The $20 iPod touch upgrade: really for legal reasons or no?
By Nilay Patel 
posted January 21st 2008 2:40PM
posted January 21st 2008 2:40PM
So the rising discontent with Apple's new habit of selective feature enabling got us thinking -- while we're not experts on the subject, the generally accepted reasoning for the $20 iPod touch upgrade fee is the accounting requirements of the Sarbanes-Oxley Act: iPhone and Apple TV updates are free since revenue from those products is realized as a subscription over a period of time, but iPod touch updates can't be free since Apple just records that revenue directly. That certainly makes sense to us when applied to things like the 802.11n Enabler, which was trivially cheap and turned on unadvertised hardware features, but it strikes us as being a pretty big stretch when applied to a $20 package of new software applications. iPod name or no, the iPod touch is essentially a little computer, and the whole purpose of software is to enable "significant unadvertised new features" on a computer. For Apple (or anyone) to say that a mail app is a "significant new feature" for a computer is pushing the line just a bit far, and it makes us wonder how the company accounts for new versions of iTunes, QuickTime, and Safari, each of which add new features to already-sold Macs -- and how things are going to play out when the iPhone / iPod touch SDK is released next month. We've got a call into Apple to get to the bottom of it all, we'll let you know what (if anything) we find out.Disclaimer: Although this post was written by an attorney, it is not meant as legal advice or analysis and should not be taken as such.
Apple is getting pretty greedy... interesting to see how this plays out.
What a load of bull. I have an Apple TV and I'm not paying anyone a subscription for it. If they can give me a software update for that then they can do the same for my iPod Touch.
I paid the £12.50 for the iPod Touch upgrade - I wanted the email client. But there's no two ways about it - this is gouging.
i think overall this upgrade is useless. Apple is just wanting to earn extra money because their profit is not as high as they though. And so they just do these little fees to you can get better fatures that the ipod already has the only problem is that thiey havent enabled them. this is a strategy that alot of companys do but apple is just doing this and taking it to the next level!.
like at the first previews of the ipod touch showed a icon witch was blutooth! and for a moment they probably has a bluetooth chip inside but disabled them, and intil then some time later after this apple saw this leak they photoshoped the foto and too it off. And also if you look in how much each part of the ipod is realy worth from the manufacture then you will see that it is way less that the actual cost.
and also for those who think that this is reasonable this can wast their money. becasue this upgrade existed since the iphone came out . all the same apps that work on the iphne are the same that work on ipod touch. and if it was so colled becasue of the new "Skyhook" servises then why dont apple just charged 10 dollars ans split the bil with the iphone users becasue they use the same thing!!
also!! apple when they give something to the people they limit is in order to make a biger profit. and just a wile ago the introduction of the movie rentals. and also apple alows you to synk with your ipod but not am3 or stuff like that.
here is a Q for all you !!!
Q: if apple wasnt about the money then why are they so big!. why are they in all the major bizness like they have become in the os software sellers, computer sellers, music player sellers, music sellers, movie sellers, movie rental sellers, phone seller know!, and they have a large comunity of developers that pay apple around 1,000$ - 4,000$ just so make stuff applications for them!!
A: they are a huge industry and almost a monopoly!! (if people know what they are).
and ima clear up some talks from some posters, apple never lowerded the price on the ipod touch to that that the new 20$ upgrade comes within the price. Also microsoft own mijority part of the OS industry becasue they mostly sell OS. if apple is trying to battle the third party software lake "jailbroken ipods" their doing it the wrong way becasue it will just encurage people to jail break it (buy the way if you do this method you can add iphone apps to your ipod and much more for free!!). and why pay for patches since patches are basicly the errors that they are trying to cover.
Also, if you are waiting for a update or a upgrade you are mostly wainting for as long as apple whats you to wait becasue if you havent noticed.. apple always want to be some steps ahaid of itself!!. and right know they are working into next years technology and will be soposively "new when apple anoces it"
If all of you who just would just pay they you are the people that the company want to take advantage of. but if you demand a explanation then they will have to be honest.
bottom line!.. apple is into money!! and they would do almost anything (exept breaking laws) to get biger. and since they have all that left over money for some stuff you can get free upgrade for your MACs or something.
Oh my god, with the introduction of iPod touch SDK next month it's going to become a PDA!
welcome to reality people. government regulations cost businesses and thusly, the consumer money. this type of charge is ultimately what happens at the end of the day. usually we don't see the costs firsthand as they are built in but credit to apple for exposing the true costs and problems with the SOX act. blame apple all you want, but all SOX has done is keep businesses private as they don't want to pay for compliance.
I just don't buy Apple products, and stuff like this is giving me more reason not to in the future. Clearly they are trying to make more money off (imho) an already overpriced gadget. And good for them, if people pay it, however it just shows their true colours. That they care more for their profit, than they do about the end-user.
They're quickly becoming one of the richest computer companies in the world, and shouldn't be penny pinching over $20/device. Atleast have better headphones as part of the updated features list.
Asking again, in hopes there may be some info on this:
Could there be some sort of usage or license fee paid to Skyhook per unit for the Wi-Fi Google Maps location service? If so, could the subscription accounting model for iPhone allow this to be expensed against the future recognition for iPhone, and against the immediately recognized revenue of iPod Touches sold from this point on, but for previously (already) recognized iPod Touches, be passed on to the consumer so Apple can expense against the upgrade charge?
Pure speculation, and even if there is anything to it, no doubt the debate will rage over whether or not Apple could/should eat it as a gift to early adapters, or how (much) they chose to charge either way…
We really do not have all the facts here.
We think we do but we don't;many of us have bought many products that have received free updates, some of them quite significant; we think that means it is unreasonable for Apple to charge for the updates to Ipod Touch.
We all appreciate consistency, when things are not, we ask for answers, or we come up with our own.
We really do not have all the facts here.
Notwithstanding there are a few points worth making.
The ipod touch is more like the regular ipods than it is like the Iphone.
Despite hardware similarities( some would say commonalities) between the Iphone and Ipod Touch, it really is an Ipod. The revenue from Ipod Touch would be treated like any other Ipod. As has been discussed by Mike Kwong and others Generally Accepted Accounting Practices(GAAP) and Sarbanes Oxley (SOX) have some impact on how companies can account for revenue from items that are sold. If the rules are not followed, it may require restatements to fix.
The point here is that the consequences of choosing to book the revenue from the sale of the ipod Touch at current or over 24 months( as a subscription) plays out over a significant portion of Apples business (ipods) and restatements could have implications for stock price, and volume counts and God only knows what else.
If Apple were to give away the software, one of the consequences would be that any upgrades to Nano, Shuffle or Classic lines of bussiness would have to be treated in the same way. I think Apple wants to leave itself the option of charging for future updates when they add significant features. Its not a crime, its not an attempt to gouge users, its a fact of life.
I suppose the alternative, is to call the new Ipod Touches v1.5 and not make the upgrades available to any older versions. I know it makes the $20.00 upgrade seem like a small price to pay.
The Ipod Touch is worth having without the updates, its worth somewhat more with the updates.
Steve Jobs seems to not as smart as he used to be... First, it was the $200 price reduction on iPhone, which made a lot of early iPhone users angry, he was forced to give $100 credit. Now, it's the $20 upgrade fee on iPod Touch and the new Macbook retard called Macbook Air.
Waiting for something to happen in this topic. Would like to advice everyone not to buy the $20 package for a while, since I believe that Apple will have to make it free soon anyways.
Didn't work for the 802.11n enabler!
just 'cause you're a lawyer doen't mean you are logical...
- they are adding new products (Applications) to the iPod touch... each of those apps is a product not a feature f the OS.
- if they were simply upgrading the OS or the existing apps then there would be no extra charge as in all the examples you state.. i.e. the new features were directly to existing Apps but in this case the "new features" are not new features they are actually entirely new Apps, new products.
- for example i don't get the new iMovie with a software update (excluding secrurity updates) i either have to buy the new iLife suite or buy a new version of the OS with the new software included but either way involves money..
- if you are saying that ipod touch is a computer (and i agree) and that using the computer as model of how Apple should be charging or not charging for new software then apple is following that model exactly in that case so i'm not sure what the problem is? they are doing exactly as you say... it's you who want them to treat this thing not as they do with computers
Sarbanes-Oxley or not, the Touch is a less expensive device than the iPhone. Just because the more expensive model has extra software does not mean anybody is ENTITLED to to the software (even if Apple included it on newer models). Companies add features and/or drop prices to spur sales all the time. There is nothing extraordinary here.
Geez people. $20. If you can't afford it, don't pay it. If you can, do.
I don't care if it's because of Sarbanes-Oxley or not. If I had bought an ipod touch you BET I would pay $20 to get the new software. I don't particularly care if all new packages come w/it free.
Where is it written that every improvement must be free? Geez! Get over yourselves (writing not as a an apple fanboy but i would defend this for any software developer). Anyone who is too cheap to pay $20 for software don't buy it.
IMO Apple simply had a pretty decent opportunity to retain at least some users from the jailbreak crowd on the iPod Touch (at least if they even care about hacked iPod's) Since jailbreaking my Touch I have not really used anything but 3rd party mail apps and stumbler. I was ready to upgrade my firmware until I heard about the $20
well yeah for you... this is stupid.. so if i bought OS X 10.0 i should be able to automatically get the latest version of iMovie then? that's your logic? this is new software this isn't part of an OS upgrade... if you want the new software pay for it, if you don't then don't, it's that easy. this is a hand held computer and this is exactly how things work with desktop and laptop software so i'm not really understanding what the hell the big deal is... and it's $20!!! you people really need to get a life.
Why is everyone surprised? I order computer equipment for a living, both Mac and PC. It's obvious that while Apple will have OSX 10.0 and then a completely "new" OSX 10.2, "M$" the money hungry evil corporation that it is will offer XP SP2 (for free) Every upgrade Apple makes turns into a "new" product, it's annoying. They overcharge to begin with and they just keep asking for more....thank god for all the fanboys who like pretty over functional.
All this accounting stuff still doesn't explain why you have to pay $20 for lyrics, web clips, and icon arrangement. Those are updates to apps already on the Touch. Charging for the apps is annoying but not totally unreasonable. Charging for the minor version update to existing apps is.
That´s exactly the point! I agree with you. I hope Apple will answer finally and explain...i will not pay for software upgrades..that´s not ok...apple tv get´s redesigned new software and we don´t even get the already existing apps from the iphone! Incrdible...Europe is watching...
I don't think it has anything to do with accounting or SOX. It's all about marketing. If they want to keep the Ipod Touch competitive and get people to buy it, they need to offer the software for free. It makes it more desirable.
For the rest of us, well we already own the Ipod Touch - so they don't care. They might as well make money off of our dumb asses.
One word: boo!
Crippling the Touch for no other reason then to differentiate between the iPhone and then letting people pay extra for it afterwards.
For shame, Apple!