$20 for an iPod touch software upgrade?

“Since my post yesterday about the $20 iPod touch software update several readers have contacted me to explain how Apple had to charge for this update because of generally accepted accounting principles (GAAP). This issue, so I’m told, is much the same as the way Apple had to charge $1.99 the 802.11n enabler for the Intel-based MacBooks and MacBook Pros. Personally, I don’t buy this,” Adrian Kingsley-Hughes writes for ZDNet.

“According to experts it is important to note that there’s nothing in the GAAP requirements that forces Apple to charge its customers for a software upgrade. The only requirement imposed by GAAP is that Apple must account for the separate value that the software brings,” Kingsley-Hughes writes.

Here are the new apps that have been added to the iPod touch:
• Mail
• Stocks
• Maps
• Weather
• Notes

Kingsley-Hughes writes, “To try to justify that any of this offers a $20 value is hard, especially when you consider the overall value that MacBooks and MacBook Pro customers got from the 802.11n switch on. Over the life of a MacBook that has to represent more than $1.99 worth of value if I’m paying $20 for a few apps, does it not?”

Kingsley-Hughes writes, “And finally, can someone please tell me what the difference is between the iPod touch upgrade which costs money and the Apple TV upgrade with is free and transforms an existing Apple TV device into what PC World is calling a substantially different product?”

More in the full article here.

One could say that those who purchased iPod touch knew what the device did and thought the price was right for what they were getting. If iPod touch users want to add more functionality for $19.99, then can. If they don’t, they don’t.

However, with Apple TV getting a massive upgrade for free and iPhone also getting significantly upgraded for no charge, it’s almost impossible to explain to consumers why Apple’s charging for one, but not the others. (We say “almost impossible to explain” because iPhone and Apple TV are amortized over 24-months, iPod touch is not; therein lies the rub) The better question: Is the update worth $19.99?

For consistency’s sake at the very least, Apple should either charge for all upgrades of this type or for none or do a better job of explaining upfront that, unlike iPods and other products, iPhone and Apple TV are special cases that are subject to free upgrades over a certain period.

[UPDATE: 11:58am EST: Fixed incorrect link code that was affecting display of the full MDN Take.]

141 Comments

  1. I didn’t like paying.. but.. man oh man.. is this worthwhile.. It was well worth the 20 bucks, imho.

    It transformed my ipod into a pda.. Just being able to read, send, and store email is a big plus.. especially when I can now read .xls, .doc, and pdf documents on my iPod. Not to mention that the google maps application is freakin awsome!

    Call me a fanboy.. but if you have an iPod touch and don’t do this.. your a fool.

  2. “Personally, I don’t buy this,” Adrian Kingsley-Hughes writes for ZDNet.”

    Personally, I don’t care that you don’t buy this, you cheap bastard.

    Too many hit whores oozing from stained house trailer carpet.

  3. If you do not want the extra Apps … then do not buy them … you bought the iTouch without them .. Apple is giving you something more for a few more bucks!! If everything were free the stock would reflect it ..

  4. Really, I think it should be $1.99 per app. And you can pick which ones you want.

    What makes no sense is that they are giving it for free on new iPod Touch models.

    There must be something to do with licensing for the Maps, Stocks, and Weather apps… That costs Apple something. Because all sorts of software upgrades on the iPhone have cost zero/zilch/nada

  5. “And finally, can someone please tell me what the difference is between the iPod touch upgrade which costs money and the Apple TV upgrade with is free and transforms an existing Apple TV device into what PC World is calling a substantially different product?”

    Because the they are accounting differently for the iphone and the apple tv than they did for the ipod touch.

    from CFO Peter Oppenheimer:
    “The executive said that it will report revenues attributed to both devices on a subscription-like basis, rather than count only the one-time costs associated with each device as they occur.

    Both the phone and media hub will receive a relatively steady amount of software features for free over their respective lifespans, meaning that the income from each sale in effect amortizes the software development costs after the product is released.”

  6. Complaining over $20 is silly, but if it now comes on any new iPod touch now for free, I can understand some grumbling. If Apple continued to make it a $20 updgrade, in a way that would actually be better. It would be like buying additional software.

  7. Clearly there are aspects of the optional new software that Apple did not author and must pay a license fee to distribute. The terms of the license must already cover new shipping iPod Touch’s but require the fee for retro upgrades.

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