iPod touch Down with Apple's Touch "Upgrade" Fees

[dejo]

Damn. The argument that "iPhone and TV are both subscription, thus amortized, thus not required by S-O" doesn't fly. Deciding to rent movies or not isn't the same as having a 2-year iPhone contract. The Apple TV case blows holes in Apple's Touch argument.

It has nothing to do with how the users' subscribe to a service and everything to do with how Apple accounts for their revenue from the sale of the product.

 

[DVNIEL]

That's reasonable. Except:

-Anyone who buys a Touch gets a progressively inferior device in a matter of months or less, not years....

Uhhh... I bought a Santa Rosa MacBook Pro In September, and then they release the new Penryn MacBook Pro's in February, thats not years... but I'm still happy with what I have.

Your logic has no substance, why should you be entitled to free updates just because iPhone users get it for free? iPhone users are a source of continuing revenue to Apple, iPod Touch users are NOT besides hardware sales.

 

[mojohanna]

FALSE

There is nothing in SOX requiring this. Don't believe me? I suggest you read the Act. NOTHING in it requires these fees. It is just greed, plain and simple. SOX only deals with reporting requirements, and nothing within SOX creates a requirement to charge for software updates. The fact that Apple is saying this is a lie and false advertising. What's worse is that their loyal consumer base believes them without understanding the actual SOX Act and law.

I b*tched more about it here: https://forums.macrumors.com/threads/449010/

FALSE as well. It does have to do with SOX, but in an indirect way. When Apple released the iPhone it chose to account for the income over 2 years. They did this to allow for updates etc. The same holds true for the Apple TV. However, the Touch revenue does not get accounted for in the same way. It is immediately added to the ledger.
I would agree that Apple could, if it really wanted to, provide the updates free of charge. However, we would need someone with more legal expertise in this area to confirm this.

What is next? Are you going to complain that there are apps for the touch at the App Store that cost money too?

This is no different than buying a computer with Tiger on it and then paying a few months later $129 to upgrade to Leopard. No one is crying and whining "APPLE IS GREEDY" when this happens. How is the situation with the Touch any different? To put it bluntly, its NOT.

Stop comparing the touch to the iphone. They are two differnt platforms that have completely differnet audiences, revenue streams and accounting practices.

 

[Quasiportnoy]

Steve said that the Touch and iPhone are "accounted for differently."

This is because for every iPlan out there, Apple receives $10 monthly, so $240 in addition to the cost of the iPhone itself. This helps finance the development of everything, but I think they want to split that cost between Touch users and iPhone users.

$20-$30 instead of $240 is a deal I'll take any day.

(I think the January apps were probably priced high to help bear the brunt of the SDK update, splitting the cost evenly between the two...hopefully.)

 

[IJ Reilly]

Buy it or don't. Either way, deal with it. Please.

 

[Adokimus]

FALSE as well. It does have to do with SOX, but in an indirect way. When Apple released the iPhone it chose to account for the income over 2 years. They did this to allow for updates etc. The same holds true for the Apple TV. However, the Touch revenue does not get accounted for in the same way. It is immediately added to the ledger.
I would agree that Apple could, if it really wanted to, provide the updates free of charge. However, we would need someone with more legal expertise in this area to confirm this.

What is next? Are you going to complain that there are apps for the touch at the App Store that cost money too?

This is no different than buying a computer with Tiger on it and then paying a few months later $129 to upgrade to Leopard. No one is crying and whining "APPLE IS GREEDY" when this happens. How is the situation with the Touch any different? To put it bluntly, its NOT.

Stop comparing the touch to the iphone. They are two differnt platforms that have completely differnet audiences, revenue streams and accounting practices.

No, not false. Yes, the reasoning that Apple proclaims to be using is indirectly associated with SOX. But, what I said was true. There is nothing in SOX requiring them to charge us for this. Need someone with more legal expertise in this area to confirm this? Well, I just finished my last set of finals for law school (so, Juris Doctor) and I have a masters in accounting. Trust me, we studied SOX in both fields. Again, what I said was not false in any way.

 

[IJ Reilly]

No, not false. Yes, the reasoning that Apple proclaims to be using is indirectly associated with SOX. But, what I said was true. There is nothing in SOX requiring them to charge us for this. Need someone with more legal expertise in this area to confirm this? Well, I just finished my last set of finals for law school (so, Juris Doctor) and I have a masters in accounting. Trust me, we studied SOX in both fields. Again, what I said was not false in any way.

"Required?" Maybe not. But a lot of things are done which are not strictly "required" in order to avoid the appearance of doing something improper, especially where the rules are unclear or ambiguous. You seem to forget that Apple recently had the SEC all over them like a cheap suit. Perhaps they'd prefer not to give them any excuse to come snooping around again.

 

[surferfromuk]

A few thousand coders all working their butts off night and day for 12 months and you don't think 'you should pay' ?

Beyond belief!

You haven't even given a good reason other than 'your angry'...

It's just the worst kind of terrible spoilt 'brat' posting I've ever seen - really, go and stamp your feet outside and Apple store and thump the pavement - maybe someone will throw you a few bucks to put you out of your pain...

 

[HollacoptaPilot]

ok enough crying about having to pay. For me waiting is waaaay worse than paying. I've been coming to this board for months now and all I've heard is that we will be able to get apps at the end of February and then it was March 6th. Well today is March 6th and I don't see any apps. I would pay 50 bucks per app if I could get them today. Do we really have to wait till the end of June for apps????? This is retarded. I'm sick of seeing my coworker with his jailbroken touch playing super nintendo games while I sit and wait like a chump.

 

[Jack Flash]

A few thousand coders all working their butts off night and day for 12 months and you don't think 'you should pay' ?

Beyond belief!

You haven't even given a good reason other than 'your angry'...

It's just the worst kind of terrible spoilt 'brat' posting I've ever seen - really, go and stamp your feet outside and Apple store and thump the pavement - maybe someone will throw you a few bucks to put you out of your pain...

Oh, get off your high horse.

If you think you should have to pay Apple for the ability to buy their programs then you need to get off your knees.

And honestly, if Apple is going on about how easy it is for developers to use their SDK (5 days to a full application having never used it before) then I sincerely doubt thousands of coders have been slaving over these products night and day.

 

[phytonix]

if it over $5, Apple is pathetic.

 

[Tuta]

Why are we penalized for realizing that the worst part of the iPhone is the phone?

Boooo.

 

[aethelbert]

Oh please... Why do people think that just because something exists that they deserve it for free? Buy it or don't, nobody here really cares what you don't complain.

When new editions of, say iLife, come out, are you pissed that you can't get the new one for free? You bought your device without this update. So you should be happy with it (if not, why did you buy it?). Now you can get more for a small (yeah, $20 is small compared to the $3-500 that you paid for the iPod). Apple gets income from iPhone plans for these projects. So in essense, iPhone users pay, too. Do you think that iPhone users should pay for your updates? No. If you want it, you've got to pay too. If you don't like that, TOO BAD. That's how businesses work.

 

[ebel3003]

Personally, I think that 2.0 *might* be free. If you think about it, whether Apple charges or not, they get paid either way. Apple is charging developers to publish their applications. Unless I'm misinterpreting their website, $99 dollars is required for independent developers to publish their applications on the "App Store", and $299 for enterprise level developers. In addition, they make 30% of whatever the developer charges for their applications.

With this in mind, I personally think that a free upgrade to 2.0 isn't out of reach. On the other hand, I don't underestimate that Apple will take the opportunity to charge users.

On another note, I personally think that charging for the "January Software Upgrade" was testing grounds to see how the touch community responds to charging for software upgrades.

 

[Jack Flash]

Oh please... Why do people think that just because something exists that they deserve it for free? Buy it or don't, nobody here really cares what you don't complain.

When new editions of, say iLife, come out, are you pissed that you can't get the new one for free? You bought your device without this update. So you should be happy with it (if not, why did you buy it?). Now you can get more for a small (yeah, $20 is small compared to the $3-500 that you paid for the iPod). Apple gets income from iPhone plans for these projects. So in essense, iPhone users pay, too. Do you think that iPhone users should pay for your updates? No. If you want it, you've got to pay too. If you don't like that, TOO BAD. That's how businesses work.

God save them if they charge $20 for 802.11x support.

 

[Mitch1984]

You have World Com & Enron to blame, not Apple, read up on Sarbane Oxley and find out why Apple charge for software updates for the touch, they get away with it fir the iPhone because they recognise revenue over 24 months or something.

Also why should apple waste months of time creating a SDK that doesn't make the iPhone crash, is more resistant to hackers (because apple can pull down malicous apps) and then not charge for doing so.

 

[Jack Flash]

You have World Com & Enron to blame, not Apple, read up on Sarbane Oxley and find out why Apple charge for software updates for the touch, they get away with it fir the iPhone because they recognise revenue over 24 months or something.

Also why should apple waste months of time creating a SDK that doesn't make the iPhone crash, is more resistant to hackers (because apple can pull down malicous apps) and then not charge for doing so.

But they don't have to charge. S&O doesn't mandate that.

 

[Diwata]

FALSE

There is nothing in SOX requiring this. Don't believe me? I suggest you read the Act. NOTHING in it requires these fees. It is just greed, plain and simple. SOX only deals with reporting requirements, and nothing within SOX creates a requirement to charge for software updates. The fact that Apple is saying this is a lie and false advertising. What's worse is that their loyal consumer base believes them without understanding the actual SOX Act and law.

I b*tched more about it here: https://forums.macrumors.com/threads/449010/

It's time that Apple realizes this, that it CANNOT deceive its loyal customers forever. It will eventually caught up with the Co. & they will be sorry for it.

Come on Apple be fair to your customers!!!! Where is justice in charging the iPod touch users vis a vis iPhone users??? The Jan apps update should be downloaded free of charge NOW!

 

[aethelbert]

It's time that Apple realizes this, that it CANNOT deceive its loyal customers forever. It will eventually caught up with the Co. & they will be sorry for it.

Come on Apple be fair to your customers!!!! Where is justice in charging the iPod touch users vis a vis iPhone users??? The Jan apps update should be downloaded free of charge NOW!

Oh please. For the millionth time in this thread, Apple makes money off of the iPhone's cellular plans. Users pay extra to get to use the iPhone. So you can pay extra to get to use what the iPhone has.

Take for instance Aperture, which was upgraded to v2 a few weeks back. Apple had a pay-upgrade so that I didn't have to buy the whole thing again. They had to develop the software, so they had to get paid. Releasing new software isn't easy to do, and it is certainly costly. If you want every possible piece of software for free that you can get for your device, go use Linux.

 

[Jack Flash]

Oh please. For the millionth time in this thread, Apple makes money off of the iPhone's cellular plans. Users pay extra to get to use the iPhone. So you can pay extra to get to use what the iPhone has.

But Apple isn't required to charge because of SoX. They need to be up front about it.

 

[aethelbert]

But Apple isn't required to charge because of SoX. They need to be up front about it.

It doesn't matter what they're required to do. Software development costs money, and they deserve to be paid for writing that software.

 

[Jack Flash]

It doesn't matter what they're required to do. Software development costs money, and they deserve to be paid for writing that software.

Sure, but accounting is being used as a scapegoat.

 

[aristobrat]

I'm sympathetic, but would like to see a quotation from S-O or some outside analysis to back this up.

OK, here's a quote from an outside analyst.

“It’s an accounting requirement that if you upgrade a device that’s not on a subscription, you have to charge,” Needham and Company financial analyst Charles Wolf said. “Apple has a choice of what to charge, but they have to charge.”

http://www.macworld.com/article/131991/2008/02/ipodtouch.html

and

According to the company’s February 1 quarterly filing with the Securities and Exchange Commission, “For both Apple TV and iPhone, [Apple] 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.”

http://www.macworld.com/article/131991/2008/02/ipodtouch.html

Which all started way back when...

“The nominal distribution fee for the 802.11n software is required in order for Apple to comply with generally accepted accounting principles for revenue recognition, which generally require that we charge for significant feature enhancements, such as 802.11n, when added to previously purchased products,” said Teresa Brewer, Apple’s Mac hardware public relations manager.

http://www.macworld.com/article/54948/2007/01/80211nfee.html

 

[aristobrat]

Sure, but accounting is being used as a scapegoat.

So I've seen one professional quote (from that MacWorld article) that says Apple has to do it for accounting reasons and zero professional quotes that say what they're doing is just to be greedy.

On what are you basing your scapegoat comment? If you've read more than the links I've dug up, please share!!!!

 

[flyfish29]

Don't like it then just by an Insanely Great Zune why don't cha'?


Accounting rules or not, what they charge to some and not others...Apple can do what the hell they want(for the most part) in our free market society.

That being said, if the OP (or anyone else for that matter) disagree then vote with your dollars and don't support the company. I for one wouldn't be happy if I had an iPod touch, but they are the best company out there for technology gear so I will continue to vote for Apple using my dollars.


If I took some of the arguments above and applied them to buying a new car...then I should be down that someone last week bought a Subaru just like mine and they got a deal with the same dealer I purchased from. That dealer gave them (not me) "upgrades" of free maintenance for the first four years of ownership!!! I have to pay $29.99 for that next oil change and they get it for free!!! Damn them!!! Guess that is life though...I teach elementary students and I tell them every day that unfortunately life is not fair no matter how much we wish it was.