year or so (4-5 reports). That gives some information.

Next, go back to Apple's feed for MWSF 08 and the recent iPhone event. Particularly, the pieces regarding the apps being brought to the touch, and the tail end of the Enterprise announcements for the iPhone (I believe) when they bring up the iPod Touch.
Great. That answers about one question. The rest is speculation. Thanks anyway.



Strawman. You take one motivation, and turn it into another.

Nonsense. It is certainly not a strawman to test whether your logic and argumentation holds water. One of the classic ways to do that is to see where else that argument will fit, and to what extend that same logic can be applied. To check if it can be used to support (or go against, as it were) absurdities. And your argument, that the only reason you're defending the corporation is that people think the motivation is greed can be used to defend even monopolies bad behaviour. It's called reductio ad absurdium – and let me remind you that r-a-d is not a logical fallacy, it's a method to test whether an argument holds water.

If you could show how abuse of a monopoly-like position is taking place, great. Greedy as it may seem, this isn't exactly a move that helps further cement their monopoly position, if this forum's reaction is any indication.
Hmm. Abuse of a monopoly-like position doesn't have to "further cement" anything. It just has to be abuse, you know.

Originally Posted by Tosser
Haha, that's poor. That's like saying that "Nothing is never black and white", and therefore you can be "just a little pregnant", or even worse: The girl who was raped and beaten aren't a victim, because it's "never" that simple. Well, sorry, but sometimes it IS. Go take a look at MS's business practices in the past.
Strawman, twisting of words.
Again. I am certainly not twisting words, and I think it's about time you looked up "strawman argument", as this isn't one either.
You're generalising in the comment I react to, by saying thing's are never that simple. That you have seen stupidity etc in both consumers and corporations, and you thereby imply, that this is also the consumers fault. That there can never be "a screwer" and "a screwee": In other words, there can never be a clear cut attacker and victim.


I said that the company and consumer are never always right. If you think I insinuated that Apple would never be malicious, you misinterpreted. The problem is that stupidity is just as likely a cause for a bad situation as malice. And yes, sometimes it is just that simple that someone could make a mistake and the consumer and company both wind up paying for it in the end.
Ah, yes. See above.

Originally Posted by Tosser
Who gives a hoot? That has absolutely no bearing on people defending apple practices by merely claiming it's because og S-Oxley. And especially not when other american companies doesn't do this, and doesn't make the consumer pay extra. It's a crap excuse.
It does have a bearing as an example of how employee stupidity caused consumer to believe that there was corporate malice when it was unwarranted. And also provides a good example of how little a consumer knows about the workings of a large company, and how schizophrenic it can be.
Ah, well. Stretching it a bit, methinks. If you recall, my argument is that this defending Apple and blaming SOX for any and all business practices is bull, and that people have no reason to believe this is anything more or other than business practices – Especially considering their recent past and their competitor's practices.

In that light your argument is at best irrelevant, at worst a (true) strawman argument.

You have to remember, that most of what you're arguing for a corporation. You're defending a corporation by all means, just like any of all the rest who claims they're forced by SOX to do these things. Hell, I even read that they "had to" remove the Disk Mode because otherwise they couldn't live up to SOX because of the accounting.



Despite some real attempts at reform inside a company like Microsoft, some individuals in a position of control over certain situations have made poor choices that have produced consumer outrage recently (and rightfully so). However, it doesn't suddenly make the rest of the company guilty by association.
LOL. I really don't care which part of the monopoly-like company screws customers over. It's still the company that screws people people over. You'resaying that until each and every department and employee have screwed you over, you cannot claim that a (any) company is screwing their customers over. Great logic.


Originally Posted by Tosser
Occam's Razor …
Besides, it's about plausible reasons. Since Apple haven't in any way implied this is anything more than getting extra revenue, which is further supported by Apple letting the user pay exorbitant prices for RAM (even more in the past), Apple having the highest "pay per product" (no idea, what's it called in english: "The pay above cost"?), and that no other company I'm aware of let people pay like this _because of S-OXley, it really is a matter of deducting. And making up excuses based on S-Oxley certainly doesn't adhere to Occam's, neither to common sense.
Common sense also says to never attribute malice to something that can be easily explained as stupidity. So again, we can argue this around in circles until the moon explodes quite randomly and for no apparent reason. Until we have data from Apple (gathered via leaks, investigation, etc) that provides evidence one way or another, we are both simply speculating.

It's true that common sense dictates that. However, you have to look at what is happening. If you write too much off as "stupidity on their behalf", you, yourself will quickly be fit for the monicker "naive".
How can you write this off as "stupidity"? You're telling me that the crippling of the touch and the iphone should be written off as "stupidty". That the tie-ins and lock downs should be written off as "stupidty", that the "pay if you want a less crippled Touch" should be written off as "stupidity" and on and on. No, frankly, that is extremely naive, considering this is not a new, small company, that is coming to market. This is huge corporation, with 18 billions in cash, with some of the best marketing in the world, with enough lawyers and business strategists to think this true. How anyone can even think these things happen because of error (or "stupidity", if you will) is laughable.


Originally Posted by Tosser
Yet another poor excuse.
I am certainly not. People are saying that the S-Oxley means that something that really add features (and therefore "value") force Apple into having the customer's pay.
I think you skipped or missed the part where subscription-based accounting models are handled differently in terms of regulation. That makes a world of difference here. While the product may be sold as a single lump sum up front, it may not be accounted for by the company as a single lump sum up front. TiVo is a good example of where you can buy a lifetime subscription with the box, and yet the revenue you gave TiVo is not being accounted for as a stand-alone product. It is a subscription-based service.

I didn't miss anything. I chose to go after the premise, the foundation. Building atop invalid premises doesn't suddenly make it valid. It the giant on clay feet.
It's still just blaming SOX for everything crap Apple does. It's still just blindly writing things of as something Apple are forced to because of SOX. It's still defending any and all business practices, no matter how they screw people over, by blaming SOX – even though other companies practices are the proof in the pudding: If it were SOX, the other companies would have to do it too. And it really doesn't matter how much you add to that premise. Your premise is just that. Clay feet.


Originally Posted by Tosser
let me tell you a little about SD: They have not only made Bugfixes and small changes to the firmware in their recorders. They have added - mentioning just a few big ones: MP3-recording, MP2-recording, FLAC-recording, and dumping audio to an external drive. Now, that last bit, including simultaneously recording to all discs (HDD, CF-card and the external drive) was added, not just in the firmware, but by having all their recorders shipped back, at their expense, to Wisconsin, to have the board with the FW-chip switched so these features could be added. And get this: Apart from the MP3-recording, nothing of it were promised when they sold the previous recorders (incl. mine).
Besides, the Law is _all about_ generalities.
If the law was about generalities, the supreme court would not slap down laws that were 'overly broad', and we wouldn't have multiple degrees of a particular crime. The law is written in specifics, cases revolve around specifics, and precedents don't always apply in similar cases if the right set of specifics are different.
I see we interpret "generalities" differently. When defined like you do, then I can see your point in that area. However, I defined it as "equality" (you cannot make a law that only applies to white people. That only applies to black people, only to women, only to men, etc.). You have to make a law, that includes or excludes everyone - you can't go "Only black/white/yellow/pink/cream people may apply" or "This grass is off limits to pink people" and so on. Either the grass is off limits, or it's not.



An upgrade to a product that is part of a subscription model is not the same as an upgrade to a stand-alone product. And in the case of regulations on accounting and reporting, it is how the product is accounted (subscription/stand-alone) that matters, not how it is sold to the public. And it does suck that it is the case.
Yes it does suck. What I cannot for the life of me fathom, that even when presented with examples of other companies that do not do it like Apple is doing, you're still blaiming it on accounting. Yet, you somehow utterly fail to recognise – even as you're saying it - that the only ones to blame for this set-up is indeed Apple. How can you argue that it's because of accounting, yet blame SOX, and all the while arguing it's _not_ a choice on Apple's part, that they're not the ones to blame?
When other companies can do even more, without having people pay extra to get a less-crippled product, it's obvious Apple chose this model - not out of "stupidity", but because they chose this business strategy with their eyes open and on purpose.



And happily enough, they make sure you can get iTunes via bundling with the product or as a download.
Ah, yes. Well, then there's no problem with lock-downs, tie-ins and crippling :rolleyes:

The question here is how much of the decision to charge, and how much, is Apple and how much is regulation? We don't know enough specifics to say either way.
Nope. We don't. But we do know that other companies are able to provide upgrades, even to hardware, to add many and very large upgrades to functionality without the consumer paying for it. With that knowledge, we can deduct that it's certainly not necessary to charge for these things, especially at the price Apple charges, that it can be done. And because of this, we can deduct, that this is a business strategy. Unless, of course, you're trying to argue that all the rest of the companies out there, are simply too stupid to recognise what SOX is about. In that case, I guess we cannot blame Apple, it's all the rest that is not going by the law, and all of this is because Apple is just following the law …



First off, don't put in my mouth words I haven't said. I have made it clear my position on Apple charging, and that I don't believe a fee on the order of what was asked for in January makes a whole lot of sense.

That's not putting words into your mouth. The reality is, you're using the accounting model as an excuse. As if the accounting model is something that dictates the business model and strategy to the extent that Apple's hands are tied.

Secondly, you have no more information than I do, and any conclusion you draw is as much based on speculation as any conclusion I draw.
The difference being, that your conclusions, that Apple's hands are tied because of accounting, and we are to blame SOX (and therefore the accounting), that Apple had no choice in this, is contrary to the facts. Just because we both conclude, doesn't mean, that any speculation and conclusion is equally valid. In fact, why is it, that you think that you can blame this on accounting, yet utterly fail to see, that the way these things are accounted for is entiurely Apple's choice – especially given that other companies can do it?

If anything, the difference is that I have seen how big corporations actually operate from the inside, and realize that while most people in a corporation are usually fairly well-meaning people looking for ways to please the most customers with the resources available, as early as possible... all it really takes is one idiot or malicious individual out of 30 thousand to create a fiasco with the customers.
Ah, yes. So because you claim to have seen corporations from within, these choices (business strategy, how they're accounted, and all the crippling) is likely to be just one individual making mistakes. Once again, you utterly fail to recognise that this is not some employee leaking false information, creating a PR-disaster as per your example. This is a busines strategy. YOu cannot write it off as stupidity of one empleyer, when both the crippling (for instance the no Disk Mode), the Tie-Ins, The lock downs, and the "pay-extra" modus is so clear cut. This is by no means a mistake – each and every indicator points in the direction of "strategy". Writing it off as "it could just as well be one employee turning it sour" is so far fetched and out of touch with reality, no matter how much you claim to know corporations from the inside.
 
Can someone point me to links where Apple:

a) states that the price for iPod Touch updates were because of S-Oxley?
b) states that the ability to install apps will be at a price _because_ of S-Oxley?
c) states that they account for different products in a different way, because of S-O?
d)explains _how_ they account for the different products?
e) explains that it is _not_ because they simply are greedy and act like the big corporation that they really are (Apple is only small when compared to Windows, not when compared with any other computer hardware manufacturer)?

Not exactly for the iPod touch, but here's the reasoning behind the Wireless 802.11n update: link

And it pretty much sums up why they are forcing us to pay:
"Further, while generally accepted accounting principles (“GAAP”) do not explicitly require the Company to charge for this upgrade, charging for this upgrade is consistent with the Company’s historical business practices and supports its corresponding application of GAAP at the time of the original sale of the Macintosh systems."

It's never been they had to charge for updates: SOX doesn't say that. If it did, they wouldn't have been investigated for the wireless update charge. This also explains why they don't publicly state exactly why they are charging for it. If they say it was legal reasons, a new investigation would start up.
 
Ah, we're getting somewhere with all of this.

For both Apple TV and iPhone, the Company indicated it may from time-to-time provide future unspecified features and additional software products free of charge to customers. Therefore, sales of Apple TV and iPhone handsets are recognized under subscription accounting in accordance with SOP No. 97-2.

Finally, from the horse's mouth: because Apple decided they didn't want to charge for iPhone/Apple TV upgrades, therefore the devices are recognized under subscription accounting.

Theoretically, they could have chosen to do the same for the Touch - but they didn't. As others have suggested, this may be due to their past accounting for iPod sales. And if the Touch is the "future" of the iPod & more sales shift in that direction, their overall numbers would slip if you didn't account for them all-at-once. Then the stock slips, etc.

Still don't know if I agree with them, but at least that's why.

Not exactly for the iPod touch, but here's the reasoning behind the Wireless 802.11n update: link

Excellent find. Two passages I find partic. interesting:

"As noted in the Company’s March 13, 2007 letter, the Company offers maintenance on certain software products; however, this activity is insignificant relative to the Company’s total net sales."

This is the closest they get to discussing software here, and I assume it covers incremental OS X updates, iTunes, QT, etc. But under that logic, it doesn't seem to mandate charging for Touch apps, 2.0, etc.

"The Company’s process for setting product prices includes such factors as the evaluation of competitive offerings, product costs, and the Company’s belief of the product’s perceived value by its customers."

Translation: as with anything else in business, we charge what we can get people to pay.

All of this is resolved to my satisfaction. I think two things are in play:
-Apple is indeed trying to get money out of people - probably more than "just accounting" requires.
-Apple is gun-shy of the SEC and doing more than it needs to, to ward off further scrutiny of Steve Jobs & its stock-options shenanigans.

But stepping back, the more important issue is consumer reaction & satisfaction. Most people won't hear about Apple's justification, or be dissecting it on MR. They'll just know that every few weeks, iTunes is pestering them with some new thing to buy - and their friend with the iPhone, "which is practically the same," gets it for free. Especially if the Touch is the future of iPod sales, this will affect more & more people. This could come to bite the company in its :apple: - it's an in-your-face flaunting of the "smooth user experience."
 
Yes it does suck. What I cannot for the life of me fathom, that even when presented with examples of other companies that do not do it like Apple is doing, you're still blaiming it on accounting.
You point about other companies "not doing it like Apple's doing it" isn't valid unless you also know how the other companies account for the revenue.

If other companies account for their device revenue on a subscription basis like Apple does for the iPhone and AppleTV, then that accounting allows for them to provide free updates.

The quote below is verbatim from Apple's 2007 10-K filing with the Securities and Exchange Commission.

For both Apple TV and iPhone, the Company may provide future unspecified features and additional software products free of charge to customers. Therefore, sales of Apple TV and iPhone handsets are recognized under subscription accounting in accordance with Statement of Position (“SOP”) No. 97-2. The Company recognizes the associated revenue and cost of goods sold on a straight-line basis over the currently-estimated 24-month economic lives of these products. Costs incurred by the Company for engineering, sales, and marketing are expensed as incurred
http://phx.corporate-ir.net/phoenix...vPXRlbmsmaXBhZ2U9NTA5NDg5MyZkb2M9MSZudW09MTk=
 
Not exactly for the iPod touch, but here's the reasoning behind the Wireless 802.11n update: link

Do notice the price difference between this and the Touch-updates.
Second, do notice, that the Touch is the exact same as the iPhone, software wise.
Thirdly, do notice that they could have chosen to go with a different strategy, had they wanted to.
Fourthly, do notice, that even if the excuse on Apple's behalf is valid when it comes to the 11n-update, that doesn't mean it's valid for a product that from the get-go just had it locked down software-wise.
Fifthly, If I recall correctly, at the time these computers that needed the unlock later were sold, the 11n weren't anywhere near close to a standard. The 11n-firmware update was released later to take advantage of this new standard. I still think that paying for 11n-update is ridiculous.

But those are the differences. In reality I think it was a "feeler" to test the waters before running this new strategy.
It's also important that even though Apple claims these are the reasons, other companies seem to be able to provide these kinds of updates without making believe it's because of SOX.


And it pretty much sums up why they are forcing us to pay:
Really? My emphasis:
"Further, while generally accepted accounting principles (“GAAP”) do not explicitly require the Company to charge for this upgrade, charging for this upgrade is consistent with the Company’s historical business practices and supports its corresponding application of GAAP at the time of the original sale of the Macintosh systems."

They are saying, that "that is how Apple operates, and as such, it's no surprise".

It's never been they had to charge for updates: SOX doesn't say that. If it did, they wouldn't have been investigated for the wireless update charge. This also explains why they don't publicly state exactly why they are charging for it. If they say it was legal reasons, a new investigation would start up.
Yes. And thus it came to be: It's simply a business strategy so they can make as much money as possible on their locked down, tied-in, crippled products all the while screwing the consumer that paid a premium to begin with can be taken over and over again.
 
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