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JASmine

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Jun 22, 2007
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6
#1
Accordinging to today's Apple quarterly results call, the CFO stated that iPhone revenue recognition would be spread out over time to account for feature upgrades being available free to owners! At least that's what I think he said.:):)
 

kdarling

New Member
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Jun 20, 2007
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NJ, NC, CO
#3
Since Apple is reportedly getting both a $200 sale, and ~$120 two year royalty, that BUYERS normally get as subsidies, they should make updates for "free".

They're doing a lot of hand waving, and smoke & mirrors, to keep iPhone customers from thinking about how much more they paid, than for other phones. The initial buyers might not mind, but later ones will.
 

bcaslis

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Jun 26, 2007
144
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16
Oregon
#5
Apple has said from the beginning that they would account for revenue over time so they could add new features. So instead of charging for the 802.11n enabler like they did with early MacBook Pro Core 2 Duos, they will provide bug fixes and new functionality to the iPhone for free.

Doesn't mean you will get 3G speeds, but it likely means new fun apps for free.
 

pcar993

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Jul 2, 2007
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#6
hmmmm... i think people are reading too much into the statement. here is a more pragmatic read:

- Apple is accounting for the revenue as subcription services. This means it is ratably recognized over the commitment period of 2 years.

- It does not mean we will get everything developed for free over the next 2 years. Likewise it also doesn't mean we won't get upgrades/bug fixes for free after the two year period.

- More than likely we will get updates/bug fixes for free, but that has nothing to do with the statements made by the CFO. It has to do with keeping customers (especially loyal cult like customers) very happy.

Bottom line don't confuse revenue recognition with free software, updates and bug fixes.

PS - I really hope they fix the outlook calendar sync problem soon! ARGH.
 

Swagger

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Jul 9, 2007
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Fort Lauderdale, Florida
web.me.com
#7
PLEASE SATOP MENTIONING THE PRICE of THE iPHONE!

Since Apple is reportedly getting both a $200 sale, and ~$120 two year royalty, that BUYERS normally get as subsidies, they should make updates for "free".

They're doing a lot of hand waving, and smoke & mirrors, to keep iPhone customers from thinking about how much more they paid, than for other phones. The initial buyers might not mind, but later ones will.
I have noticed that people have continued to talk about the price, of the iPhone. My question is this, is this the first PDA phone most of you have ever bought? I regularly pay between 600.00 and 700.00 for the latest PDA Phones, Sprint offers. I don't wait until upgrade time to purchase. I buy when the latest, hottest devices come out (like I did with the iPhone and my addition of At&t service to get it). I thereforee, have to pay full price. If you want it (and can afford it), you buy it, if you don't, then don't buy it, but Please, Please, Please, people, STOP TALKING/CRYING ABOUT THE PRICE (it is so crass to continue to mention the price),:mad: it's nothing new for PDA Phones! If you couldn't afford it, you should have left it at the store! M
 

Tinman

Evangelist
Gold
Jul 16, 2007
4,334
183
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Aridzona
#8
hmmmm... i think people are reading too much into the statement. here is a more pragmatic read:

- Apple is accounting for the revenue as subcription services. This means it is ratably recognized over the commitment period of 2 years.

- It does not mean we will get everything developed for free over the next 2 years. Likewise it also doesn't mean we won't get upgrades/bug fixes for free after the two year period.

- More than likely we will get updates/bug fixes for free, but that has nothing to do with the statements made by the CFO. It has to do with keeping customers (especially loyal cult like customers) very happy.

Bottom line don't confuse revenue recognition with free software, updates and bug fixes.
From the horse's mouth, during Apple's Q2 financial call (emphasis added):
========================================
"5:12 iPhone: Apple plans on developing new applications and software features for the iPhone. Many of these features will be free upgrades. They will use subscription accounting so they don't need to charge for these new features.
5:13 Want to 'surprise and delight' iPhone customers."
...
5:19 Question: Explain the subscription model of the Apple TV. Answer: they are doing it so they can provide new applications and software for both the iPhone and Apple TV."

http://www.tuaw.com/2007/04/25/apple-financial-results-q2-2007/
========================================

Doubtful they will risk a PR issue by nickel-and-diming early adopters at this stage of the game.


--
Mike
 

JASmine

Member
Bronze
Jun 22, 2007
36
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6
#9
The actual words used by the CFO were:
"..by including new features and applications into the iPhone at no charge to the customers.."

The 'tuaw' quote was by a person listening to the call and using their own words to describe what was said.
 

Tinman

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Jul 16, 2007
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#10
The actual words used by the CFO were:
"..by including new features and applications into the iPhone at no charge to the customers.."

The 'tuaw' quote was by a person listening to the call and using their own words to describe what was said.
Uh, "no charge" is different than "free," how?


--
Mike
 

JASmine

Member
Bronze
Jun 22, 2007
36
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6
#11
Mike...I was focusing on the word "many" in the tuaw quote. I interpreted the CFO words to mean "all". It's no big deal either way. I hope that they add lots of stuff!
Thanks for all your helpful posts.
 

Tinman

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Jul 16, 2007
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#12
Mike...I was focusing on the word "many" in the tuaw quote. I interpreted the CFO words to mean "all". It's no big deal either way. I hope that they add lots of stuff!
Thanks for all your helpful posts.
Got it. I thought perhaps you were trying to say that updates weren't going to be free (i.e., none of them). Thanks for the clarification.

That said, and at the risk of getting flamed, if an update appeared today for $30 that added cut-and-paste and Bluetooth A2DP I wouldn't be able to resist it. ;)


--
Mike
 

DRabbit

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Jul 2, 2007
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#13
Well, RingTones may come in an update, and I doubt they'll be free -- so it wouldn't at all surprise me for Steve and Company to make sure their statements don't suggest ALL updates will be free. It may be semantics, but it's an important distinction.
 

Tinman

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Jul 16, 2007
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#14
Well, RingTones may come in an update, and I doubt they'll be free -- so it wouldn't at all surprise me for Steve and Company to make sure their statements don't suggest ALL updates will be free. It may be semantics, but it's an important distinction.
I don't see anything posted here, regarding what Apple said, that implies all updates will be free.

As far as ringtones, if they are done via iTunes purchases it wouldn't surprise me one bit if they weren't free. But it wouldn't surprise me if they allowed bringing in your own either. After-all, we aren't locked into just purchased music when it comes to iTunes/iPhone.


--
Mike
 

kdarling

New Member
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Jun 20, 2007
425
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NJ, NC, CO
#15
I have noticed that people have continued to talk about the price, of the iPhone. My question is this, is this the first PDA phone most of you have ever bought?
I think you're reading something that wasn't said. Or maybe I am :)

For myself, I wasn't commenting on the non-subsidized price, which is reasonable. And if you feel like paying full price, more power to you.

I WAS commenting that, if Apple really is getting a large bounty plus monthly royalties, then those usually are the monies that are given back to users as a subsidy to get a cheaper phone price.

If Apple were a struggling startup company, then I can see how fans would be happy to give them free money. Been there, done that. But they're not a startup, and they're not poor... unlike a heckuva lot of iPhone buyers who gave up other things just to get one.
 

DRabbit

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Jul 2, 2007
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#16
I don't see anything posted here, regarding what Apple said, that implies all updates will be free.

As far as ringtones, if they are done via iTunes purchases it wouldn't surprise me one bit if they weren't free. But it wouldn't surprise me if they allowed bringing in your own either. After-all, we aren't locked into just purchased music when it comes to iTunes/iPhone.
Of course you're not, but no one is going to tell you to steal music to use as ringtones, including Apple. Even if they give you the ability to use your own MP3s it will be implied that you got them from ripping your own purchased CDs. Steve & Company won't be saying "yeah, go to limewire and steal a bunch of music to use as ringtones for free!"

But that's a whole different discussion ;)
 

pcar993

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Jul 2, 2007
34
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0
#17
I think we are all saying the same thing.

Bug Fixes: Likely to be free
Updates: Some will be free
New Features: Likely to charge for some part.
 

Tinman

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Jul 16, 2007
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Aridzona
#18
I think you're reading something that wasn't said.

For myself, I wasn't commenting on the non-subsidized price, which is reasonable. And if you feel like paying full price, more power to you.

I WAS commenting that, if Apple really is getting a large bounty plus monthly royalties, then those usually are the monies that are given back to users as a subsidy to get a cheaper phone price.

If Apple were a struggling startup company, then I can see how fans would be happy to give them free money. Been there, done that. But they're not a startup, and they're not poor... unlike a heckuva lot of iPhone buyers who gave up other things just to get one.
I thought that Apple gets about the same as what independent dealers are paid when they sell a new phone with a new line of service (they get continuing commissions too). Those dealer commissions don't affect subsidies, and you get nothing from those dealers down the road. AFAIK, dealers were not allowed to sell the iPhone (no room to pay that middle-man).

I think the difference with the iPhone model is that it's the first time a manufacturer is the one getting those commissions.

While I don't like the apparent non-subsidized price of the iPhone, if giving the commission to a manufacturer leads to better support I am all for it. To be frank, I never thought independent dealers brought enough to the table to warrant their commissions.


--
Mike
 

Tinman

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Jul 16, 2007
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#19
Of course you're not, but no one is going to tell you to steal music to use as ringtones, including Apple. Even if they give you the ability to use your own MP3s it will be implied that you got them from ripping your own purchased CDs. Steve & Company won't be saying "yeah, go to limewire and steal a bunch of music to use as ringtones for free!"
Huh? They don't tell you to steal MP3s now, I don't see why that would be any different if they allowed user-generated ringtones.


--
Mike