Thing a Day, #3

Get ready for some complaints today.

In general, I don't own a lot of nice things. I've been wanting a netbook for taking notes in class, but at the moment, that's a luxury item. I generally don't need a lot of fancy gadgets to get by in life.

But my two prized possessions that I cherish are my ipod and my camera. The ipod I got after accumulating a few gift certificates from amazon, and waiting for the right time to order. I've had it for a year now, and although I can live without it, it's made life actually just a bit easier. It's essentially a replacement for a mobile computer, and it's actually very convenient to get internet without having to lug around a computer (although obviously you can't get internet just anywhere).
The iPod already came with the 2.0 version software, and had since been updated (twice) for free. I was well aware that with whatever the 3.0 version was going to be, Apple was going to charge for the update. Now that it's finally out, yes, the update will be $10. Not a huge amount, I know, but this has basically re-ignited a sore topic that had come up with previous revisions.
If Microsoft and Apple continually push out updates for Windows (SP1, SP2, SP3) and OSX for free I have to ask: why is this any different? Unlike, say, going from XP to Vista or from Leopard to Snow Leopard, these aren't huge sweeping changes, and it's definitely not a new product that they're selling. These are updates to an existing product, and for the most part, updates that most people agree should have been implemented a long time ago.

What's particularly interesting, though, is the hypocrisy with which they're treating iphone and ipod users. iPhone users are getting the update for free. Great for them. They pay an arm and a leg each month for data and phone services, and I'm sure they'd raise hell too if they were charged any more. Apple claims that the reason it's offered for free is that the revenue from the update is accounted for over the period of the phone subscription. I'm not sure exactly what kind of deal Apple and AT&T have, but I'm skeptical. It's well known that Apple and AT&T no longer do a revenue sharing deal, so Apple is not even seeing any money from the subscription, at least as far as I know. How then, are the two devices different from Apple's point of view?

(Some background info: Backing up a little bit to two years ago, iPhones cost $500 initially because they were not subsidized. Because of that, users paid slightly less in monthly cell phone bills ($60, instead of the current $70). On top of that, Apple and AT&T had a revenue sharing deal, where a small part of that $60 a month got kicked back to Apple. Moving forward a year later, the revenue sharing deal was killed, for reasons not important here. The deal now became such that the cost of the phone itself was dropped to $199 for the user, with AT&T subsidizing some unknown amount. In other words, Apple got all of its money up front. AT&T was paying pretty ridiculous high cost to acquire their customers, but on the other hand had them locked into a 2 year plan and began to charge a higher monthly rate to recoup their costs. Apple got all of their revenue up front, and for users, the cost of ownership stayed basically the same, just spread out over 2 years. The important point here is that Apple no longer got any part of the subscription revenue.)