Thank you! All the whining about Apple just wanting more money was getting annoying.
Also, the App Store being free doesn't require a restatement of earnings because of their 30% commission covers the earnings requirement
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Apple's $0.99 FaceTime Charge Due to Accounting Requirements
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Thank you! All the whining about Apple just wanting more money was getting annoying.
Also, the App Store being free doesn't require a restatement of earnings because of their 30% commission covers the earnings requirement
Could be the case. I know they get a paid there, is that due to the accounting rule or just good business? Say it is both, then case closed for me.
But, have to say it's still a very silly rule.
That's a good point, but what if you never purchase anything from the App Store? Effectively, I have received a "new feature" which was never part of the original OS purchase, so why doesn't the accountancy rule apply?
Or, let's consider iTunes... when it got upgraded to version 10, it included PING and various other new features which were never part of the original version or OS... same for Safari. Why can Apple give Safari away for free? Couldn't they just say "FaceTime HD" is a free to download Application? Just like Safari, just like iTunes?
In my opinion, this has nothing to do with Accountancy. This is Apple testing the waters for the future.
And from the sounds of things, a lot of the Apple Army are going to make this model a success for them.
I personally find the explanation interesting, but it doesn't justify how Apple can give Safari, iTunes etc for free to "older" OS's, but have to charge for FaceTime.
Agree. Why didn't they charge $0.99 for the Remote app?
I know a lot of users argue that it's only $0.99 charge and not expensive. But think about everyone paying $0.99 for this app? imagine all the money the greedy people at Apple are making only because of "accounting" reasons. This is BS and only encourages people from getting the pirated version instead.
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Software has set of guidelines in relation to revenue recognition that are unique and not exactly cut and dry. This is derived from those guidelines and rules.
Those apps already existed and were touted as features on those older macs.
Facetime was not a component of the sale essentially, meaning it could be argued it is a "significant" feature and would require restatement of the revenue associated with those macs.
It's not "accountability" it's accounting. The rules are set by someone OTHER than Apple, they are just following them. The amount that they make from these sales may be the equivalent of $0.01 on their income statement.
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Two thoughts
1) probably wrong - these were never "sold" and therefore there was never any revenue recognized to begin with.
2) probably right - Apple recognized the corresponding portion of OSX licensing revenue differently for these products than others, not bringing this issue up.
I would characterize it a bit differently. Apple did choose to use this method of revenue recognition. However - given the choice - you are 100% correct. Once you make the choice for a particular revenue stream there's really no going back.
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Would be interesting to see if this update un-locks the FaceTime camera's full resolution on recent MacBooks and iMacs. Rumor was that recent cameras actually had the ability for 1.3MP video, but were scaled down to 640x480 (VGA quality).
If this is true, I wonder if this app installed on a prev-gen MacBook or current iMac / Apple Display will update the quality of the video. But if that is the case, I wonder if that updated quality would be effected in Photo Booth or iChat. I suppose it would not. Just my crazy theory.
If this is true, I wonder if this app installed on a prev-gen MacBook or current iMac / Apple Display will update the quality of the video. But if that is the case, I wonder if that updated quality would be effected in Photo Booth or iChat. I suppose it would not. Just my crazy theory.
You're correct, I should have added that they do have an initial choice, but once it's done they can't switch back and forth without regard.
Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_2_1 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8C148 Safari/6533.18.5)
My gut says that apple is doing this so people buy something on the mac app store. The theory is that once they see how easy it is (and have an account set up linked to their credit card) they will be more likely to buy other apps in the future.
My gut says that apple is doing this so people buy something on the mac app store. The theory is that once they see how easy it is (and have an account set up linked to their credit card) they will be more likely to buy other apps in the future.
I apologize if my answer came across as patronizing. I did not mean it that way. I was completely serious. You never hear about other companies dealing with these rules because it's not a big deal. I do not know how Microsoft accounts for Windows.
Maybe that's a secondary benefit, but it is not the reason.
Do you know how much revenue Apple pulls in a quarter? The sales of facetime will amount to basically a ****stain on their income statement and won't even be worthy of disclosure.
Wasn't Steve Jobs referring specifically to the iPhone at that time? How they moved the iPhone from subscription model to recognizing the revenue over 2 years?
Just to play Devils Advocate...
... its widely rumored that MobileMe is going to be re-launched and available for free. Wouldn't this fall into the same accountancy issue?
Effectively, it's something that you can *currently* pay extra for (so it shouldn't have anything to do with the recognized OSX licensing revenue), but, making it free and available to all OSX users... surely the same rule should apple?
I mean, I'd even argue that a free mobileme service offers an even greater functionality than FaceTime.
Why don't you do all that for them as a birthday or xmas gift?
My parents also rely on me for their computer upkeep, so I know what you mean, BUT think about this for a sec...have your parents spent over $100 for Office yet? Mine did. How did you convince yours? Since they can simply write a letter with a pen and a piece of paper for free and mail it for under $0.50...my point is, if your family uses Facetime over another app, like Skype, it will be worth it for them - $0.99 is still a small price to pay for them to see and talk to their grandchildren over and over in real time
Not an accounting issue, operating issue
This doesnt make since. Im a CPA and am very familiar with the accounting rules regarding software (capitalize expenditures Vs. expensing) aka SOP 98-1. The guidance focuses on the nature of the software. I.e. is it intended for sell to third-parties or to support the business internally and would not be sold? Generally, if the software is intended to be sold to third-parties then you have to expense the cost to develop it. If it is going to be used to support the business internally only, you may be able to capitalize some costs. This is cut and dry, it is obvious this software is indented for third-party use and not internal only and therefore the costs must be expense. So, the decision to charge is a revenue/operating issue and not accounting issue.
This doesnt make since. Im a CPA and am very familiar with the accounting rules regarding software (capitalize expenditures Vs. expensing) aka SOP 98-1. The guidance focuses on the nature of the software. I.e. is it intended for sell to third-parties or to support the business internally and would not be sold? Generally, if the software is intended to be sold to third-parties then you have to expense the cost to develop it. If it is going to be used to support the business internally only, you may be able to capitalize some costs. This is cut and dry, it is obvious this software is indented for third-party use and not internal only and therefore the costs must be expense. So, the decision to charge is a revenue/operating issue and not accounting issue.