New accounting rules being considered by the Financial Accounting Standards Board (FASB) would allow Apple to stop charging for major revisions to the iPod Touch's OS. The FASB sets guidelines for Generally Accepted Accounting Practices (GAAP) on behalf of the US Securities and Echange Commission.
The two major OS updates released so far, coinciding with the introduction of the iPhone 3G and iPhone 3GS, have been free for the iPhone but not the iPod Touch. This is a result of how revenue for each is recorded on Apple's books.
Income from iPhone sales is currently spread across a two year period. This is due to a GAAP requirement that revenue from new features must coincide with the time they are delivered.
Because the revenue from iPod Touch sales are recorded all at once they are forced to charge a minimal fee for them. Despite the low price, paying anything for a product that's free for other customers has upset a lot of iPod owners.
After this year's update it has also left App Store developers with the dilemma of writing apps either for the latest OS version or the largest potential customer base.
If the proposed rule changes are approved by the FASB Apple wouldn't have to charge for future updates to iPods or older iPhones.
Income from iPhone sales is currently spread across a two year period. This is due to a GAAP requirement that revenue from new features must coincide with the time they are delivered.
Because the revenue from iPod Touch sales are recorded all at once they are forced to charge a minimal fee for them. Despite the low price, paying anything for a product that's free for other customers has upset a lot of iPod owners.
After this year's update it has also left App Store developers with the dilemma of writing apps either for the latest OS version or the largest potential customer base.
If the proposed rule changes are approved by the FASB Apple wouldn't have to charge for future updates to iPods or older iPhones.
