Yep, the $20 Touch Upgrade is a Rip-Off

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Nilay Patel at Engadget has a fascinating post about Apple’s $20 charge for Mail, Maps and a few other apps on the iPod touch, allegedly because doing otherwise would run Apple afoul of Sarbanes-Oxley Act accounting requirements. Essentially, the argument goes, Apple is required to charge for any “major” features that aren’t enabled upon shipment for any product that doesn’t have its cost spread across a recurring subscription business model, as the iPhone and AppleTV are.

Which sounds plausible, until you realize that Apple has enabled such features as podcasts, search games and others for the iPod without charging for it. Not to mention which, iTunes is perpetually upgraded for free, no matter what you’re installing it on, whether you even own an iPod or not. Patel puts it well:

iPod name or no, the iPod touch is essentially a little computer, and the whole purpose of software is to enable “significant unadvertised new features” on a computer. For Apple (or anyone) to say that a mail app is a “significant new feature” for a computer is pushing the line just a bit far, and it makes us wonder how the company accounts for new versions of iTunes, QuickTime, and Safari, each of which add new features to already-sold Macs — and how things are going to play out when the iPhone / iPod touch SDK is released next month.

Seriously. Something stinks in Cupertino. Why the heck should a consumer have to care whether the device they buy gets reported as subscription revenue or not? That’s a company’s problem, and it’s goofy to discriminate between products on an arbitrary basis. Just sounds like a way to get some extra bucks out of touch owners to me.

Via Engadget.

71 responses to “Yep, the $20 Touch Upgrade is a Rip-Off”

  1. AJ says:

    considering the size of the update, i’d be willing to bet mail wasn’t on the touch before. since it would hav eben illegal to hack the touch to put it on there, you can;t have it on the touch. so apple just sold touch users mail.app (etc), for their touches, that sounds very reasonable to me. I am by no means an apple fan boy, but when you consider the cost of developing the software and the bandwidth for distributing it–thats a lot of money–i don’t that charging $20 for the update is unreasonable, especially since any other means of getting those apps would require (1) buying an iphone (2) hacking and risking bricking your touch. apple also makes much less money off of the touch because there is no plan involved like with the phone. for the record, i don’t have a touch, maybe i’d feel different if i did, but as of now i think people should stop complaining that for $20 they can upgrade their touch to essentially be an iphone minus the phone, camera and EDGE network. thats a good deal in my book!

    everyone needs to quit bitching and realize apple won;t just hand out freebies without incentives for them as well.

  2. AJ says:

    considering the size of the update, i’d be willing to bet mail wasn’t on the touch before. since it would hav eben illegal to hack the touch to put it on there, you can;t have it on the touch. so apple just sold touch users mail.app (etc), for their touches, that sounds very reasonable to me. I am by no means an apple fan boy, but when you consider the cost of developing the software and the bandwidth for distributing it–thats a lot of money–i don’t that charging $20 for the update is unreasonable, especially since any other means of getting those apps would require (1) buying an iphone (2) hacking and risking bricking your touch. apple also makes much less money off of the touch because there is no plan involved like with the phone. for the record, i don’t have a touch, maybe i’d feel different if i did, but as of now i think people should stop complaining that for $20 they can upgrade their touch to essentially be an iphone minus the phone, camera and EDGE network. thats a good deal in my book!

    everyone needs to quit bitching and realize apple won;t just hand out freebies without incentives for them as well.

  3. AJ says:

    bah, forgot to mention that upgrading itunes != upgrading an ipod. two different types of software, and really, podcasts may seem like a major feature but its still just an audio file on the ipod.

    similarly, would you expect to get a free upgrade to your ipod photo to play movies when the ipod video came out? no! its different hardware and software.

  4. Christian says:

    iTunes is a free product available for download to anyone, so it doesn’t seem appropriate to use it as an example.

  5. dolom says:

    I believe the release of these news apps is a good news for Touch owners since it means that Apple acknowledges that the Touch is worth the same treatment reserved to the iPhone and it’s not simply “another iPod” restricted to playing music and videos (initially it was introduced this way).

    Moreover Mail, Maps and Notes are nicely conceived and significantly expand the device capabilities.

    If it was just for SOX the same apps could probably have been sold at 1 USD instead of 20, as happened in the past for some other device upgrades.

    Personally I rather believe Apple used these apps to test the customer willingness to pay for iPhone apps, with a business model which is probably still being defined.

    Naming the bundle “January Software Upgrade” might be a hint at periodic release of new apps for the Touch which might somehow mimic the monthly fees payed by iPhone users.

    What really pissed me off is that I purchased my Touch 2 months ago and together with the new apps I ended up paying 399+20=419 EUR (613 USD) for a product which can be purchased in the US for just 399 USD.

    But I guess that’s less annoying than what happened to early iPhone customers when the price dropped unexpectedly after the first few months…

  6. Benedict says:

    Apple don’t up date firmware to ipods because they’re a hardware company. By not updating the firmware they drive sales of newer models. However, in the case of the touch there aren’t any newer models so I can understand why people are getting upset.

  7. hashim says:

    I don’t care how much apple is making loss on their iPods. All I care is that we who bought the iPod touch are forced to pay for applications which the new iPod touch buyers will get for free. Shame on you apple!

  8. RW says:

    I think what keeps setting people off are two things:

    1) iPod Touches that were JUST purchased (mine on 12/27) have to pay for an upgrade that iPod Touches made two weeks later get for free. No one would be complaining if the price had gone up $20 for the newer Touches (nor if it had been even a $15 increase). It’s the thought that the exact same product gets the features for free that’s irritating.

    2) The other item is that all of these applications already exist on the iPhone, so it’s not likely that significant development work was needed to put them on the iPod Touch.

    I really would like some of the new apps (Mail, Maps) but I’m having a really hard time dropping $20 on it…

  9. Doug says:

    I agree with AJ.

    1) Dude, it’s $20, not $50

    2) The iphones updates were additional functionality added to existing programs

    3) The Touch had 4 new programs added to it.

    4) $20 is a bargain. Just the added ability to get Email on the Touch is worth $20

  10. Bone says:

    I don’t believe it’s Sarbanes-Oxley – to certain extent. The answer to all this is revenue. The iPhone has a subscription base that provides revenue to support software development. The iPod Touch

    E.G., iTunes is a free download to anybody as it generates revenue to support its development. But, if you wish to add iWork to your Mac you have to buy the software. Apple made that hardware and that software so why is it not free?

    My question on the argument made by disgruntled users; why is it that new software on the iPod Touch should be free but to get new software on a computer it is OK to charge for it?

    – Bone

  11. Bone says:

    Last sentence, first graf above should have read:

    The iPod Touch does not have perpetual revenue to support application development.

    – Bone

  12. Bill Olson says:

    If you guys are this dense about it there is just explaining that I can do to convince you otherwise. They HAVE to charge you for it. Get over it. And $20 is a one time charge and is EASILY worth getting mail and maps. If that is too expensive for you then get out of the computer business as you obviously aren’t able to afford it.

    One has to wonder how you afforded your computer in the first place and how you manage to pay for your internet access. I could go on.

  13. C Rolls says:

    The subject of this post should actually read: “Yep, the iPod Touch is a Rip-Off.”

  14. Brendan West says:

    I don’t know, I kind of agree with The Macalope post to which John Gruber linked (http://blogs.cnet.com/8301-135

    “It’s a somewhat complicated accounting convention and perhaps you can argue that the iPod touch revenue should also have been recognized on a subscription basis, but then it raises the question as to whether or not all iPods should have their revenue recognized that way and pretty soon it all devolves into communism and everyone’s getting everything for free and even Randy Newman doesn’t want that.”

    It might just be as simple as the name iPod being attached to the device. If the Touch were treated like a subscription model, would the Nano be one too?

    And don’t give me that iTunes crap. There’s no subscription expectation from iTunes. Or Quicktime, or Safari, or Mac OS X.

    Apple TV, as well, is not a subscription model, but it’s a product newly introduced, with accounting practices not dating back to 2001.

  15. Kevin says:

    1) Um…iTunes is free, so there’s no Sarbanes-Oxley implications there. Duh.
    2) Apple never said the $20 Touch upgrade was because of Sarbanes-Oxley.
    3) $20 is a cheap upgrade for the functionality.
    4) Get over it.

  16. Greg says:

    All the commenters here have already thoroughly drunk the kool-aid and you aren’t going to be able to convince them with such things as “logic” and “sense” – apparently Apple are allowed to charge whatever they want for whatever they want and we should all just take it because “It’s only $20!”.

    Honestly, I think some people LIKE getting ripped off – some sort of internal desire to get taken advantage of and viewed as money bags with mittens.

  17. Andrew DK says:

    Second that, Kevin.

  18. Ryan says:

    Apple is starting to annoy me a little bit.

  19. attidude says:

    The biggest problem from my end is that it is making me less likely to purchase an iPod Touch. I’ve wanted one since they first came out, but I wanted a number of software features (Mail, SDK, 802.1x wireless authentication to get on campus wireless networks, etc) and also would have preferred the addition of hardware bluetooth with a full bluetooth stack that supports A2DP and DUN (dial up networking to get on the internet through a mobile phone).

    Now, with this update, the iPod Touch is almost there… Apple could conceivably add in 802.1x authentication and other software features like Cut and Paste, and Live-search of songs by title or artist just like in iTunes in the future, and I could possibly live with these limitations now, until they are added. But if the last $20 application update creates precedence, in February, Apple could release the SDK, and charge a $20 fee to add your own apps… Then a month or two later, Apple might come out with firmware update adding Copy/Paste and searching, and charge me another $20. And then a month or two later, there’s a new software update adding 802.1x authentication… and so on…

    And pretty soon that $300 or $400 you spent turns into $500 or more, all just for simple software updates that SHOULD have been on it from the beginning. And Apple will continue releasing “unfinished” products that have so much potential, but are crippled or incomplete in their implementation.

    Does anyone else wish we could go back to the time when you could buy a product, and get new/forgotten/unfinished features by software for free, but have to pay for new hardware when the feature requires the hardware (such as adding video to an iPod requires more powerful processors, and color screens that the original iPods did not have)?

  20. Meatyard says:

    Can we stop whining please? $20? I remember when Apple released a slew of new ipods where the new feature was shuffle songs on the main menu. i would have paid to add that to my old ipod. i have mail now, and never even expected to have it.

  21. AlexK says:

    The iPod Touch is a DAP, an MP3 Player, a mobile music (and video) thing. It is not and not meant to , nor does it pretend to be a portable multi purpose computer, although it is driven by an operating system that could easily make it one. But it isn’t.

    “Mail” is not a feature you get of a DAP normally, neither a web browser or those other applications. For a Mac Mail is a desired, expexted, even required app, for an iPod it’s not.

    So, for the extra-ordinarity for an mp3 player alone, $20 is a steal for those apps.

    Sarbanes-Oxley might (or not) be the reason Apple cashes in on the Touch, but most of all S-O it is the reason the iPhone (and AppleTV) get updates “for free” (as Apple argued last year), at least directly . But Apple surely wants that money and found another way to get it: Revenue Sharing.

    Where up to now the Firmware was thought to be part of the hardware (-price). This would explain the unwillingness to share amongst the providers. It’s not so much that Apple charges a fee for the Touch update, but that for the iPhone doesn’t (from the consumer) on similar updates (like the WiFi Store).

    Ciao, Alex

  22. Docteur Christophe says:

    At least, every major updates of Mail application had not been free!
    They were part of the new MAC OS release.
    There is no Mail 3.x for Tiger.
    Safari, I don’t know, it must be more complicated.
    For the free iPhone update, don’t forget that Apple is getting quite a high part on recurring charges of those phones.
    So the guys that invoke SOX seems to be right.

  23. Andreas says:

    Whether or not Apple HAS to charge for the new update, I still think it’s a shame that they are charging for the software. Here we have an iPod that have an almost limitless amount of potential (software wise). Imagine regular software updates. Not just new apps or improvements, but also interface improvements. Just like we have seen on OS X over the past few years, and also on the other iPods. I got myself a Touch because I saw this potential, and I’m loving the hacking community for their brave work and development for the Touch. I would love it if Apple would hint a bit more at the iPhone and iPod Touch’s future and NOT put more price tags on it. If the definition of the price tags and software updates for the devices (iphone+touch) are in a grey zone atm, then let’s get it defined! Instead of leaving people worried when Steve introduces a new feature for either device, fearing that they’ll have to pay another 20 bucks then just do like they do with OS X. iPod Touch/iPhone OS 2.0 code named “Leopard Cub”, only $20. Now that’s more like it. Both devices are like small computers, let’s treat them like it!

  24. Jason says:

    Let me say this as an iPod TOuch owner. I can swallow the $20 charge for some of the features released within the January Software Upgrade and I am much happier for it. It made my iPod touch more enjoyable to use. I chose to pay $20 for the use of a mail app as I would any software on my computer.

    What I don’t like is the fact that Apple burriued some very important updates to the iPod Touch operating system within the software update. For instance, the 1.1.3 update WILL NOT allow you to move icons around the home screen or add aditional pages to hold more screens. This seems like a pretty major factor for those who will buy third party apps after the Feb release of the SDK comes out. That oly gives a non updater 9 empty spots to fill with apps before they run out of realestate.
    Which leads to the second issue. The addition of adding a icon from within safari to the desktop is not a new app but an update to an existing app. Can’t let people add shortcuts to the home screen if we won’t allow them to rearrange icons, delete icons or add additional pages. Coincidence?
    Regardless of Sarbanes-Oxley, this was purley financialy motivated or there would have been a $2 charge like the macbook wifi upgrade.
    Apple just went about it in a very poor way.

    Oh yah! Can anyone explain…
    “a recurring subscription business model, as the iPhone and AppleTV are.”

    …How the Apple TV is a subscription based model? I can rent and buy any thing on my ipod touch that can be done on the apple TV!

  25. Matthew J says:

    I have been trying to keep my friends from upgrading. The features such as moving icons, creating web short-cuts, etc that Steve Jobs showed during the keynote should have been included in the 1.1.3 release for the Touch.

    I am starting to get the feeling that Apple is loosing focus on their customers. I really hope that they decide to remove this charge, and provide software updates free.

  26. Nicolas says:

    One word: boo!

    Crippling the Touch for no other reason then to differentiate between the iPhone and then letting people pay extra for it afterwards.

    For shame, Apple!

  27. joeschmeaux says:

    Apple had to have this $20 plan in mind when they released the touch. Since Apple has a history of free upgrades for it’s OSs, people would expect the same in the touch. They should have told people upfront that upgrades wouldn’t be free or nominally priced. How many touches have been sold? How many people who bought one will upgrade? Multiply that by $20 and you have a lot of money! If people don’t piss and moan now, Apple will be tempted to charge even more for future upgrades. I think Apple should make upgrades free until they release OS 10.6! If Sarbanes-Oxley is an issue, then $2 should suffice. If Apple gets a reputation for nickel and dime-ing people to death, people will be less likely to purchase Apple products. Can you say “Hackintosh?”

  28. QQ says:

    All I see is a bunch of people who aren’t happy unless they have something to complain about. So you can thank apple for that much if you don’t think the upgrade is worth $20. I’ve spent more money on things I enjoyed less, and I imagine the rest of you have as well.

  29. theguycalledtom says:

    I saw a guy once who hacked his iPod Touch, he installed a lot of applications and the itouch OS automatically created a second page for more apps to be displayed and you could swipe between them. Unless that feature was included as part of the hack…

    What scares me is that the iTouch was only released on the 5th of September, and they are already charging $20 to update it. I could dig it if the apps were the same price as a song or a music video, 1 or two dollars each but to charge $4 each when most of them are just widgets that are free on a mac?

    Apart from maps, I bet these apps haven’t even been updated from the iPhone version. I bet there is still no copy and paste (heavily limiting the potential of a notes app) I bet the note app doesn’t sync with the notes in Mail on your mac and on your iTouch.

  30. jusben1369 says:

    One thing I think you’re also missing….iPhone users just saw the gap closed. I bought an iPhone instead of the Touch 2 months ago because of these missing apps. So iPhone people at least want to know that the price differential closed a little via the $20.

    I also agree that $20 is peanuts. Those are some mighty powerful apps that just got added…..

    PIsmo, you’re killing me. Talk about glass half full guy. “Thank you Apple for making this device much more exciting and relevant to me and giving me the features I wanted. But now I’m worried Apple men will come into my dorm each month and demand $20 more and force upgrade me…..”

  31. JobsIsTheDevil says:

    This is one of the Apple “features” that are conspicuously missing from the Mac vs PC commercials. Apple fanboys rejoice! You’re getting screwed again.

    I’m a bit upset at the fact that I have a 5G iPod that I can’t rent movies on. Mine is a bit over a year old, but it’s kinda funny that someone who bought a 5G around August or so gets screwed because they bought in August. Typical Apple move…don’t allow upgrades, force consumers to buy new hardware.

    More Kool-Aid Alice?

  32. CAMEL JOCKEY says:

    You whiners have a choice: don’t up grade or buy a Zune. Stop crying.

  33. JayPan says:

    Hi guys, just wanted to let you know we tried to debate about this update here : http://www.appledifferent.com/

    There’s some more information about this update, and as you can see, the situation is really unfair depending the country (New Zealand for instance, Europe where the difference between a Xmas Touch + the $20 update and a brand new 1.1.3 Touch is something like 60 to 70 dollars… ).

    Anyway, iPod Touch users feel ripped off, especially since iPod Touch is 4 months old. That just doesn’t encourage iPod owners to renew for another iPod, and Steve J. should take into account Jailbreak is a killer argument more than ever since the $20 update release.

  34. jackson says:

    I am outraged that Apple is charging early buyers of the iPod Touch $20 for a system update that ought to be free.

    While I understand Apple’s decision to charge money for the new applications the new $20 “application pack” also includes a SYSTEM UPDATE in the form of the home page editing, web clips, and lyrics features. All of these are updates to the currently existing iPod Touch software and NOT new applications, which means that they ought to be free to all users of the iPod Touch.

    Adding insult to injury these applications are all hidden in the 1.1.3 system update, a whopping 104.4mb file that all users must download if they want to fix bugs in the system. These applications can only be used when you pay Apple $20 to “unlock” them, but even if you decide not to buy them they stay on your iPod taking up precious space that could be used for songs, videos, or photos.

    Apple is normally wonderful when it comes to providing system support and updates, but having them shaft early adopters and loyal fans like this is offensive and shows that Apple has absolutely no regard for the iPod Touch community.

    You can leave Apple direct feedback here:
    http://www.apple.com/feedback/

    You can also sign this petition:
    http://www.petitiononline.com/

  35. Dman says:

    To acess the mail and maps and weather, do you need wi-fi connection? if you did, that would be a rip off.

  36. Jared says:

    I know that this article is very old, but for the sake of clearing the record, the author of this article should be shot at firing squad. Sarbanes Oxley has nothing to do with this charge. Perhaps EITF 00-21 (emerging issues task force), but not Sarbanes. Also, it’s not that either. Apple charged for it for one reason… they can. Learn about it.

    It’s been fun reading you morons actually buy into the line of crap that he is selling.