Accounting for iPhone, Apple TV's future

Apple is paving the way for free enhancements to the iPhone and Apple TV by making its accounting methods clear from the start.

The company will gradually recognize a portion of the revenue from each sale of those products as new features are delivered, Chief Financial Officer Peter Oppenheimer said Wednesday. This accounting method prevents Apple from having to endure a repeat of the backlash over its $1.99 fee for activating the 802.11n chip in Macbook Pros earlier this year.

The news came as part of Apple's second-quarter earnings conference call, in which the company reported increases in revenue and profits off strong sales of Macs and iPods. Later in the current quarter, the company plans to introduce the iPhone, which it hopes will create a third product line to complement the current lineup.

Apple plans to roll out "new software features and entirely new applications" for the iPhone over time, Oppenheimer said. But the company wants to keep the early adopters of the iPhone happy, since it's counting on those people to spread the gospel to the rest of the world, he said.

And while it wasn't a lot of money, Apple didn't make its users happy when it revealed in January it would have to charge $1.99 for a software download that unlocked the 802.11n wireless chips inside certain Macbooks and Macbook Pros. Because the famously secretive Apple kept the existence of this 802.11n chip under wraps, and because it recognized all of the revenue from the sale of those notebooks at the time they were sold, accounting experts said Apple had to charge a fee to satisfy accounting regulations that require companies to establish a value for product upgrades.

But by publicly declaring plans to roll out future enhancements to both the iPhone and Apple TV as well as its accounting methods, Apple has established a value for those future upgrades, since people will buy the product knowing they are getting more features over time.

"We hope the result will be to surprise and delight our iPhone customers," Oppenheimer said. As one might expect, he declined to provide specific examples of the features Apple has in the works, but the Apple rumor mill is likely in full swing following this news.

One enhancement that could be arriving soon is the ability to stream an iTunes library to the iPhone, which will soon be possible through a somewhat convoluted process using Sling Media's Slingbox software, as reported by CNET News.com. And Sling Media's CEO recently said that the companies had discussed extending that support directly to the iPhone, although it's not clear how eager Apple is to support third-party applications for its prized iPhone.

AT&T recently said it had received more than 1 million inquires from interested iPhone customers, but Apple has not said when it will start taking preorders for the product. Two versions are expected to be available for AT&T's network, a 4GB version for $499 and an 8GB version for $599.

[MCOjerry]

Meh...

...still pissed that there is only one carrier, and a crappy one at
that...

[davemartinatx]

What I hope to see on iPhone

With the rumors swirling around about Google coming out with
their own cell phone, I laughed. Google doesn't do hardware. In
fact, their internet software is mostly free.

So, I'd love to see Google take internet phone calling to the next
level -- whatever that is. The iPhone has wireless built in, right?
What if you could choose to make your call through the internet
when connected to a wireless access point INSTEAD of using
your Cingular minutes to do so?

Think about the implications... a true internet phone, that
functions as a standard cell phone when wireless access is
unavailable.

I'd also like to see the internal GPS tied to Google Maps (and
Google Transit), so you can get directions (or bus routes) from
where you are. What's the point of having the GPS and Google
Maps if you don't take advantage of their potential.

Oh, and to be able to get directions from your current location
to an address from your contacts would be tres useful as well.

Dave

[Maccess]

What the iPhone and AppleTV really are....

They're stealth Mac OS X machines. Sure, the current revisions may still lack the oomph to run as full fledged Macs, but they do run OS X, and following Moore's Law, we might see the iPhone and Apple TV transformed into:

1) iPhone - A computer in your pocket, add wireless keyboard and wireless display (products already available), and here is your new computer.

2) AppleTV - for all intents and purposes, it's a Mac Mini, albeit a somewhat slower one with a core solo running around 1Ghz. But it will run Mac OS X, and may be the basis for Apple's future enterprise and education Mac...at $299 or even less!

[sd1004]

iPhone already uses wireless

To the best of my knowledge, the iPhone *will* alreadt
automatically detect wi-fi and use it for the call.

[Heebee Jeebies]

I was interested in...

the iPhone. But with only 4 or 8GB there is no point. I see no reason why they can't have the same tiny hard drives as the 5th Gen. iPod. iPhone is going to be a tiny worthless toy. I refuse to carry both it and an iPod in order to handle the music and other things I want to take with me. What a joke!

Robert

[Llib Setag]

iPhone 1.0 : iPod 1.0

Remember the first iPod?
Big, small amont of space, expensive, but cool...
Then came iTunes music store & iTunes software for PCs "BOOM!"
Then the iPod mini, shuffle,nano,video, etc....
HUGE MARKET TODAY.

Remember, the iPhone has not been officially released yet AND it's the iPhone 1.0.

Surprise features not released to public yet?
Mac OSX Leopard 10.5 releases & software updates to iPhone & AppleTV happens?

Nobaody knows all of the story yet with these two items, except for Steve Jobs & he isn't talking (yet).
Remember when the first iPhone & AppleTV?

patience...

[ITWorker]

For the fanboyz

One comment that ring true through everything about apple

"But the company wants to keep the early adopters of the iPhone happy, since it's counting on those people to spread the gospel to the rest of the world,"

This "gospel to the rest of the world" makes me want to never buy an Apple product

[jessiethe3rd]

Nothing new here... Do the research

Do your research... Pocket PC or Windows Mobile 5 phones are nothing new and they have been doing it successfully for quite some time now..

HTC Shift (Windows Vista UMPC with 3G TRI-BAND/HSDPA)
HTC Advantage X7501 (Windows Mobile 6 palm top with 3G Tri-band/HSPDA)

FlipStart - CDMA Windows Mobile UMPC w/ Vista

If this is Apples foray into ultra mobile computing it has quite a ways to go to catch up.

[jessiethe3rd]

4GB or 8GB??

Seriously... I can take my WM5 or WM6 device and plug in a SD Card with 4GBs. 8MB SDIO cards will be available soon and my Treo 700wv will happily take them... really - what makes this so different?

[Softrend]

Apple may be able to do an end-run around RIM with the IPhone. Companies like Softrend Systems Inc. http://www.softrend.com are rapidly creating apps for the IPhone that will permit sales persons access to Inventory Item info and pricing, Customer history and the ability to place Sales Orders live in their ERP/Accounting system from an IPhone.

If Steve Jobs is serious about gaining traction in the Enterprise and business market with the IPhone, this is the kind of company he should be supporting with IPhone features that make such development easier.