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Future Apple's iPad OS Upgrade Pricing Policies Revealed as Apple Seeds GM iPad SDK, Firmware and Licensing Agreement
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spyz88
macrumors regular
Everyone is ignoring these posts about the accounting practices being changed. I don't see why. I personally think they are just telling you all the software updates will work until OS5, where after that they cannot guarantee full functionality (such as GPS on the iPhone 3G)
I disagree with you, luckily Apple disagree with you on some of it as well.
Majority of software companies do offer time based free upgrades, or major discount. Even Microsoft has done this with Windows 7 and are now doing it with Office 2010.
If iPad/iPod Touch users buy a new device, they should be allowed to get a free major upgrade for the next six month or a year. Luckily, Apple is offering one major free upgrade for all iPad owners. This is the smartest decision Apple has done. They will not see any drop in sales if Apple announce a new OS and plan it for release in six month, people will continue to just buy and know they're getting a new OS for free. Apple would now not be restricted to a yearly or any kind of release schedule.
I suspect Apple will update the same upgrade policy for the rest of the mobile devices, including iPhone.
ipedro
macrumors 604
iPod + iPad: Paid Updates -vs- AppleTV: Free Updates
I understand the accounting principal where they have to charge for major updates but why does this not apply to AppleTV?
iPhone's updates are free because its users pay a regular fee that Apple gets a cut from but AppleTV users get free major updates and arguably fall in the iPod/iPad category of not paying Apple for that update.
I understand the accounting principal where they have to charge for major updates but why does this not apply to AppleTV?
iPhone's updates are free because its users pay a regular fee that Apple gets a cut from but AppleTV users get free major updates and arguably fall in the iPod/iPad category of not paying Apple for that update.
matticus008
macrumors 68040
You don't understand, then.
Users paying a "regular fee" has nothing to do with why iPhone updates are free. Subscription accounting has absolutely nothing to do with the customer. The principle in play has to do with "deliverables" (in this case, the products) and accounting for costs subsequent to the completed sale. You're confusing two completely separate concepts.
Both the iPhone and the AppleTV recognize revenue on a deferred periodic basis (hence subscription), thus allowing significant functional changes. Apple, together with several other companies, arranged for a modification to the subscription accounting rules so that they would no longer have to defer the revenue recognition, and could set aside a portion of the price for subscription accounting, essentially creating a hybrid of immediate and deferred revenue recognition.
The iPod touch was sold flat-out with immediate recognition before the new rules took effect, because there are significant downsides to deferred recognition. However, the iPad can take advantage of the new hybrid rules that Apple pushed through FASB, so it need not charge for major updates. OS 4.0 will be free. OS 5.0 might be free; it might not.
At some point, they have to bring in additional money to fund the software development, and that's where any charges above the first dollar or two go. 99 cents is a token charge for the rules. The $9 after that is to pay for the work.
EDIT: Incidentally, first generation iPhones are now fully accounted and were all sold before the new accounting rules took effect; this means that OS 4.0 will probably not be free for 2G owners (if it runs at all).
