iPod touch Charged for accounting purposes...

[Adokimus]

These features (for both iPod Touch and iPhone) will come in the 2.0 Firmware release that will be released in June. All iPhone owners will get this update for free, but iPod Touch owners will be charged a small fee for accounting purposes.

I hate how Apple spins it again for their unknowing consumers. There is nothing, repeat NOTHING in the Sarbanes-Oxley act requiring that they charge for a software upgrade. Yes, Apple needs to properly allocate where it's expenses and profits go, but it doesn't need to charge more to do this. We heard the same line when we wanted to enable wireless-n that was already in the $2,000+ computers we bought, and again when the iPod touch recieved the same software that the iPhone had for months. Again, this is not an accounting requirement. This is just business and greed. There are no charging requirements to SOX, just reporting requirements. Apple's line about being required to charge us is nothing short of a lie and false advertising. Blows my mind that they get away with it.

Note: Apple TV owners weren't charged with an upgrade fee (because Apple saw there was more money to be made renting movies to Apple TV owners than there was in charging for the upgrade). We're also not charged for OS X automatic software upgrades, or iPod software upgrades, and iPhone owners aren't charged for the same upgrades as the touch is.

While I dislike being charged over and over for software upgrades, what really ticks me off is that Apple lies and phrases it like they are required to charge us. They should just be honest and admit that the larger they get, the more like microsoft they become. Greed, short and simple.

 

[TEG]

The iPhone and AppleTV's income are taken throughout a time period (one or two years) therefore it is easy to account for the new features. iPods, including the iPod touch, are all accounted for in a lump sum, therefore the addition of features either requires a retstatement of earnings or a charge. The SEC doesn't like restatement of earnings, unless necessary, so they are charging.

Get over it!

TEG

 

[Adokimus]

The iPhone and AppleTV's income are taken throughout a time period (one or two years) therefore it is easy to account for the new features. iPods, including the iPod touch, are all accounted for in a lump sum, therefore the addition of features either requires a retstatement of earnings or a charge. The SEC doesn't like restatement of earnings, unless necessary, so they are charging.

Get over it!

TEG

Apple TV's income is taken in a lump sum just the same as the iPod touch. And just like the Apple TV, I can purchase movies and songs over iTunes with my iPod touch over a two-year period. Don't see your point. My point is that Apple is misleading their consumers by implying that they have no choice but to charge us. Your suggestion to "get over it" tells me you're not much of an advocate for proper and honest business practices.

 

[hexonxonx]

Apple TV's income is taken in a lump sum just the same as the iPod touch. And just like the Apple TV, I can purchase movies and songs over iTunes with my iPod touch over a two-year period. Don't see your point. My point is that Apple is misleading their consumers by implying that they have no choice but to charge us. Your suggestion to "get over it" tells me you're not much of an advocate for proper and honest business practices.

Better sell your iPod now, you'll never be happy again.

 

[Adokimus]

Better sell your iPod now, you'll never be happy again.

Keep in mind that I'm not that angry with the fact that they are charging for these upgrades. I am angry that they are lying and making it seem as though they are forced to charge us by the evil SOX Act. I'm more angry that people believe them. If Apple was just honest and said that they were charging us because they are a business and they want to make money, I would be fine with that. My solution is that I'm just not purchasing any of the upgrades. I'll wait until I buy a 3G iPhone with 32+ GB SSD, 3G, and microsoft outlook support. In the meantime, I'm very happy with my iPod touch and I'll make due.

 

[TEG]

Apple TV's income is taken in a lump sum just the same as the iPod touch. And just like the Apple TV, I can purchase movies and songs over iTunes with my iPod touch over a two-year period. Don't see your point. My point is that Apple is misleading their consumers by implying that they have no choice but to charge us. Your suggestion to "get over it" tells me you're not much of an advocate for proper and honest business practices.

Wrong. They have stated time and again, that the TV's income is spread out. I know from which I speak, as the company I work for was sued because they added a feature with out charging for it.

TEG

 

[IgnatiusTheKing]

This is just business and greed.

Why does making a smart business move have to be equated with greed? If they didn't think they could make any money by charging for the new software, they probably wouldn't charge for it. Knowing they can, however, means that it is a smart business decision to charge for something people are willing to buy.

As for TV, I think it's pretty apparent Apple gave that upgrade away for free because the product was a flop. Take 2 was a way to get that product to sell and it appears to be working. Another smart business decision.

 

[jasonmac21]

The original poster is absolutely right. Anyone who think there is some law or accounting practice that stipulates they must charge is simply wrong. It's just not true. It's a rumor and a way for Apple to spin the fee. What don't you people get about this?

As for the people who say if you don't want to pay then don't, you bought the ipod touch for what it is bla bla bla. Well, again you're wrong. I bought the ipod touch knowing that I will be able to download and install programs. I have no problem at all paying for additional programs (save for the one's that were already on the iphone, another Apple scam). Paying for a software update that adds the ability to buy software is actually quite humerous. Just think, next time you walk into the Apple Store, "oh sir, it's $5 to enter cause we just remodeled".

I can't believe some of you are OK with PAYING for an update that iphone users get for free. Oh oh, but iphone users pay a monthly fee. THAT'S BECAUSE IT'S A PHONE I PAY A MONTHLY FEE FOR MY PHONE TOO. Their not paying Apple, they're paying ATT.

If the update is say $2-5 I'll probably end up buying it once decent apps come out, otherwise I'll stick with my jailbroken ipod touch.

 

[kockgunner]

why does an update have to cost anything? they don't generate any expenses by putting out apps for people to download. what difference does it make if the ipods they sell contain some software or not? on the balance sheet, it's still an ipod

 

[ansalmo]

Wrong. They have stated time and again, that the TV's income is spread out. I know from which I speak, as the company I work for was sued because they added a feature with out charging for it.

TEG

OK, so why didn't they instead spread out the Touch's income in the same way, so that they wouldn't need to charge for updates. It sounds from what you're saying that they have the choice, but have chosen the route that is less palatable for the consumer - and also charged a non-nominal fee for the last set of updates. It does sound like they're using the legislation as an excuse.

Given that they "found a way" for the tv, I'm sure a company of their innovation could have joined the dots to do something similar for the iPod touch if they really wanted to.....

 

[rjfiske]

OK, so why didn't they instead spread out the Touch's income in the same way, so that they wouldn't need to charge for updates...

Point's valid. But I have a question for you. Why are you PAYING for the update at all? You bought your Touch given a certain criteria. These updates do not change in the slightest the terms under which you bought your Touch in the first place. These updates (which you must pay for) add features that were not available nor were they revealed when you bought your Touch originally.

If you want the update then you must see value in it. At it's most basic level (leaving aside accounting, greed, the position of the moon and the stars, etc.) can you not see paying for something of value? Or more appropriately, can you not see Apple charging for adding value?

 

[ansalmo]

Point's valid. But I have a question for you. Why are you PAYING for the update at all? You bought your Touch given a certain criteria. These updates do not change in the slightest the terms under which you bought your Touch in the first place. These updates (which you must pay for) add features that were not available nor were they revealed when you bought your Touch originally.

If you want the update then you must see value in it. At it's most basic level (leaving aside accounting, greed, the position of the moon and the stars, etc.) can you not see paying for something of value? Or more appropriately, can you not see Apple charging for adding value?

Fair enough - it just seems very inconsistent though. I have an tv and an iPod touch. New functionality comes out on the tv and I get it for free - cool. New functionality comes out on the touch and it costs me $20 (actually $25 as I'm in the UK - and with VAT, that would only be $23.50, but don't get me started on that again!) - less cool, but I still stumped up the cash straight away.

Now, the cynic inside me might think that the tv update was free because it not only gave me more functionality, but also added an additional potential revenue channel for Apple with the iTunes videos, whilst the touch apps didn't. But that would make me very cynical, wouldn't it?

 

[jbarr]

iPhone ($399) + 2 year AT&T base service ($1,440) = $1,839

iPod Touch ($299) = $299

$1,839 - $299 = a crap-load of applications!

As an iPod Touch owner who doesn't require a camera or always-on connectivity, I'm very satisfied, and the necessity to drop a few bucks here or there is really inconsequential.

 

[aethelbert]

AFAIK, Apple has never stated that law as a reason for charging...

Did you get pissed off when Apple announced that Leopard would be $129 and not free? After all, it works on the same systems that Tiger did...

If you don't want to buy it, then don't. Nobody here wants to listen to you complain.

 

[rjfiske]

Fair enough - it just seems very inconsistent though. I have an tv and an iPod touch. New functionality comes out on the tv and I get it for free - cool. New functionality comes out on the touch and it costs me $20 (actually $25 as I'm in the UK - and with VAT, that would only be $23.50, but don't get me started on that again!) - less cool, but I still stumped up the cash straight away.

Now, the cynic inside me might think that the tv update was free because it not only gave me more functionality, but also added an additional potential revenue channel for Apple with the iTunes videos, whilst the touch apps didn't. But that would make me very cynical, wouldn't it?

At least you're only cynical. I however am envious. You have an Apple TV and a Touch... I have neither.

Anyway, yeah seems inconsistent. I still don't have an issue with it though. Granted I haven't yet had to pay for it. Talk to me in a year when I actually own one.

 

[Jack Flash]

AFAIK, Apple has never stated that law as a reason for charging...

Did you get pissed off when Apple announced that Leopard would be $129 and not free? After all, it works on the same systems that Tiger did...

If you don't want to buy it, then don't. Nobody here wants to listen to you complain.

For the love of God stop equating this to Leopard. Apple is implementing updates to applications that we already bought. These are intended to be free. Apple is essentially selling Touch owners the ability to pay Apple money through the AppStore.

So, to use your analogy... you bought your Mac and you bought Leopard. Should you have to pay Apple to put the disc in your DVD drive?

 

[aristobrat]

Apple TV's income is taken in a lump sum just the same as the iPod touch.

Here's a direct link to Apple's SEC filing:
http://phx.corporate-ir.net/phoenix...vPXRlbmsmaXBhZ2U9NTA5NDg5MyZkb2M9MSZudW09MTk=

It specifically states that they do NOT take AppleTV income in a lump sum.

The Company began shipping Apple TV in March 2007 and iPhone in June 2007. 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.

 

[Jack Flash]

Here's a direct link to Apple's SEC filing:
http://phx.corporate-ir.net/phoenix...vPXRlbmsmaXBhZ2U9NTA5NDg5MyZkb2M9MSZudW09MTk=

It specifically states that they do NOT take AppleTV income in a lump sum.

We need to find out how Microsoft and Sony account for their Zune and PSP devices.

 

[IgnatiusTheKing]

For the love of God stop equating this to Leopard. Apple is implementing updates to applications that we already bought. These are intended to be free. Apple is essentially selling Touch owners the ability to pay Apple money through the AppStore.

So, to use your analogy... you bought your Mac and you bought Leopard. Should you have to pay Apple to put the disc in your DVD drive?

No, that's not an effective analogy at all.

The Leopard analogy works very well considering touch 2.0 will be a major upgrade to the touch's operating system. It will give you the ability to run applications you could not run before, much like Leopard gives you the ability to run Time Machine and a host of other things that won't work on Tiger.

Apple is not going to force anyone to upgrade to 2.0, just as they aren't forcing anyone to upgrade past 10.4 (or 10.x for that matter). If you don't want to pay to upgrade, don't. I'm not going to right away unless there's a release-date app that knocks my socks off. If I never see a new app I think is worth the $20 (or whatever they charge for 2.0), I may never upgrade.

It's pretty simple.

 

[scotty96LSC]

iPhone ($399) + 2 year AT&T base service ($1,440) = $1,839

iPod Touch ($299) = $299

$1,839 - $299 = a crap-load of applications!

As an iPod Touch owner who doesn't require a camera or always-on connectivity, I'm very satisfied, and the necessity to drop a few bucks here or there is really inconsequential.

Ditto Jim.
Don't like, don't buy.

 

[scotty96LSC]

We need to find out how Microsoft and Sony account for their Zune and PSP devices.

I think for the Zune Microsoft goes to the junk drawer of consumer households and looks for them.

 

[aristobrat]

OK, so why didn't they instead spread out the Touch's income in the same way, so that they wouldn't need to charge for updates. It sounds from what you're saying that they have the choice, but have chosen the route that is less palatable for the consumer - and also charged a non-nominal fee for the last set of updates. It does sound like they're using the legislation as an excuse.

They made their decision on how to book the iPod touch revenue and now they have to live by it. If they want to change it, they'll have to restate (lower) their already published earnings from since the iPod touch was launched.

You're armchair quarterbacking this 7 months after the iPod touch has been launched.

In light of the SDK and their decision to put the 5 apps on the iPod touch, it doesn't seem "consumer friendly" that they wouldn't accrue iPod touch revenue the same as the iPhone and AppleTV.

So this either means they made a bad decision (based on how things have changed since the iPod touches launch) about how to book revenue that they can't easily fix, or they're being greedy.

If they were being greedy, then their decision to include the 5 applications for free on all new iPod touches doesn't make sense when they could charge the $20 from every iPod touch owner (current and future).

 

[aethelbert]

For the love of God stop equating this to Leopard. Apple is implementing updates to applications that we already bought. These are intended to be free. Apple is essentially selling Touch owners the ability to pay Apple money through the AppStore.

So, to use your analogy... you bought your Mac and you bought Leopard. Should you have to pay Apple to put the disc in your DVD drive?

That analogy sucks. The updates were not intended to be free. You just think that you deserve them for free. We don't know all of the features of the final 2.0. Hell, they could add new stuff that wasn't mentioned yesterday. How is this not like Leopard? It's an OS upgrade, exactly what 10.5 is.

Nobody promised you free updates, you just expect them. And then when your expectations weren't met, you come here to complain about that. They have to develop the software, which costs money.

Since you don't like my Leopard analogy, let's do something else. How about iLife? When Apple releases new versions of iLife (which is new and improved apps), do you get mad that you don't get them for free? Because right now, you're expecting new and improved apps for free, just for a different device. Everyone, from the first iPhone sold to the latest production week of iPods, has to pay for this update to get it. If you don't want the update (which you obviously don't because you think it's a rip off), don't buy it. It's that simple. Nothing is gonna change because you complain on a forum.

 

[AppleFan360]

iPhone ($399) + 2 year AT&T base service ($1,440) = $1,839

iPod Touch ($299) = $299

$1,839 - $299 = a crap-load of applications!

As an iPod Touch owner who doesn't require a camera or always-on connectivity, I'm very satisfied, and the necessity to drop a few bucks here or there is really inconsequential.

The above post pretty much tells the story. Whether or not you believe that Apple lied about something, the simple fact is that you are paying very little keep your iPod Touch current. For the love of Pete, $20????? A drop in the bucket. Besides, the software update is not required. It's not like you lose anything if you don't upgrade.

 

[Loge]

Since there will be the ability to distribute free applications via iTunes, it seems we are in the rather silly position that everybody except Apple will be able to provide free software for the iPod touch.