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by dhruvmittal 4617 days ago
I just wish they'd gone ahead and made iWork free across the board (or perhaps for Mavericks users), rather than only with the purchase of a new device.
4 comments

This likely has to do with GAAP (Generally Accepted Accounting Principles).

iOS updates used to cost a nominal amount of money because new features have to have new revenues. (Why? Imagine you are selling a physical good, and promised a 1 year warranty - you have to reserve some revenue to cover the costs of honoring that warranty. If you didn't it would artificially inflate profits now by hiding future liabilities.)

So what Apple does to get around this is reserve a bit of revenue from each new iPhone and realizes it on the balance sheet to cover the ongoing costs of iOS updates. I imagine this is what they are going to do with Macs too to cover OS X costs, and if this is correct it will likely be mentioned at next week's conference call.

I think the GAAP part of it is that Apple has to be consistent with their previous revenue recognition strategies.

GAAP itself doesn't force similar companies to recognize revenues in the same fashion that Apple did with the iPhone, i.e., you can make a phone and provide software updates that provide new features for free.

I suspect they will at some point in the next ~18 months.
if you already had iWork, they just upgraded you for free.
Ditto.