Monday, November 10, 2008

iPhone Updates: What Happens After Year Two?

How do you like them iPhones?  Pretty good?  With each OS update, we get more features.  And for free.  Gotta love that.

What happens after the second year of ownership?  What about it, you ask?
If you're an iPod Touch owner, you know that each time Apple comes out with a major upgrade, you're forced to pony up $10 a pop.  For iPhone owners, there is no cost associated with upgrades.  This is because of the difference in how Apple chose to account for sales of the iPod Touch differently from the iPhone.
For the iPod Touch, sales are recorded in the financial quarter sold.  However, the iPhone sales is spread over two years.  I appreciate anyone to correct me if I'm wrong on this.  Anyway, this is why there is no associated upgrade cost for the iPhone OS.
But what happens after two years of ownership?  Suppose Apple releases iPhone 3.0 after two years of ownership or for reasons related to accounting, will I, as a first generation owner be forced pay up for the upgrade costs?
If so, it'll be interesting to see how Apple is able to make the distinction between those who own their first generation iPhone for two years versus someone like me who will have owned it for 14 months if Apple does release version 3.0 in June of 2009.  
Come on, let's not kid ourselves.  Apple is out to make great products we all love.  They are also out to make money as well.  At time point, iPhone upgrades will cease to work for early adopters or they will be forced to pay for upgrades.  At some point, upgrade fees will be irrelevant because upgrades will require newer hardware.  
That day will come.  It's just a matter how Apple will handle this.  What do you think?

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