“Since my post yesterday about the $20 iPod touch software update several readers have contacted me to explain how Apple had to charge for this update because of generally accepted accounting principles (GAAP). This issue, so I’m told, is much the same as the way Apple had to charge $1.99 the 802.11n enabler for the Intel-based MacBooks and MacBook Pros. Personally, I don’t buy this,” Adrian Kingsley-Hughes writes for ZDNet.
“According to experts it is important to note that there’s nothing in the GAAP requirements that forces Apple to charge its customers for a software upgrade. The only requirement imposed by GAAP is that Apple must account for the separate value that the software brings,” Kingsley-Hughes writes.
Here are the new apps that have been added to the iPod touch:
• Mail
• Stocks
• Maps
• Weather
• Notes
Kingsley-Hughes writes, “To try to justify that any of this offers a $20 value is hard, especially when you consider the overall value that MacBooks and MacBook Pro customers got from the 802.11n switch on. Over the life of a MacBook that has to represent more than $1.99 worth of value if I’m paying $20 for a few apps, does it not?”
Kingsley-Hughes writes, “And finally, can someone please tell me what the difference is between the iPod touch upgrade which costs money and the Apple TV upgrade with is free and transforms an existing Apple TV device into what PC World is calling a substantially different product?”
More in the full article here.
One could say that those who purchased iPod touch knew what the device did and thought the price was right for what they were getting. If iPod touch users want to add more functionality for $19.99, then can. If they don’t, they don’t.
However, with Apple TV getting a massive upgrade for free and iPhone also getting significantly upgraded for no charge, it’s almost impossible to explain to consumers why Apple’s charging for one, but not the others. (We say “almost impossible to explain” because iPhone and Apple TV are amortized over 24-months, iPod touch is not; therein lies the rub) The better question: Is the update worth $19.99?
For consistency’s sake at the very least, Apple should either charge for all upgrades of this type or for none or do a better job of explaining upfront that, unlike iPods and other products, iPhone and Apple TV are special cases that are subject to free upgrades over a certain period.
[UPDATE: 11:58am EST: Fixed incorrect link code that was affecting display of the full MDN Take.]
oh, just pay it already.
bitch and moan, bitch and moan.
that is all people
I didn’t like paying.. but.. man oh man.. is this worthwhile.. It was well worth the 20 bucks, imho.
It transformed my ipod into a pda.. Just being able to read, send, and store email is a big plus.. especially when I can now read .xls, .doc, and pdf documents on my iPod. Not to mention that the google maps application is freakin awsome!
Call me a fanboy.. but if you have an iPod touch and don’t do this.. your a fool.
He’s right. I’m an Apple Fan… but this was lame.
“Personally, I don’t buy this,” Adrian Kingsley-Hughes writes for ZDNet.”
Personally, I don’t care that you don’t buy this, you cheap bastard.
Too many hit whores oozing from stained house trailer carpet.
I think Apple should give away all of its software for free…from here to infinity….those greedy bastards.
If you do not want the extra Apps … then do not buy them … you bought the iTouch without them .. Apple is giving you something more for a few more bucks!! If everything were free the stock would reflect it ..
How about you pay it for me and I won’t bitch and moan…
good god, you pay over 40% of your income to taxes (state, fed, sales, property, fica, ect ect ect combined)
you don’t complain about that.
Really, I think it should be $1.99 per app. And you can pick which ones you want.
What makes no sense is that they are giving it for free on new iPod Touch models.
There must be something to do with licensing for the Maps, Stocks, and Weather apps… That costs Apple something. Because all sorts of software upgrades on the iPhone have cost zero/zilch/nada
“And finally, can someone please tell me what the difference is between the iPod touch upgrade which costs money and the Apple TV upgrade with is free and transforms an existing Apple TV device into what PC World is calling a substantially different product?”
Because the they are accounting differently for the iphone and the apple tv than they did for the ipod touch.
from CFO Peter Oppenheimer:
“The executive said that it will report revenues attributed to both devices on a subscription-like basis, rather than count only the one-time costs associated with each device as they occur.
Both the phone and media hub will receive a relatively steady amount of software features for free over their respective lifespans, meaning that the income from each sale in effect amortizes the software development costs after the product is released.”
Twenty bucks to add programs I didn’t think would ever be available on my device. Took two seconds to approve that purchase.
For those that complain, why are you ok with a $79 price tag for iLife when buying a new Mac gets you that stuff free?
It’s the same thing.
it is greed in my opinion.
also making users who want these apps but iTunes store is not available in their country angry. no way to get the upgrade withou itunes store.
Complaining over $20 is silly, but if it now comes on any new iPod touch now for free, I can understand some grumbling. If Apple continued to make it a $20 updgrade, in a way that would actually be better. It would be like buying additional software.
Clearly there are aspects of the optional new software that Apple did not author and must pay a license fee to distribute. The terms of the license must already cover new shipping iPod Touch’s but require the fee for retro upgrades.
Maybe I’d be more sympathetic if they charged me $20 for my iPhone update. I don’t know. That being said, the improvements made to the iPod are far more substantial than the improvements made to my iPhone. Is it worth $20? Yeah, probably. It’s $4 an app, which is peanuts, really.
From the start the Apple TV and iPhone were going to be accounted for over 2 year periods with for the very reason that they were going to develop the product and add extra features. An iPod has always been a fixed product, you buy a particular model based on its specs and which one best suits you. The iPod Touch came with fewer apps than the iPhone to begin with, apps that could have been included but weren’t. There should have been no expectation that there would be updates or that if there were they should be free.
Once the iPhone has been out for a couple of years and we get subsequent versions I doubt they’ll continue the practise. We’ll likely just get new OS versions like with Macs – for a cost.
I’m not saying its worth $20 but that’s a different issue.
There should be continuity, it really is nonsensical why the Touch users get boned and the iPhone users enjoy a free roll.
I think it’s principally because anything relating to the iPhone would garner massive media coverage, presumably vilifying Apple since mainstream media is so eager to exploit any iPhone hype. While the Touch demands far less media scrutiny outside of fanboy worlds such as ours.
People are forgetting that this upgrade utilizes SkyHook technology for the maps function. I’m sure that Apple had to pay SkyHook a licensing fee and that the $20 is related to that.
The iPhone doesn’t require the SkyHook technology for Google Maps, so the upgrade didn’t cost Apple anything.
This is probably the only really valid complaint of all the incessant whining we’ve been hearing.
The same whiners will buy beer and pay a pemium for pizza and delivery that ingredientwise, costs about $3 to make on Super Bowl Sunday. Not only will they spend $30 to $40 bucks minimum for a one night game, they will tip the delivery guy at least $5.
A $20 UPGRADE IS NOTHING!!! Bunch ‘o’Whiners
If the ZDNet dude doesn’t think these apps are worth 20 bucks, then he shouldn’t buy them. That’s pretty simple. What’s his point? If they’re that worthless to him, why does he even write about them? He apparently won’t be using them anyway.
I will say, however, that I think Apple made a mistake originally when they gimped the iPod touch by omitting these apps. I’m glad they fixed the mistake for future buyers.
If the author did their homework or actually contacted an accountant, they would learn that providing major new funcionality that did not exist (or promised) when the product was sold would require an expense on Apple’s P&L;. AppleTV is accounted for like iPhone (subscription) and future funcionality was implied.
Why should a software company give away its main product for free? Remember, this is major new funcionality and not just an upgrade of existing features. If classic commerce is becoming greed, then I think you fools need to look in the mirror for the problem.
____________
Sent from my iPhone (with Mail, Google Maps, etc. included and already paid for)
Here is my take on it.
There is a fine line between free upgrades and charging for it.
People that purchased iPhones have to commit to spending money on the device for the next 24 months. Also, apple is treating the iPhone like it would a computer. Some upgrades are going to be free. The ability to SMS multiple people is not a “new feature” it was something they probably thought wouldn’t be a big deal. However, it turned out to be some of the most commonly regarded disappointments about the iPhone (and trust me, there are not many disappointments, it’s a sweet device).
The multiple SMS was a fix. Remember, they are going to Firmware 1.1.3, not 2.0. If they were going to 2.0 with a ton of new apps and features, then they would probably charge for it.
On the iPod touch, just like every other iPod, you get what you pay for. Once you see it, you like it, then you buy it. You don’t expect new features to be added to it for free. The iPod touch wasn’t designed to be an email client or a mapping companion. It was designed to play music. They only stuck Safari on it so that when you are on public WiFi, you can accept the web page that makes you agree to the terms. That way you can get on WiFi iTunes at places like starbucks and such.
Now they are saying, “Hey, if you want to add more functionality to your iPod touch and turn it more into a PDA type device, then for $20 you can do it”. They included it in the new iPod touches because honestly, who would want to buy it without it. For all that matters, they could add $20 to the price and add them and people would still buy them.
I don’t think GAAP has anything to do with it.
As for the AppleTV, Steve basically in laments-terms said “the first one was a failure, so we are going to recall them all and replace them with a new one.”
You don’t see Tivo, or MovieBeam, or any of those other guys recalling their devices or offering a new device in it’s place. Apple just did something that really hasn’t been done before and it won’t cost them really any money to do, but the customer service side is going to be spectacular.
I think they way it was handled was perfect. Good job Apple.
$20 for an iPod touch software upgrade?
And the flogging will continue until the moral improves.
“If I were running Apple, I would milk the Macintosh for all it’s worth — and get busy (milking?) on the next great thing… – Steve Jobs