AfterDawn: News

iPod owners could get future OS versions free

New accounting rules being considered by the Financial Accounting Standards Board (FASB) would allow Apple to stop charging for major revisions to the iPod Touch's OS. The FASB sets guidelines for Generally Accepted Accounting Practices (GAAP) on behalf of the US Securities and Echange Commission.

The two major OS updates released so far, coinciding with the introduction of the iPhone 3G and iPhone 3GS, have been free for the iPhone but not the iPod Touch. This is a result of how revenue for each is recorded on Apple's books.



Income from iPhone sales is currently spread across a two year period. This is due to a GAAP requirement that revenue from new features must coincide with the time they are delivered.

Because the revenue from iPod Touch sales are recorded all at once they are forced to charge a minimal fee for them. Despite the low price, paying anything for a product that's free for other customers has upset a lot of iPod owners.

After this year's update it has also left App Store developers with the dilemma of writing apps either for the latest OS version or the largest potential customer base.

If the proposed rule changes are approved by the FASB Apple wouldn't have to charge for future updates to iPods or older iPhones.

Written by: Rich Fiscus @ 18 Sep 2009 4:39

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• 21 comments

• KillerBug

  What a load of crap. No one is making Apple charge it's customers for software updates...they are doing that on their own.
  
  The FASB does not force anyone to charge for updates, nor does it force anyone to charge for anything at all...they have never blocked a Linux release, and Linux has always been free. They have never blocked Windows updates...and some windows updates make huge changes to both functionality and appearance.
  
  The simple fact is that Apple is charging customers for updates that fix bugs...and no one is forcing them to do it.
  
  Just another reason to stay away from this rotting fruit.

  18.9.2009 05:02 #1

• Josipher

  accidental repost

  18.9.2009 05:44 #2

• Josipher

  Originally posted by Josipher: and that my friend, is why you do NOT buy ipod touch
  Shana Tova everyone

  18.9.2009 07:28 #3

• puterman

  Originally posted by KillerBug: What a load of crap. No one is making Apple charge it's customers for software updates...they are doing that on their own.
  
  The FASB does not force anyone to charge for updates, nor does it force anyone to charge for anything at all...they have never blocked a Linux release, and Linux has always been free. They have never blocked Windows updates...and some windows updates make huge changes to both functionality and appearance.
  
  The simple fact is that Apple is charging customers for updates that fix bugs...and no one is forcing them to do it.
  
  Just another reason to stay away from this rotting fruit.
  DITTO!!!!

  18.9.2009 10:06 #4

• BTFan

  Quote:Originally posted by Josipher: and that my friend, is why you do NOT buy ipod touch
  Shana Tova everyoneShana Tova to you as well.

  18.9.2009 10:27 #5

• atomicxl

  This doesn't make any since to me. Assuming that the accounting boards will force Apple to give away the OS for free is kinda a stretch. Especially when the boards don't have the power or jurisdiction to do something like that. At most they'll just have to change how they do the accounting for it, which is something that an accounting board does have the power and jurisdiction to do.

  18.9.2009 10:47 #6

• Gnawnivek

  What's upsetting is that if you don't want to upgrade (i.e. don't want to pay for it, even it's $10), some of the apps won't work :( Some of those free apps are quite handy, but then again, with new updates and all, you can't really tell they work until you tried them, which is a pain... Imagine you have to pay for every PS3 updates so that you can play games? It sucks to own an Apple product...

  18.9.2009 11:10 #7

• wabashman

  or just download the updates from any of the one million websites that have it.

  18.9.2009 13:47 #8

• tucker001

  You have the option to pay for the firmware or download it from somewhere else. The choice is yours.

  18.9.2009 15:00 #9

• IPRFenix

  
  
  It's the Apple way.

  18.9.2009 17:18 #10

• Amak

  Originally posted by tucker001: You have the option to pay for the firmware or download it from somewhere else. The choice is yours.Or Apple could quit screwing over their iPod/iTouch/iWhatever customers.

  18.9.2009 18:00 #11

• bobiroc

  Originally posted by IPRFenix:
  
  It's the Apple way.Sure is. That is why they can charge for every 10.x OSX service pack. Hell I have a MacBook that I use for work since I support the iMacs on my network as well as the PCs and they wanted money to upgrade the firmware on the wireless network card. Reading the update log it was mainly bug fixes but it also enabled the Wireless N radio and when I called apple about it they said well it is an upgrade so we charge for it. I asked about the bug fix list and they said oh well that is just a perk to paying for the firmware.

  18.9.2009 18:09 #12

• MrPuffin

  Quote:Originally posted by IPRFenix:
  
  It's the Apple way.Sure is. That is why they can charge for every 10.x OSX service pack. Hell I have a MacBook that I use for work since I support the iMacs on my network as well as the PCs and they wanted money to upgrade the firmware on the wireless network card. Reading the update log it was mainly bug fixes but it also enabled the Wireless N radio and when I called apple about it they said well it is an upgrade so we charge for it. I asked about the bug fix list and they said oh well that is just a perk to paying for the firmware.lol 10.x is not a service pack its a whole new operating system the equivalent of service packs are free 10.4.x - 10.5.x - 10.6.x
  
  example i have 10.6 and a few days ago 10.6.1 came out
  
  also along the lines of n card they were not legally allowed to ship it for free so they sold it with leopard (10.5) or separate for tiger
  
  also to the people who hate having to pay $5-$10 go buy a Zune and be forced to upgrade rather than have the option and you will be seriously bummed out cause zunes suck (if it were up to me when i had my zune i would have had 1.0 not 3.0)

  18.9.2009 20:11 #13

• xnonsuchx

  Don't the same people get tired of their endless whining...or is that their only purpose in life?

  18.9.2009 20:17 #14

• bobiroc

  Quote:Originally posted by MrPuffin: lol 10.x is not a service pack its a whole new operating system the equivalent of service packs are free 10.4.x - 10.5.x - 10.6.x
  
  example i have 10.6 and a few days ago 10.6.1 came out
  
  also along the lines of n card they were not legally allowed to ship it for free so they sold it with leopard (10.5) or separate for tiger.you go ahead and believe the Apple BS. I have a MacBook with 10.4.x on it and while I have not seen 10.6 yet our Teachers that teach in the Mac Lab insisted they needed 10.5 and paid $99 a copy for each iMac and at 100 iMacs that was $10,000 for some stabilty updates and minor added features. So apple likes to be different and say the number after the period is a new version. A completely new OS would be OS11 now wouldn't it. Whatever you want to believe.
  
  And in regards to the wireless card I could care less about the n capability since all the access points I connect to are g, but since it has problems keeping a stable connection it would be nice to have the firmware upgrade that said it was supposed to address some of those issues, but hell if I am gonna pay for it.

  18.9.2009 20:26 #15

• vyze

  First off, if you paid for 3.0 then 3.1 is free so "charging for fixing bugs" doesn't apply.
  If your iPod touch came with 2.x then all of the 2.x.x is free.
  If you paid for Windows XP SP1 then Windows XP SP3 (via THOUSANDS of updates) is free.
  If you paid for Vista [the world is laughing at you] then Vista SP1 is free but you have to pay [or will 10/22/2009] for Windows 7.
  
  iPhone's update is free but what one doesn't take into consideration that the update MIGHT BE REQUIRED of AT&T [or appropriate cell phone provider] to match new technologies such as 4G/5G/6G (you get the point) and so if one is FORCED to upgrade, where they aren't with the iPod Touch, then being charged would be an outrage. No one is forced to upgrade from Vista to Windows 7...
  ... they just want a working computer :X

  19.9.2009 00:18 #16

• vurbal

  Just to clarify the issue, FASB rules say if there will be extensive modification in the future (the features added by major OS revisions) revenue for the software portion of the sale should be recognized as an ongoing contract. This is what they do with the iPhone. Partial revenue from each iPhone sold is recognized each month for 2 years. This is covered by FASB SOP 97-2 (Revenue Recognition on Sales 0f Software) which states that revenue should be recognized when delivery has occured.
  
  They could do the same with the iPod Touch, but it would skew iPod revenue figures because revenue for other iPods isn't recorded like that. When Apple releases the financial statement for a given quarter, assuming a 24 month contract model, in the first quarter of iPod Touch sales it would look like they made less than they actually did. Going forward it would also add in revenue from sales in previous quarters, making the numbers even less accurate. This has already caused a great deal of investor (and analyst) confusion over iPhone revenue.

  19.9.2009 01:07 #17

• vurbal

  Originally posted by atomicxl: This doesn't make any since to me. Assuming that the accounting boards will force Apple to give away the OS for free is kinda a stretch. Especially when the boards don't have the power or jurisdiction to do something like that. At most they'll just have to change how they do the accounting for it, which is something that an accounting board does have the power and jurisdiction to do.
  It's not about whether they're forced to give away updates. It's about whether they're allowed to. See my previous post for a clarification of this point.

  19.9.2009 01:08 #18

• KillerBug

  Quote:Originally posted by atomicxl: This doesn't make any since to me. Assuming that the accounting boards will force Apple to give away the OS for free is kinda a stretch. Especially when the boards don't have the power or jurisdiction to do something like that. At most they'll just have to change how they do the accounting for it, which is something that an accounting board does have the power and jurisdiction to do.
  It's not about whether they're forced to give away updates. It's about whether they're allowed to. See my previous post for a clarification of this point.Exactly, they wrote the software, and they are allowed to give it away for free or charge a fortune for a tiny bug fix...they choose the later option. The fact that they are doing the accounting on the iPhone in such a way is a sign of a dishonest company playing with their earning reports...a bit like Enron used to do, just not as serious yet.
  
  As for those who say that "You have to pay to upgrade vista to windows 7" - While this is true, you do not have to pay to upgrade vista to service pack 2. You do not have to pay to update drivers via windows update, and you do not have to pay for bug fixes. Also, if you have a working XP machine, there is nothing forcing you to upgrade to Vista or Windows 7.
  
  As for those who say "The Zune sucks too" - I agree, but the Zune is not the only competition. Most of the people who have tried the creative units say that the audio quality is far superiour to that of the iPOD or Zune, and the price is lower, with free software upgrades. This is from Creative, one of the crummiest companies around. The fact that they make a product that is so much better than that of Apple or Microsoft speaks volumes about how terrible the iPOD and Zune realy are.

  19.9.2009 05:28 #19

• vyze

  Quote:also along the lines of n card they were not legally allowed to ship it for free so they sold it with leopard (10.5) or separate for tigerIt was also shipped with the CD that came with all of the airport base stations for "no additional cost"

  19.9.2009 14:53 #20

• MrPuffin

  Originally posted by bobiroc: Quote:Originally posted by MrPuffin: lol 10.x is not a service pack its a whole new operating system the equivalent of service packs are free 10.4.x - 10.5.x - 10.6.x
  
  example i have 10.6 and a few days ago 10.6.1 came out
  
  also along the lines of n card they were not legally allowed to ship it for free so they sold it with leopard (10.5) or separate for tiger.you go ahead and believe the Apple BS. I have a MacBook with 10.4.x on it and while I have not seen 10.6 yet our Teachers that teach in the Mac Lab insisted they needed 10.5 and paid $99 a copy for each iMac and at 100 iMacs that was $10,000 for some stabilty updates and minor added features. So apple likes to be different and say the number after the period is a new version. A completely new OS would be OS11 now wouldn't it. Whatever you want to believe.
  
  And in regards to the wireless card I could care less about the n capability since all the access points I connect to are g, but since it has problems keeping a stable connection it would be nice to have the firmware upgrade that said it was supposed to address some of those issues, but hell if I am gonna pay for it.so your saying windows 95 98 2000 and NT didn't do the same thing they were all based off of 95 and Windows 7 is based off of the windows vista kernel so isnt windows 7 just vista with less features and a new theme? my reasoning for apple holding on to 10 is OS X With the big X is a big symbol of mac now Would MAC OS XI look as Good Not Really and i would say about the school buying 100 coppies that was there own damn choice to buy it and does the Syetem Truely have To Be ReWritten From Compleat Scratch In Order For it To be A New Sysem
  
  Windows 7 Is Vista
  Windows 98,NT,2000 Me Are Windows 95 With Improvements
  Mac OX Versions True may all be based off Of The same kernel But When You Spread Out The Changes Are They Really The Same System?
  
  So If You Hate Newer Systems Go Back to Using 10.0 or os9 And See How Much It is different and don't ridicule apple for doing the same thing every company does but in a little different way
  

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  1.10.2009 02:34 #21