If charging for update was to make money than it might be a loss making decision. iPod Touch was released near September, 2007 so who ever bought it in 4 months till December are required to pay for the update.

Most of the people would not care about update, even many iPhone users might not update phone at all even though it is free. Few people would buy and most people left who wants to buy would just wait that might be in February they come up with SDK and another software update and again charge.

I can go to individual email websites like GMail, Yahoo etc. and check email. But then I have 2-3 accounts on GMail, so you have to logout and login etc. Only for email application, so that all emails are at one place and updates automatically I went to buy update, but somehow it gave error that problem in iTunes with some error code and to try after some time.

So now I would wait till SDK release to see if any new update is coming or not. If not than I might buy update just for ease of use.

Now 8 GB model old model is available for $42.00 less than list price on Amazon.com. So all dealers/retailers has to get rid of old models for a discount. So instead of making $20/- iPod eco-system is losing $20/-.

Also now retailers has to promote two iPods. One with update and one without update. Any new users would not buy old model unless it has more than $20/- difference.

For Apple, they might have insider trading to get rid of all old models from factory store etc. and sell to dealers before announcement and then sell new models from website. Or they might be opening old models stock and updating firmware and then selling as new models. But due to this they are causing more concerns for retailers who are selling the product.