Why does the update cost money

What about just having purchased an ipod touch? Of course 3.0 its not there, because its stock articles for the next weeks.
What to do now? I cant being called right now, because abroad. email support is not existing for these sort of things is it?

Please dont answer giving the link http://www.apple.com/contact/ - I know this one and it *****.
Any other ideas what to do or how to contact a person at apple?

I have read this thread carefully and there is a lot of mis-information in it.

Let me explain.

1. The free update to 3.0 for iPhone users is NOT linked to your phone network subscription in any way. The payments you make to your network provider are not the reason Apple give you the free updates.

2. The reason for the free updates is the GAAP accounting method Apple are using for the iPhone (which they DON'T) use for the iPod Touch. What Apple do is take the revenue for the sale of the iPhone and split it into 24 parts, every month after an iPhone is sold Apple show one 24th of the sale on their accounts, the other money is not shown. Apple therefore take the revenue and profit for the sale of your iPhone over a 24 month period. This is so they can add new feaures to the iPhone for free without breaking any of the Sawbane-Oxley accounting rules.

3. With the iPod Touch they take all the revenue at point of sale, no spread of revenue over 24 months. If they therefore gave free updates for the touch which added new features they would fall foul of the Sawbane-Oxley rules and could be sued by shareholders who can claim that the new features being added later for free have lost the company money.

So just to be clear, the free software is NOT related to your mobile service fee, but is a result of GAAP accounting. Do a search for Apple and GAAP and you will find that they fully explained this in their finance conference calls.

From Apple's own press release :-

*Non-GAAP Financial Measures
During fiscal 2007, the Company began selling the iPhone and Apple TV. Because the Company may provide unspecified features and additional software products to iPhone and Apple TV customers in the future free of charge, in accordance with GAAP the Company recognizes revenue and cost of goods sold for these products on a straight-line basis over their economic lives, with any loss recognized at the time of sale. Currently, the economic lives of these products are estimated to be 24 months. This accounting treatment, referred to as subscription accounting, results in the deferral of almost all of the revenue and cost of goods sold during the quarter in which the products are sold to the customer. Other costs related to these products, including costs for engineering, sales, marketing and warranty, are expensed as incurred. Further, the costs to develop any future unspecified features and additional software products that may eventually be provided to customers also are expensed as incurred. In contrast, the Company generally recognizes revenue and cost of goods sold for its other products, such as Macs and iPods, at the time of sale, as the Company does not provide future unspecified features or additional software products to those customers free of charge.

http://www.apple.com/pr/library/2009/04/22results.html

Message was edited by: Ian Parkinson

Even with the contract you don't have to update your iPhone with 3.0, same with the iPod Touch. Contract or not, it should be free for both!

Yeah, I pay $30 a month. This includes unlimited data. You can't say that all the money goes towards R&D. I paid alot more for my iPod Touch than I did for my iPhone, they need to thru in updates for the difference in price.

the windows operating system you mentioned costs hundreds of dollars more than other operating systems. updates are free for a while and support stops after about four years on each version of windows.
the mac is a safer machine with more updates than windows. not all updates cost money. the cost of the ipod touch os update is less than ten dollars. certainly less than ordering a windows replacement bootdisk from ms.
i am not personally allergic to spending small amounts of money for good work. how many windows hardware manufacturers purposely stop writing new drivers for their older hardware when there is a windows update just so they can sell new hardware? i am sure there are junkyards full of perfectly good web cams for this reason.
if you don't want to pay for the new features of the new operating system then you don't have to buy the new operating system. i am sure your ipod touch still works as advertised and you are happy with it.
now why did you bring up piracy <wink>.

You mentioned Major and Minor updates. Apple considers the move to 3.0 from 2.2.1 to be a major update. Just like Mac OS goes from 10.5 to 10.6, you pay money for the new version (in this case, $29). Windows would be the same, XP to vista, you go from Windows 5 to Windows 6, pay a few hundred dollars. The iPod and iPhone run a version of the Mac OS, and you're paying to do a major update. We have had minor ones before during 2.0 that were free.

And just like software, all the minor updates are free, but when they go from Version 1 to version 2, some will charge you to update. Its all the same concept.


Now, why does an iPod Touch user have to pay to update, as opposed to an iPhone user? I'm not too sure about that, but perhaps it could be that the iPod Touch version of 3.0 is customized to not have certain phone-oriented features? They have to tailor it for the Touch so they charge you for the work? No 100% sure, but then again, it IS only $10, where as updating an entire operating system like Windows will cost you $100+.

I read a post several months ago concerning this situation for the move from 1 to 2 and why iPod Touch users had to pay. Apparently in the Apple-AT&T contract that goes with the purchase of an iPhone (which seems more or less required to use the iPhone as a phone!) - it states that the purchase /contract price INCLUDES all updates for the contract period.

iPod Touch does NOT have a mandatory contract when you purchase it; so Apple is free to charge whatever they like for updates - and it seems that for major ones (1 to 2; 2 to 3) - they elect to charge $9.95. Hope this helps.

Sorbanes oxley, or something like this, this adds bluetooth to the ipod 2nd gen, effectively giving something for free, which under certain circumstances could be seen as an unfair incentive, see 802.11n update on macbooks, it costs $and is the same principle.

It's not really an update.

An update consists of bug fixes and improved performances.

The iPhone 3.0 OS has new features, so therefore is a new OS.

It's the same with Windows XP and Vista, and all the Mac OS X operating systems.

I didn't mind paying the $10 for the update, but what irks me the most is that they had us pay the $10 for the update and then gimp some of the new features (specifically the Bluetooth stack).

Kinda wish they would have announced ahead of time something like this:
"We will be unlocking Bluetooth support in the iPod Touch 2nd Generation units, but, unlike the iPhones, we will not be enabling support for headsets with microphones."

All they really did imo was just say "Hey, Bluetooth is coming!"

I think the argument should move to a different aspect.

Stop comparing the iPhone to the iPod Touch. Start comparing the iPod Touch to the Apple TV.

Both major and minor updates for the Apple TV have been free. Why? Because it is a revenue generating device.

In OS 3.0, Touch users now have the ability to purchase tv, music and movies, same as the Apple TV. This means that the Touch is now considered a revenue generating device, and not simply a mp3 player.

I look at the iPhone and feel it is categorized incorrectly though all this discussion. It's a phone with an iPod in it, not an iPod with a phone in it. Completely different market, completely different industry. Different set of rules to play against.

Unfortunately Apple invented the mp3 player market rules.

The argument I make is why does the Apple TV get free major and minor updates/upgrades when the iPod Touch, which is now (and in the past to some extent) has been a revenue generating device?

What's worse is that the iPod Touch is a revenue generating device, Apple gets 30% of all App sales! True Apple might get more % regarding media sales on the Apple TV, but over 1 billion Apps have been sold, I am sure they have generated way more revenue off the Touch the the TV, especially since way more people own the Touch than the Apple TV.

My possible foresight makes me think that maybe future updates (as long as Apple sees decent revenue increases from this new upgrade) will be free based on the business model Apple has chosen to pursue for the iPod Touch.

The problem is in the past, all iPods never had major upgrades or updates, just fixes or minor new features. Eventually Apple might have to answer to its customers regarding this and the revenue generating crowd.

Well said Tim. I had not thought of it that way as I do not have the Apple TV or iPhone.

@David: Perhaps 10$ means more to me than it does to you. (Please feel free to send any other 10$ you don't feel you need to me directly.)

In the scheme of things, and with the price of Touch's, $10 represents very little. A gallon of milk is $4. A large pizza at Roundtable is around $17. Gas is $3. $10 to get functionality you didn't have when you bought your Touch isn't a bad deal. You can either pay the small upgrade fee (once they patch the update. 🙂 ) or go without. No one is forcing you to pay.

This isn't as unusual as it seems. In the distant past (c2000) I had to pay around £15 to get the Palm OS 3.5 upgrade for my then Palm IIIx which was sold with Palm OS 3.3.

Apple are charging £5.99 for this OS upgrade and I'm getting more feature changes from it that I did from the Palm OS 3.3 to 3.5 upgrade.

Also, the £5.99 fee allowed both my 2G and 1G iPods to be upgraded: iTunes showed the Buy Upgrade screens for the 2G and when I went to upgrade the 1G iTunes recognised that I had already paid and offered me Update screens instead and then downloaded the 1G specific firmware. The Palm OS upgrade was device specific to the IIIx.

As to whether Palm or Apple have to charge for OS upgrades to buy-once 'PDA' devices is arguable, but SOX didn't apply to Palm back then and they still charged.

What will be interesting is if Apple continues to charge for OS upgrades now that movie downloads and rentals are supported on the iPod iTunes Store. What is the difference between it and the Apple TV, where OS upgrades are free?