I haven’t seen any mention in these stories of the obvious consequences to iPhone users.  Up until now it is only the iPod Touch users that have felt unfairly burdened with having to pay for OS upgrades (full version upgrades that is).  The single reason given for this is because the iPod Touch’s were not on the subscription based accounting as the iPhone is - soon to be was.  So now ALL the iPhone users will get the joy’s of paying $10/major upgrade to the iPhone OS.  At least it will seem more “fair” now.

ziploc, I don’t understand your conclusion.  this news is only about accounting rules and have nothing to do with how Apple would market futur updates.

I don’t expect an accounting rules on how to declare revenue to have any impact in this matter.  subscriptions for iPhone will probably continue to include updates free and have more to do with contract between carrier and Apple in this matter.

@Ziploc
My read of the accounting rule change allows a company to breakdown costs of software vs hardware and then recognize the hardware immediately and delay recognition of the future software cost which is include in the original purchase.  For example if the iphone cost $500 Apple recognizes the revenue and BOM over 8 quarters or about 1/8 per quarter.  The R&D and SGA costs are recognized immediately. If we assume a two year useful life, and one software feature upgrade per year at $10 per year then $20 of the cost would be deferred and $480 would be immediately recognized.  This same accounting could be applied to a MAC or Ipod, depends on Apple.  My guess is Apple doesn’t like to nickel and dime existing users so they would do away with 10/major upgrade for Iphone and Itouch and include the cost in the price of the device for its useful life.

ziploc, I don’t understand your conclusion.  this news is only about accounting rules and have nothing to do with how Apple would market futur updates.

From the iPodObserver:  http://www.ipodobserver.com/ipo/article/PC_Magazine_iPod_touch_Update_a_Bargain_at_20/

Briefly, Mr Sean recapped all the new features included in the update, and provided a compelling argument for spending $20. [The charge for the update is apparently required by U.S. Law since Apple doesn’t conduct subscription accounting for the iPod touch as it does with the iPhone and Apple TV.]

What I had forgotten was that this older upgrade was $20 instead of the 3.0 cost of $10.  So I guess we’re making progress.

What I had forgotten was that this older upgrade was $20 instead of the 3.0 cost of $10.  So I guess we’re making progress.

the upgrade cost is now at 4.95$ for the 3.1 which include passing from 2.0 directly to 3.1.