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iPod touch Apple Lies About Why They Charge iPod Touch Owners For Updates

Apple is full of it.

I totally agree with original poster. If SOX was so stringent, then how was Microsoft able to update the Zune with new unannounced capabilities without any additional cost? I've no problem with Apple charging money for their updates, but let's not pretend the US government if forcing Steve Jobs to take our money.
 
shaba said:
I totally agree with original poster. If SOX was so stringent, then how was Microsoft able to update the Zune with new unannounced capabilities without any additional cost? I've no problem with Apple charging money for their updates, but let's not pretend the US government if forcing Steve Jobs to take our money.
Click to expand...

Would you be happier if they just charged for the update and didn't blame it on the accountants?

Microsoft may have a completely different accounting system. Microsoft may be breaking the law. Who knows?

In the end, I'm actually glad people are complaining about the cost (even if I'm sick of hearing it) because it means Apple will think twice about how much they charge for the next update. Perhaps all the complaints about the $20 upgrade are what caused Apple to reduce the price to $10 this time.
 
Then why doesn't Sony charge use for updates with the PS3 or PSP via fw? What about XBOX 360 upgrades? They all add new features yet we don't have to pay for them. Do they have some other way of covering the costs that makes the consumer pay for nothing? Doesn't make sense that Apple has us pay will Sony/Microsoft don't.
 
Baron58 said:
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.
Click to expand...

But if law were the only reason, they could charge $0.01. They don't. Therefore the original statement that they're charging that value because they want to make a profit still stands, even moreso now that there's talk of the new touches not coming with 2.0 preinstalled...
 
Everyone, using the Microsoft and Sony examples are not valid arguments because we don't know how their accounting recognizes the revenue from their products.

I am not positive about this, but couldn't Apple have recognized the revenue from the 2.0 update over 2 years, so that anyone that purchased the 2.0 update would receive free upgrades in the future? If so, then that would prove my original statement. Could an accountant or someone involved in corporate finances give some incite?
 
Loge said:
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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It's not. They just charged you ten dollars for a new feature: The ability to download and run applications. But applications like the "remote" application are products that are separate from the iPod Touch. Apple is free to create separate products (like applications) and give them away for free.

Another poster asked why Apple is allowed to add features to the iTunes application for free: What is not allowed is charging money for an incomplete product, recognising the whole amount in the books, and add the missing parts later at no charge, because then Apple would have money on their books for things that they haven't produced yet and for which no cost has been accounted for yet, which would make them look more profitable than they really are. Since Apple doesn't charge for iTunes, that is not the case here.
 
ricardo.hudson said:
But if law were the only reason, they could charge $0.01. They don't. Therefore the original statement that they're charging that value because they want to make a profit still stands, even moreso now that there's talk of the new touches not coming with 2.0 preinstalled...
Click to expand...

The SEC has just about now closed an investigation against Apple. Claiming you are charging money because you charged $0.01 is inviting a lawsuit.
 
The value dropped over time. The initial 4 apps were new to the Touch platform a year ago (nearly). No other Touch's had them. Now, many updated iPods have been sold.

Apple can probably show that some percentage of users -say 15% never upgraded and are getting a bit iof a freebie with this upgrade. But the majority have it. Apple felt the new enhancements were worth $9.99. Also, economy of scale. A few hundred thoousdand Touches vs millions of them. The overall income to Apple is now greater and the price can be lower and still reflect the 'value' Apple places on these enhancements.
 
shaba said:
I totally agree with original poster. If SOX was so stringent, then how was Microsoft able to update the Zune with new unannounced capabilities without any additional cost? I've no problem with Apple charging money for their updates, but let's not pretend the US government if forcing Steve Jobs to take our money.
Click to expand...

Because Microsoft is Microsoft and face hordes of anti-trust suites on a daily basis; and because we all know Microsoft is evil. Bottom line is, Apple likes money and knows their minions will pay whatever they charge.

So a big one finger salute from me to you, Apple Inc.
 
gnasher729 said:
It's not. They just charged you ten dollars for a new feature: The ability to download and run applications. But applications like the "remote" application are products that are separate from the iPod Touch. Apple is free to create separate products (like applications) and give them away for free.
Click to expand...

Sorry, but your argument is invalid. If they are free to give away applications, then they would not have been required by law to charge for the January App Pack. Yes they did add new iPhone/iPod Touch specific features to the 2.0 upgrade, but they only added Mail, Stocks, Weather, Notes, and Maps in the January App Pack. As everyone knows, Mail, Stocks, Weather, Notes, and Maps are all applications, not physical features for the iPhone/iPod Touch, and thus not tied to the hardware, like the 802.11n MacBook update.
 
Full-Throttle said:
Sorry, but your argument is invalid. If they are free to give away applications, then they would not have been required by law to charge for the January App Pack. Yes they did add new iPhone/iPod Touch specific features to the 2.0 upgrade, but they only added Mail, Stocks, Weather, Notes, and Maps in the January App Pack. As everyone knows, Mail, Stocks, Weather, Notes, and Maps are all applications, not physical features for the iPhone/iPod Touch, and thus not tied to the hardware, like the 802.11n MacBook update.
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What's a "physical feature?" Just another invented debating point apparently.

Please don't take this the wrong way, but this entire debate is completely pointless. Not only don't any of us know precisely what Sarbanes-Oxley requires in terms of accounting, we know even less about how Apple's bean counters interpret what it requires. All we know for certain is that they are charging $10 for the upgrade, which we can chose to buy or not to buy depending on whether we believe it to be worth the money. So in fact all of this pointless debating boils down to a very simple consumer calculation.
 
I think what got me a little bit is that I paid for $20 Jan update then had to pay $10 more for this one while people who never did the Jan update got it for half the price I paid and all the new stuff.
Early Adopters : $30
New Adopters: $10

not really right.
 
gnasher729 said:
The SEC has just about now closed an investigation against Apple. Claiming you are charging money because you charged $0.01 is inviting a lawsuit.
Click to expand...

I don't get your point.
I said that people who claim apple is charging you for the 2.0 update only to comply with law are missing the fact that apple COULD have charged $0.01. The fact that they charge more shows that apple are trying to make a profit. I don't think this is wrong of them, as they are adding features and why not make a profit from adding new functionality. The only problem i (and most of the other posters) have is that people justify this cost by saying that apple are required by law to charge this much and are therefore only complying with law.

The only information apple has publicly provided is Steve Jobs' comment that 'we account for the touch a little differently' which i personally took to mean 'we want to make some money from touch users'. And why not?

I just don't get some people defending the cost as law when it's clearly trying to make some profit, if not a huge one.
 
So... if they're not allowed to give the thing away for free, what's stopping them from selling it to us for $0.01?

Technically, the January Update Pack didn't really give us new applications, it just unlocked ones that were already there. The update was 12kb, do you really think that those apps fit into 12kb?

Edit: Ah, I see someone already said that about the $0.01... but a lot of places "sell" things for $0.01. See: 75% of Amazon.com cellphones.

Edit 2: Also, you have to wonder why other companies don't do this. I've NEVER heard of firmware updates that weren't free. The Wii, PS3, PSP, and Xbox 360 all get firmware updates for free, and just like the iPod's App Store, the consoles (sans PSP) allow users to buy optional applications, but they don't make firmware cost money. Also, these firmware updates do provide more functionality FOR FREE, so how is it that they aren't infringing on this law?
 
cuanurse said:
I think what got me a little bit is that I paid for $20 Jan update then had to pay $10 more for this one while people who never did the Jan update got it for half the price I paid and all the new stuff.
Early Adopters : $30
New Adopters: $10

not really right.
Click to expand...


I agree to some extent..but then again you've been using the jan update for 7 months now. I for one am quite happy I didn't update in January and am getting everything for 10 bucks. :D
 
It is NOT SOX

Full-Throttle said:
Everyone, using the Microsoft and Sony examples are not valid arguments because we don't know how their accounting recognizes the revenue from their products.

I am not positive about this, but couldn't Apple have recognized the revenue from the 2.0 update over 2 years, so that anyone that purchased the 2.0 update would receive free upgrades in the future? If so, then that would prove my original statement. Could an accountant or someone involved in corporate finances give some incite?
Click to expand...

It is NOT because of SOX, and Apple never said it was. They say to the general public it's "accounting reasons" and they say to the SEC that it's because of a different regulation. People just keep repeating it's SOX so everyone believes it. Why would they lie about something as ridiculous as this in SEC filings? (when stock options had them in trouble). Are people now saying that the "n" upgrade was worth as much as either of the iPod Touch updates? The regulation doesn't specify how much to charge, but I'm sure it needs to be justifiable: $19.95 for 4 applications, $9.95 for one more major software upgrade sounds justifiable to me.

It has to do with selling hardware and software combined (from my final link: "As a result, software products that are essential to the function of any nonsoftware products will also be included under the scope of SOP 97-2. " ) So your solution would not work, they already sold a nonsoftware product with a "software product that is essential to the function" of it.

Shareholders don't like too much to be recognized over time, especially for a company like Apple that doesn't normally break down sales by individual product. It's also more complicated to recognize revenue this way.

Apple's quarterly SEC filing:

http://sec.edgar-online.com/2007/05/10/0001104659-07-037745/Section8.asp

"For Apple TV and the iPhone, the Company plans to provide future unspecified features and additional software products free of
charge to customers. Accordingly, the sale of the Apple TV and the iPhone handset are accounted for under subscription accounting in accordance with Statement of Position ("SOP") No. 97-2. As such, the Company defers the associated revenue and cost of goods sold at the time of sale, which will then be recognized on a straight-line basis over the currently estimated 24 month economic life of these products. Costs incurred by the Company for engineering, sales, and marketing will continue to be expensed as incurred."

Description of "SOP" No 97-2, if you're interested.

http://www.nysscpa.org/cpajournal/2005/405/essentials/p38.htm
 
cuanurse said:
I think what got me a little bit is that I paid for $20 Jan update then had to pay $10 more for this one while people who never did the Jan update got it for half the price I paid and all the new stuff.
Early Adopters : $30
New Adopters: $10

not really right.
Click to expand...

Agreed. All some people are trying to say is Apple is crapping on early adopters.

And there is nothing inaccurate about that.

It's basically one of the few apple product lines, with a secondary market, that have really been successful enough for them to treat their customers the same way that most big businesses treat their's.

You have to be a lot nicer when you need people to buy your product, but when they are standing in line you can crap on them all day long. Viva la Apple. get used to taking it from Jobs, because he going to go back door on you Microsoft style now.

Nothing like getting teabagged when you have been supporting their business for some time.

I paid the $20 in Jan and the $10 this weekend, at least let people vent a little frustration about it, since we could have gotten it for free if we waited to buy instead of jumping in feet first.
 
jplan2008 said:
It is NOT because of SOX, and Apple never said it was. They say to the general public it's "accounting reasons" and they say to the SEC that it's because of a different regulation. People just keep repeating it's SOX so everyone believes it.
Click to expand...

Actually it appears that almost nobody believes it; they'd prefer to believe in conspiracy theories. But the general sense is that the Sarbanes-Oxley law drives Apple towards reporting revenue in this way. I have no way of knowing whether this is true, and as nearly as I can tell, neither does anybody else -- which is why this debate is so completely pointless.
 
cuanurse said:
Early Adopters : $30
New Adopters: $10

not really right.
Click to expand...

The early adopters *always* pay more -- think about it. In 1985 I paid $1,500 for a 40-pound computer with 512 KB of RAM and no HD. In 2008 I can get a 1-inch thick computer with 2GB of RAM -- 4,000 times more -- for 30 percent less money.

Technology gets cheaper over time; there's no getting around it. You can either wait for technology to get cheap enough to afford, or buy it early and pay more.

In the fall, Apple will most certainly update its entire line of iPods. Will you be complaining that your older, slower iPod cost more money than the newer, quicker, better ones? Or will you just be lining up to buy one?
 
Clearly this is a hot issue. Sadly there is nothing you can do about it other than buy the update, not buy the update, or steal it. No matter the reason, Apple wants money from Touch owners for the 2.0 update. It doesn't matter who wins this debate.
 
IJ Reilly said:
Actually it appears that almost nobody believes it; they'd prefer to believe in conspiracy theories. But the general sense is that the Sarbanes-Oxley law drives Apple towards reporting revenue in this way. I have no way of knowing whether this is true, and as nearly as I can tell, neither does anybody else -- which is why this debate is so completely pointless.
Click to expand...

It's not pointless, because so many people are pushing that it's a SOX thing, when clearly Apple decided to charge iPod touch owners for additional apps in January but are now providing some additional apps for free.

Don't get me wrong, I'm not complaining about the charges, I think it was good value. Clearly Apple thought the January update was a fair price for iPod touch owners so that is what they charged.
 
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