Apple to charge iPod Touch owners for new OS - again

Apple will release version 2.0 of the iPhone operating system in early July, CEO Steve Jobs has revealed. Existing iPhone owners will get it for free - iPod Touch owners, however, will have to cough up $10. iPhone 2.0 offers the ability to view and edit iWork documents - files from Apple's own Pages, Numbers and Keynote apps. …

[E_Nigma]

Well, that's just Apple being Apple

No matter what they produced, they always charged the consumer through one's nose, and a seasonal $10 OS upgrade that delivers features that ought to have been there in the first place (but not all of them, you know, their devices don't do everything, but they're great at what they do; plus, they have to save something for the next $10 upgrade) is very much like them.

[Ben Jamieson]

Surely you can't be....

.. trying to rehash the "why is Apple so mean for charging for updates" crap when the entire world knows they are required by law to do this due to US accounting practices.

Very lame, RegHack

As for the rest. Meh... its a phone. Admittedly, a better phone than 99.99% of other phones around, but its still a phone.

[Joe K]

Jobs can suck my balls

With a vast, and fast increasing range of apps available through installer (on my still 1.1.1 itouch) i see no reason to PAY to lose all that functionality.

For surely the thing he isn't mentioning here is masses of security locks to put a stop to us using our devices the way we want to (as in, without relying on bloody itunes and cash for everything).

[Anonymous Coward]

'...is Apple really so ungenerous it can't take $10 on the chin?'

Well, Apple doesn't have the iTouch sold through exclusive channels tied to extortionate contracts, so one could hardly argue that the iPhone upgrade was exactly gratis.

[scott]

Taking the P**S

I cannot believe that Apple want to charge me again for another upgrade.

You have to give them credit though this must be turning into a nice revenue stream for them?

After paying £260 for the Touch and then another £15 for the last upgrade Apple are getting nothing else from me.

[Urs Keller]

Blame it on SOX

Apple is charging because they HAVE TO!!! Yes, on our side of the pond (= Europe), it may seem unimaginable, but our poor fellows in the US have to.

The logic is something like "If it enhances the product, it has to carry a price". Otherwise, if you accounted for the sale of your product in your balance sheet and later enhance the functionality, it means that your balance sheet was not correct because the product was not finished, and therefore you accounted too much.

So by providing additional functionality, you may be liable of cooking the books ...

Oh dear!

[Vincent Rice]

Sarbanes Oxley

Do you really not know why Apple is obligated to charge for iPod Touch updates? Or is the chance to have at least one snidey per Apple post just too tempting? The reason has been covered ad nauseam, even by your own 'colleagues'.

[Michael C]

not their fault

...it's a sticky little law here in the states that prevents a company from recognizing revenue in one quarter for a sale made in another. I'm not a CPA, but basically, new features added to a device that has been paid for previously can only be done so if either a) the consumer pays for the new feature, or b) there is residual revenue from a subscription or other plan in place (aka monthly fees).

Apple does not have a choice, they MUST, by law, charge for these features. Adding simple software functionality is one thing, but major changes, including opening up additional functionality originally built in but not accessible at launch, must be charged for. Since they have to go through the effort, a dollar value consistent with the procesing charges must be applied. They could probably charge $4.95, like they have in the past for other items (like 802.11n on powerbooks), but this is a big deal, a complete overhaul, a ten spot is conmpletely reasonable.

[Anonymous Coward]

People jump to moan about iPod Touch software charges - again

The reason Apple charges for these upgrades is not because they fancy gouging their customers, but simply that they have no choice. Post-Enron accounting rules demand it.

iPhone feature upgrades are free because the revenue is recognised on a subscription basis. iPod Touch revenue is accounted for as a one-off, so there has to be a charge if Apple is to avoid having to restate its income for previous quarters. This is exactly the same reason the 802.11n update cost a couple of bucks. Blame the accountants.

On the upside, the iPod Touch 2.0 upgrade is half the price of the previous update to enable extra apps.

[Antidisestablishmentarianist]

You must be a Freetard

So used to getting your OS's for free*, you baulk at the idea that one, even an upgrade, might cost actual money....

Let the whining begin.

* via your saddo torrents

[Graeme McKeague]

Backward Cousin

Is the Ipod Touch like the backward 2nd cousin of the Iphone?? why are they charging for the update? or is it to screw the early adopters out of more money

[J]

Sad...

Sad that I try to get "educated" on tech issues reading El Reg and then end up receiving the real meat from the comments page. Hell, are the guys on the comment page right to begin with? Who can I really trust? Wikifuckingpedia? It seems like there is no difference at all these days, really...

[John Styles]

Hmm

Can one of the true believers trotting out the S-Ox Made Me Do It theory explain why Microsoft don't have to charge for service packs etc.?

[Daniel B.]

Pay per upgrade?

So by this logic, should every single farkin' Service Pack come with a charge???

They could simply state its an OS upgrade and that wouldn't count as a major upgrade. Then again, I am not an expert on US accounting. I barely understand our own laws...

[Chad H.]

I do pay apple

Like every other waranty loving iPhone user, I pay my network every month for my iPhone, who in turn pay apple... So in a way, I do pay apple every month. iPgod touch folks paid once, for the product as boxed.

[Chris]

SOX or not..

..I'll just do what I did with the 1.4 update that gave official mail and what not.. install it via Installer.app.

[jai]

value for money

it's also a massive upgrade

the extra functionality that v.2 will have over v.1 is imense - being able to handle office docs. support for 3rd party apps

i am actually surprised they're not charging the iPhone users also

[Jolyon Ralph]

Ok Fanboys.

If the real reason is that Apple are charging for this upgrade is because they simply have to for accounting reasons, then I'm sure no-one will mind if I download a copy of the firmware from somewhere else without paying for it?

No, thought not.

Jolyon

(ps. I did pay for the Apps upgrade EVEN though I had already downloaded them previously before they were officially available)

[Anonymous Coward]

If Apple are only charging to keep the beancounters happy....

... why aren't they just charging $0.01 for the update instead of $10?

Anyway, Apple still haven't added the features I want, namely Flash, a usable on-screen keyboard and a decent amount of storage (60GB+).

[Angus]

Ok

So if they are required by law to charge for the Touch "upgrade" why dont they have to charge for the iphone version? Surely that is an upgrade too.

[Anonymous Coward]

Sadly, they have to charge us

Blame the accountants.

If they give you new function that you didn't pay for, then they have to re-state income and recognize the revenue over the time between when you bought the product and when they send the update.

The exceptions for this are for fixing problems (which is why service packs are for free), or for a product that contains with it a service contract (which is possibly also what service packs come under).

They're not the only ones who have to do it. It's just a sad thing.

[Allan Rutland]

Well the accounting argument is trash...

as simply, if it was true than 1) every MS service pack would of needed it....and 2) why can Apple give an update free to the iPhone users while they screw the iTouch users.

It's cash making, Apples pay your subscription licensing model works like a charm on the Mac. Don't change the OS much, a few flashy bits here and there, throw in something simple like a jazzed up search utility, and tada new OS and a £100 per year subscription.

When you have a captive market, even more so of drooling fanboi's like they do then it's a fantastic business model. All credit to them on that.

[Tony]

Microsoft upgraded my OS...

I didn't pay anything for that? Surely all the 'enhancements' included in service packs are an admission that the original software was not finished?

Can't Apple just offer this as a service pack?

Hold on - what do I care?

[Anonymous Coward]

Explanation

According to SOX, the iPhone is a subscription based service and therefore upgrades do not need to be paid for. An OS upgrade comes under the terms of "repair" and therefore does not need to be paid for, although as software it's treated differently.

The OS on the touch is not treated as software because it's not available to purchase seperately as software. Because of this the OS changes the functionality of the hardware, and is therefore considered an upgrade - which must always be paid for

As someone who doesn't own anything more modern made by Apple than a 4GB Ipod mini, I am not sure if UK people have to pay for upgrades, but you know if you do as there has already been one. I would assume that UK customers also had to pay because the UK accounting standards reflect those of those buggers in the US.

I'm not an accountant by the way, just an MBA who did some finance on the course and therefore I give no guarantee of being right!

[Ben Jamieson]

If the Allan Rutlands of the world...

...spent less time with their fingers in their ears shouting "I am right, I am right" and spent ten minutes reading up on what people were saying and realising those people were, in fact, correct, then those same Allan Rutlands would have lots more free time to find new ways to make themselves look like idiots in public forums.

Paris, because even she is less embarrassing than Rutters.

[Anonymous Coward]

Accounting charges

Re: Angus, the iPhone has revenue realised over the long term (due to the tie-in with the provider), so they don't have to charge.

Re: AC, why don't they charge $0.01, I assume it's because the same SOX law (or whatever it's called) actually requires you to make an honest effort to estimate the cost of producing the functionality you're charging for. If Apple gets back $50 by charging $0.01 only, the auditors will say "so it really only cost you $50 to develop all that functionality?". So is $10 accurate? Probably not, but software development makes a mockery of many of our existing laws and business practices regarding valuation, as anyone who has tried to insure a software company can attest.

So why doesn't MS charge for service packs? Obviously, there's a way around this - I suspect that if you can argue that an update is mostly bug fixes, you don't need to charge. MS obviously don't want to charge for service packs and Apple don't want to say that their update is mostly bug fixes.

Plus, Apple probably doesn't mind having the money. They're a business.

Neither a fanboi, nor an accountant.

[joe]

I agree with Allen Rutland

And i add; its not SOX its greed. Plain and simple. Do they not sell IPODs right now? Do they not come with a warranty? If i buy one with the latest version do i not pay for the development of new features? Regardless of when i bought mine shouldn't the latest version work until they do a revision of the IPOD hardware itself?

For god's sake don't blame the bean counters on this one! Its pure Steve greed; nothing more and nothing less. You want to blame something blame capitalism with the reality of publicly traded companies. You see it every day, like that asshole Icann. If your company was partly owned by that prick you would look for bad tasting revenue streams to keep him from ruining it. Keep those investors happy or loose your job. Simple motivation isn't it?

SOX my ass... I'm out'a here

[dave thomson]

why no charge for MS serive packs?

Because that is bug-fixes, not additional functionality. The same reason why Apple Updates aren't charged either.

It's very simple (if you want to understand)

- Bug fixes to existing applications, no charge

- Additional or enhanced functionality, charge required.

How many of you get huffy when MS charges you to buy the next version of MS Office?

[Eric Van Haesendonck]

Not acceptable in Europe.

Frankly, as a European I find it difficult to swallow! I know that here (Belgium) people are very wary of any recurring charges: we will rather own our home than rent, we'll be very wary of any subscription etc...

Buying something that is paid once and for all or buying something that will cause me to spend money every month or year is something very different, at least psychologically.

This completely turns me off the iPod touch

If apple has these kinds of accounting issues, then it should just NOT declare the full value of the iPod touch on the quarter of the sale. For example sell the machine for 300 Euros, declare the sale as 288 euros, then declare a "sale" of 1 euro per quarter.

Not knowing how much we'll have to pay for the upgrades during the machine lifetime is unnaceptable, as it means it's not possible to know the real price of the machine at the time of purchase.

If that's too much of an accounting burden they can alway relocate to Europe. No wonder their products are less popular over here than in the US.

[Anonymous Coward]

@Allan Rutland

If you actually read posts before yours, you will see that it is not trash.

[Anonymous Coward]

This doesn't just affect Apple

I'll give you an example from a different business sector where this exact same thing applies: Xerox (remember them?) sell multifunction printers in the 7655/7665/7675 family which is now on Rev 2.0 software, introducing LAN Fax and some additional security features. Anyone who previously got a Rev 1.0 machine and wants that functionality has to pay for the upgrade. The reason? S-Ox.

[Scott Mckenzie]

@Allan Rutland

Demonstrating a complete lack of understanding there... well done.

Maybe if you read up on SOX and used your brain a little you'd understand why your above post is utter garbage, but evidently that is a little beyond you....

Never let that get in the way of having a pop though, eh?

[Albert]

What about the Sony PSP

What about the Sony PSP.

They have upgrade the system to add functionality without charging.

I got mine in December and since then I have received 2 upgrades for free giving me Skype, GoMessenger, RSS Feeds, Internet Radio and improved interoperability with the PS3. There were a bunch of back end things as well but I don't see them so I can't remember.

None of this is purchasable anywhere, is tied to the PSP and Sony do not charge.

Apple is blatantly using this as a money making activity.

I don't have a iAnything(tm), so not affected but don't like the business practice.

[Anonymous Coward]

$10? Get a job.

I can't believe people are whining over $10.

What is that, the price of a tank of gas in the US?

[E_Nigma]

Hmm...

Those legal bits are interesting, and perhaps the iPhone guys don't have to pay because of some loophole if their AT&T plan can somehow translate into subscription to Apple but:

- as someone said, if that's the only reason, why isn't the price something like $1;

- how come the people are not charged for firmware updates for other devices when they add functionality? Or OS service packs? If you compare the original XP with XP SP3, there are new features, and we got it all for free.

But I think the law is only a nice excuse for receiving tens of millions of dollars for giving the users the features they should have had from day one, such as ability to search contacts or a calculator that is better than the one on $50 phones (but it still doesn't bring copy/paste?!?!).

[Thomas Bottrill]

Accounting laws

If there really is law saying this accounting law then why can Microsoft and Sony offer updates that add new functionality for their respective consoles for free?

In fact, with the Zune, Microsoft offered all the v1 owners a free upgrade to the completely rewritten version 2.

Face it, it's just Apple trying to make up reasons for being able to get more money out of its customers.

[Hywel Thomas]

Ways and means

What they could do is offer the upgrade at a price in the US, but have it free elsewhere, and not do much to prevent users in the US getting it from foreign iTunes stores.

There may be a problem in that divvying up the development cost to US owners only would push up the cost (to those that didn't know how to get it for free).

As for "not knowing how much we'll have to pay for the upgrades during the machine lifetime". You don't _have_ to buy the upgrades. The amount you _have_ to pay is exactly nothing.

[Neill Mitchell]

Nail 'em up!

Nail some sense into 'em!

[E_Nigma]

Sorry about the double post...

... but I think this is relevant as it supports the point some others and I made (about the Zune firmware updates):

"The very first updates to the firmware added sharing features (send, community, list nearby Zune users) as described in FCC filings. Firmware 1.1 allowed device to inherit sharing capabilities described by codename Pyxis. Early firmwares patched software bugs. Later, the much anticipated 2.2 firmware released from about a year after first generation Zune added support for DVR-MS (Media Center Recorded TV) files, lossless playback, added wireless syncing, and GUI interface improvements."

So there were quite a few features added to the device, and how much was charged? But I guess that a few million units sold times $10 sounded just too tempting to Jobs and co.

[scott]

If they have to charge then why not charge $1?

Because this is a nice revenue stream for them that's why.

[Ben Jamieson]

Two things, people....

1: This is not a required upgrade. Your iPod Touch won't stop working if you don't pay for it. In fact, it will work exactly as it did yesterday. No difference whatsoever. It continues to do just what it did when you shelled out your lucre to buy it in the first place. So if that's your problem: Shut the f*ck up and sit down.

2: Apple puts a lot of money into developing this stuff. Are you honestly saying they should give it to you for free, just because you're a whining bitch?

At the end of every month, do you say to your employer (yes, I'm presuming you actually have jobs and don't simply live with your Mum in a bedroom covered with Star Wars and Take That posters - unlikely, but I'll give you the benefit of the doubt)

"No, its OK, you have all my work for free, I don't want a paycheck."

If not: Shut the f*ck up and sit your hypocritical arse back down.

As for all you saying proudly you don't/won't own anything Apple in the first place... what the f*ck are you doing here? Why not shut the f*ck up and sit down.

[E_Nigma]

@Ben

Apart from being rude, you are partially right about both points you made.

The thing is, though, that the product had shipped with quite a few simple and essential features missing or crippled. It WAS natural to assume that those features would be added later via updates, just like it happened with other products from other companies (the several times mentioned Zune, for example). So people bought the (not that cheap) devices believing that they would get that stuff some day and Apple did nothing to say that they were wrong or that they would have to pay extra to be able to search through their contacts (in my opinion, it can be argued that the product WAS shipped unfinished even though Apple charged full price). So there are grounds for displeasure.

Also, reading this may easily make one never want to purchace an Apple product, and those people have full right to express themselves.

[Anonymous Coward]

will post-11/7/2008 iTouch owners pay too?

I'm getting a 32GB iPod Touch when I go to the USA on 3 July (I'll probably wait until my last few days before I purchase it - more like on 23 July).

Given that the new software update (with the additional apps etc.) will happen on 11 July in line with the 3G iPhone launch, am I right in thinking new iPod Touch owners (ie. people who purchase post-11/7/2008) won't need to pay the $9.95 to download the new software?

[Walter McCann]

It is all a scam

Apple are hiding behind this "Accounting" reason to charge touch owners for the upgrade.

Note, if they have to charge for the updates then:

1) Why do Iphone users get them for free????

2) Why do NO other company that I have come across charge either (Microsoft adds new features the whole time e.g. IE7 tabbed browsing etc but don't charge)

This is a money making racket, I for one did not upgrade the last time and probably won't this time.

W.