6 ms·

I'm guessing that this is a regulatory compliance thing :/

by idoh 16y ago

raganwald 16y ago
I'm with you. When you give software away instead of charging for it, while simultaneously making your money off an associated product, you are required to do all sorts of backflips over how you account for revenue. This is why certain updates for the iPod Touch cost money while they are free for iPhones: It is entirely driven by how Apple writes up iPod Touch vs. iPhone revenue.
- anonymous246 16y ago
  Citation? Sorry, doesn't ring true.
  - raganwald 16y ago
    https://www.pcworld.com/article/142272/accounting_rules_behind_ipod_touch_update_charge.html https://www.pcworld.com/article/142272/accounting_rules_behi... Apple reports iPhone revenues over a 24 month period, this is called subscription accounting. Since an iPhone is sold as a subscription, Apple can write off services associated with providing that subscription on an ongoing basis, i.e. give all upgrades away for free. http://tech.fortune.cnn.com/tag/subscription-accounting/ http://tech.fortune.cnn.com/tag/subscription-accounting/ iPod Touch and Mac revenues do not use subscription accounting, therefore Apple is not allowed to give away major OS upgrades for these products, it must treat upgrades as separate products that make or lose money for themselves. Apple is not allowed to give away a major iPod Touch upgrade and apply the costs of writing the upgrade to its iPod Touch business. I am certain of the rules around subscription accounting and its effect on requiring Apple to charge for iPod Touch and Mac OS upgrades (and Apple is happy to charge for OS X upgrades any ways). Whether the $4.99 for XCode is a byproduct of these rules is conjecture. I think so, but I've looked all over and I can find neither my Apple Employee badge nor my Chartered Accountant diploma, so it's more than fair to doubt me on this. p.s. Another clue to the reasons for the charge is contained in the fact that XCode is still free for ADC developers. Since ADC revenue is subscription-based, Apple can give away whatever it wants to ADC subscribers.
    - anonymous246 16y ago
      Thanks for the reply. I stand corrected.
- hyperbovine 16y ago
  Except that's not true anymore: "Apple has for the first time made this full iOS upgrade free to all of its iPod touch customers, rather than charging the customary $10 fee that provoked groans in the past." (http://www.ilounge.com/index.php/reviews/entry/apple-ios-4.0-formerly-iphone-os-4.0/ http://www.ilounge.com/index.php/reviews/entry/apple-ios-4.0...) This leads me to believe that the whole accounting rules canard was just a way to make more money. Why did they start charging for XCode? Because you'll pay it.
  - raganwald 16y ago
    I wouldn't be so quick to call it an accounting rules canard, there was a ton of analysis of the rule when the iPod Touch upgrade fee was first announced and there was very little doubt this was the case. And while I can be critical of Apple policies, I stop well short of suggesting that they would lie about an accounting rule. That's the kind of thing that gets people sent to jail, and certainly Microsoft would have held a press conference the next day explaining that Apple was lying. That being said, they haven't said that the XCode charge is a subscription accounting thing, so there's certainly no logical reason why you may not be correct in saying that they are charging for XCode because they can. I'm guessing otherwise, but this is armchair speculation. UPDATE: I was wrong about subscription-based accounting affecting how Apple accounts for expenses. Here's a link I found: http://www.macrumors.com/2009/09/23/standards-board-approves-changes-to-subscription-revenue-accounting/ http://www.macrumors.com/2009/09/23/standards-board-approves...
    - hyperbovine 16y ago
      So said accounting rule changed then? Honest question. And in any case, if that were really true, why not charge a penny? Or the download cost? I don't buy it.
      - masklinn 16y ago
        > So said accounting rule changed then? Or Apple's accountants changed. They seem to be very strange people, and I say that in a bad way. > And in any case, if that were really true, why not charge a penny? Or the download cost? I don't buy it. If they think they need to charge for Xcode 4, they probably think amounts under that would be seen as non-compliant. Facetime was $.99 and shipped with new macs.

I'm guessing that this is a regulatory compliance thing :/

by idoh 16y ago

I'm guessing that this is a regulatory compliance thing :/

I'm with you. When you give software away instead of charging for it, while simultaneously making your money off an associated product, you are required to do all sorts of backflips over how you account for revenue. This is why certain updates for the iPod Touch cost money while they are free for iPhones: It is entirely driven by how Apple writes up iPod Touch vs. iPhone revenue.

anonymous246 16y ago
Citation? Sorry, doesn't ring true.
- raganwald 16y ago
  https://www.pcworld.com/article/142272/accounting_rules_behind_ipod_touch_update_charge.html https://www.pcworld.com/article/142272/accounting_rules_behi... Apple reports iPhone revenues over a 24 month period, this is called subscription accounting. Since an iPhone is sold as a subscription, Apple can write off services associated with providing that subscription on an ongoing basis, i.e. give all upgrades away for free. http://tech.fortune.cnn.com/tag/subscription-accounting/ http://tech.fortune.cnn.com/tag/subscription-accounting/ iPod Touch and Mac revenues do not use subscription accounting, therefore Apple is not allowed to give away major OS upgrades for these products, it must treat upgrades as separate products that make or lose money for themselves. Apple is not allowed to give away a major iPod Touch upgrade and apply the costs of writing the upgrade to its iPod Touch business. I am certain of the rules around subscription accounting and its effect on requiring Apple to charge for iPod Touch and Mac OS upgrades (and Apple is happy to charge for OS X upgrades any ways). Whether the $4.99 for XCode is a byproduct of these rules is conjecture. I think so, but I've looked all over and I can find neither my Apple Employee badge nor my Chartered Accountant diploma, so it's more than fair to doubt me on this. p.s. Another clue to the reasons for the charge is contained in the fact that XCode is still free for ADC developers. Since ADC revenue is subscription-based, Apple can give away whatever it wants to ADC subscribers.
  - anonymous246 16y ago
    Thanks for the reply. I stand corrected.
hyperbovine 16y ago
Except that's not true anymore: "Apple has for the first time made this full iOS upgrade free to all of its iPod touch customers, rather than charging the customary $10 fee that provoked groans in the past." (http://www.ilounge.com/index.php/reviews/entry/apple-ios-4.0-formerly-iphone-os-4.0/ http://www.ilounge.com/index.php/reviews/entry/apple-ios-4.0...) This leads me to believe that the whole accounting rules canard was just a way to make more money. Why did they start charging for XCode? Because you'll pay it.
- raganwald 16y ago
  I wouldn't be so quick to call it an accounting rules canard, there was a ton of analysis of the rule when the iPod Touch upgrade fee was first announced and there was very little doubt this was the case. And while I can be critical of Apple policies, I stop well short of suggesting that they would lie about an accounting rule. That's the kind of thing that gets people sent to jail, and certainly Microsoft would have held a press conference the next day explaining that Apple was lying. That being said, they haven't said that the XCode charge is a subscription accounting thing, so there's certainly no logical reason why you may not be correct in saying that they are charging for XCode because they can. I'm guessing otherwise, but this is armchair speculation. UPDATE: I was wrong about subscription-based accounting affecting how Apple accounts for expenses. Here's a link I found: http://www.macrumors.com/2009/09/23/standards-board-approves-changes-to-subscription-revenue-accounting/ http://www.macrumors.com/2009/09/23/standards-board-approves...
  - hyperbovine 16y ago
    So said accounting rule changed then? Honest question. And in any case, if that were really true, why not charge a penny? Or the download cost? I don't buy it.
    - masklinn 16y ago
      > So said accounting rule changed then? Or Apple's accountants changed. They seem to be very strange people, and I say that in a bad way. > And in any case, if that were really true, why not charge a penny? Or the download cost? I don't buy it. If they think they need to charge for Xcode 4, they probably think amounts under that would be seen as non-compliant. Facetime was $.99 and shipped with new macs.