Apple Lies About Why They Charge iPod Touch Owners For Updates

Discussion in 'iPod touch' started by Full-Throttle, Jul 12, 2008.

  1. Full-Throttle macrumors member

    Jun 22, 2007
    Ok, before I start on this let me first state that I really do like Apple and their products. I own a G4 PowerBook, a Macbook, and a 16GB iPod Touch. I have also convinced some of my friends and family to switch from PCs to Macs, so I am not an Apple hater or Microsoft fan boy by any stretch of the imagination.

    When Apple released the first software upgrade/update to iPhone and iPod Touch owners in January, iPhone owners got it for free while iPod Touch owners had to pay $19.99. Their reason for this was iPhones are on a subscription accounting model, while iPods are not, so any new features must have a cost attached to them as supposedly required by law (Sarbanes-Oxley Act), and the cost must be relative to the new features "value". So Apple charged $4 per new app (Mail, Stocks, Weather, Notes, and Maps). I agree that this is a reasonably fair price for these apps, and I purchased it a few days after it came out.

    Apple just released the the 2.0 software upgrade, and again iPhone owners get it for free and iPod Touch owners are required to pay. This is fine because of the supposed accounting laws that require it, but there is a problem. The cost of the upgrade is supposed to be relative to the value of the new features, yet the 2.0 upgrade costs $9.95 and includes not only new features like Microsoft Exchange support and a new Calculator, but it also contains the January App pack.

    How is it possible that a new upgrade that has more features than the original can cost half, if the accounting laws require the price to coincide with the value of the new features? It is clearly not possible or logical that more features could cost less when the price is dictated by the value of the features. I think that Apple just uses this as an excuse to milk iPod Touch owners for extra cash.

    What do you think?
  2. JNB macrumors 604


    Oct 7, 2004
    In a Hell predominately of my own making
    The "value" is what the company places on it. SOX doesn't have rules on how to calculate it, only where it applies and how it must be accounted for. Apple didn't have to reduce the upgrade price by 50%. Would you be happier if they charged $19.95?

    Hardly a lie, as that would get them in more trouble than not charging for it in the first place.
  3. Full-Throttle thread starter macrumors member

    Jun 22, 2007
    The way Steve Jobs said it in his January keynote, it was like he did not want to charge for the app pack, but the law required it and at that price of $19.99. He also said (at I believe WWDC) that they were not looking to make money off the 2.0 upgrade, but if that were the case, then why not charge $1 or $2, like they did with the 802.11n Macbook driver update? Also, why is the price the same for people that purchased the January App Pack as those that did not?

    Finally, if Apple is free to set the price at what they want, then you just proved my point. If they were only charging because they were required to by law, then they would not have set the prices at 19.99 for the January App Pack and 9.95 for the 2.0 Firmware/App Pack combo.
  4. ricartedor, Jul 13, 2008
    Last edited: Jun 3, 2014

    ricartedor macrumors member

    May 12, 2008
    Of course they're charging to make money, they are a company and by extension are driven by profit, they know people will pay for these updates so they are charging as much as they want for you to get them. It makes perfect economic sense!
  5. megahertz macrumors member

    Jul 11, 2008
    Apple charges us because we're idiots in love with Apple and therefore will pay any amount they throw at us for any new thing that's available.
  6. imnotatfault macrumors regular

    Jan 26, 2004
    The fact that the key feature is to enable users to purchase apps that they get a cut of is the part that troubles me the most about "feeling compelled to charge."
  7. tdhurst macrumors 601


    Dec 27, 2003
    Phoenix, AZ

    How much longer are people going to whine about this?

    If you don't like it, don't pay the money. It's pretty simple.

    No amount of conversation here is going to change a single damn thing. No amount of logic here is going to change anything. Either accept it and buy it or don't accept it and don't buy it.

    I'm not real happy about the whole sun going down at a slightly different time every day, nor am I happy that Starbucks charges so much for their lattes, but complaining about either isn't going to change anything.
  8. imnotatfault macrumors regular

    Jan 26, 2004
    I don't think any (many?) of us are deluded enough to think we're going to change their mind.

    although, actually, it worked in canada.
  9. CWallace macrumors 603


    Aug 17, 2007
    Seattle, WA
    As imnotatfault noted, one of the biggest benefits of the new iPod Touch software to Apple is it allows iPod Touch users to now buy applications that Apple themselves gets a cut of. So it is in their interests to give it away for free, but SOX won't let them.

    As to the value, the update may have the same $20 value to Apple as the first one did, but since the iPod Touch will now be generating additional revenues for Apple via application sales, they likely decided to give folks a "discount" with the hopes they would spend more then that $10 on applications when they first connect to the App Store.
  10. Full-Throttle thread starter macrumors member

    Jun 22, 2007
    I understand that Apple is a business and they are out to make money, and I don't have a problem with that.

    What I do have a problem with is them claiming the reason they are charging for the update is solely because of a law. That is a half truth. Yes they may be required to charge something for updates, but not at the prices they are setting.

    I'm fine with them making money; I just want them to be straight with us, an not put the blame on a law when the truth is they found another place to make money. Is honesty too much to ask for?


    Pointing out that a company is not being entirely honest is not whining.
  11. aethelbert macrumors 601

    Jun 1, 2007
    Chicago, IL, USA
    When have they ever come out and stated that law to be the reason for charging? They've said that they "account for the iPod touch a little bit differently," but they've never blamed it on sox.
  12. JAT macrumors 603

    Dec 31, 2001
    Mpls, MN
    The only half truth is in them claiming they can't find a different way around SOX. Seriously, you think $10 is too much for the 5 apps and a major OS upgrade? What do you think of the $129 price on Leopard?

    Actually, the above statements come across very whiny.
  13. Heather1 macrumors regular


    Jan 13, 2008

    You're one of a few people with brain out there. I absolutely agree with you.
  14. Full-Throttle thread starter macrumors member

    Jun 22, 2007
  15. Baron58 macrumors 6502

    Feb 19, 2004

    The only way to reply to this thread is by quoting the best. post. evar. that addresses it correctly:
    I wish that what I quoted from tpaltony were stickied and mandatory reading for anyone who even thinks about posting lame threads about paying for iPod touch updates. I disagree with the SOX requirements as they apply to software updates like this, BUT just because I disagree with it doesn't make it less real.
  16. dellavoce macrumors regular

    Oct 14, 2007
    I'm complaining. Why should you have to pay to have the latest copy of the firmware? You don't have to pay to update iTunes, most of the time you don't have to pay to update your iPod. And as has been pointed out this update makes it more convenient to buy more stuff so why charge? 10 bucks is not a small amount of money.
  17. gentlegiantcrai macrumors regular

    Sep 25, 2007
    Haven't you heard...

    "Half the Price, Twice the Apps"
  18. nordesmic macrumors member

    May 2, 2005
    Adelaide, Australia
    If you pay $300 for a new iPod then $10 is a relatively small amount of money.
  19. imnotatfault macrumors regular

    Jan 26, 2004
    Well it's annoying to JUST have purchased something then find out that you're not even getting full functionality.
  20. .Andy macrumors 68030


    Jul 18, 2004
    The Mergui Archipelago
    But this is no ones fault but your own for not researching the product you're purchasing.

    Way to read the thread.
  21. imnotatfault macrumors regular

    Jan 26, 2004
    Rock and hard place. Had to purchase computer when I did (7/1), had to get iPod with computer.

    And it's not a matter of fault. I just disagree, from both a personal and a business standpoint, charging a recent purchaser, and if what the c. serv reps are saying, charging future purchasers as well.

    I'm not naive enough to say I don't understand SOX and why it exists or why businesses seek to make money. However, no one here can argue the good faith Apple could have produced by charging a minimal amount (802.11n) for the upgrade, especially seeing as how they make money on our use of the App Store. No one can contend that point, simply because if in one day, Super Monkey Ball can generate $30k net (from when Macrumors posted the stats), Apple alone made $13k on an app that they spent NO MONEY developing themselves. They develop the SDK and developers program away. Yes, I understand the simplicity of the explanation, but it goes to show that there is an insane economic benefit and good faith goes a long way.
  22. volsfan macrumors regular


    Apr 9, 2008
    that is completely ridiculus. I think everyone who bought the jsu should get ten dollars back
  23. dukebound85 macrumors P6


    Jul 17, 2005
    5045 feet above sea level
    so if the iphone revenue is recognized after 2 years, will iphone owners have to pay for any additional features after those 2 years?
  24. goosnarrggh macrumors 68000

    May 16, 2006
    Apparently not. It seems that simply by virtue of the fact that Apple recognized its revenue (for example) for the Apple TV over a certain non-instantaneous period of time, they are now free and clear to provide ongoing free feature enhancements for the Apple TV in perpetuity without ever running afoul of currently accepted accounting practice.

    Because they chose to recognize the revenue for the sale of an iPod Touch as all arriving at a single instant, they are apparently obliged to charge for every feature enhancement. Pretty convenient obligation, eh?
  25. Loge macrumors 68030


    Jun 24, 2004
    Any SOX experts care to explain why they are not charging iPod touch owners for the remote app, then? That is certainly a feature enhancement.

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