Apple to continually develop new software features for Apple TV, iPhone; offer free updates

Apple Store“The quick version: Apple blew past second quarter estimates, reporting earnings of $0.87 per diluted share, $0.89 per basic share. The official press release is here. But Peter Oppenheimer, CFO of Apple, provided some interesting details that aren’t in the release,” Carl Howe reports for Blackfriars’ Marketing.

“So here was the surprising news: Apple will continually develop new software features for the iPhone and Apple TV series, and Apple will upgrade the features free of charge. As a result, they’ll recognize deferred revenue for iPhone sales, accessories, and subscription revenue over 24 months. This accounting policy will have no impact on cash flow, but it will smooth out their lumpy results over two years,” Howe reports.

Howe reports, “Even more surprisingly, Apple TV features will also be updated over time free of charge, and therefore Apple will amortize that revenue over 24 months as well.”

Full article, with interesting tidbits about Apple Retails Store network and more, here.

[Thanks to MacDailyNews Reader “LinuxGuy and Mac Prodigal Son” for the heads up.]

36 Comments

  1. Hmmmm, if I read that right, Apple will defer some of the income from AppleTV and iPhone for a period of time.

    That means that while they will be sucessful right away, they will also get credit for the success (money wise) again and again over the next two years. Smart move, me thinks. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    en

  2. @Chris
    Not really. I think that the trend has been that you get what you bought on purchase date, and anything that comes after that you have to pay for. This has been true with Apple, Microsoft, etc. The exception has been that if you bought a new machine and the new OS came out within 90 days then you usually got the new version for free. I think it’s nice that Apple has decided to update our machines as new features come out. Let’s hope that begins a new trend.

  3. That’s “interesting”. Amortizing revenue over two years? If they’ve already started that, then they have hidden revenue they have yet to report! While the AppleTV is a low-profit item compared to Macs, reporting revenue for hundreds of thousands of them over the next seven quarters will camouflage their position – show it as weaker – while it grows stronger.

    OTOH: this says quite clearly that neither product is actually ready for Prime Time. They may be ready for the market they face, but they need more time to ramp up for the market coming soon.

    DLMeyer – the Voice of G.L.Horton’s Stage Page Pod-Cast

  4. Hmmm. Follow up thought.

    If Apple is announcing that it will update FOR FREE, this equipment, it means that if you were thinking of buying one and wanted to hold off for a better version 2 or 3 (Microsoft thinking 🙁 ) then you can now buy this right off the bat and know that you will have upgrades for free over and over again, No buying last years technology.

    Neat idea. Savvy business move.

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