My first reaction was: "Apple is being their typican money grubbing selves." But when I actually got over my initial reaction, I think it is a fair price. Apple charges a very low price for their OS compared to Microsoft. Snow Leopard was $129. Microsoft will charge three times that amount for an inferior product. $0.99 for an add-on to an older OS is very reaonable.
I used iChat and also FaceTime. When FaceTime first came out in beta, I wondered why since they had iChat. More money, I thought. I was right.
iChat is a much more powerful program. I've used iChat to help a couple of friends with their computer problems. With iChat, I can take control of their machines. FaceTime does not allow that, at least the beta doesn't. iChat was a novelty that also was very useful. FaceTime is a novelty.
Well I hope it's better than the beta, which showed all my contacts regardless of whether they have any kind of FT access. At least iChat makes it clear who is there and what kind of connection is possible - that to me is much simpler.
More accurate, perhaps, but think if Facetime as what Apple sell it as, videocalling. It's like the phone. You have no idea if they are available to answer before placing a call, and it does one thing, but does it well, which is video - should the other person answer!
iChat is quite a complex thing in comparison to a phone. It does text chatting, audio, video, file sharing, screen sharing, status notifications, availability indications - might sound as clear as day to you or I, but when I gave my brother my old Macbook last month (he's not much for computers other than using Facebook...) he hadn't got a clue what had happened when after waking it up from sleep the first thing he got an iChat dialogue box asking if now that he's back he should set his status to "available" - it still confuses the hell out of him, and the only reason he runs it all the time is because it's what I use to screenshare when he messes something up, and it's better to have it running all the while rather than asking him to find it and start it manually each time he needs it (he really is that dumb, but a lot of users are).
Just chat, just 2 participants at a time. Nothing else, no screen sharing/conferencing/text messaging/photo-booth file/picture sharing/chat logging/video session recording etc etc.
*but*, it is incredibly simple and doesn;t require you to be signed into anything for it to work, and will "call" you on all your Macs/phones whatever for more chance of being able to take a call.
iChat is better featured, Facetime is simpler and takes away a layer of abstraction like accounts/logins/status/friends lists as well as features. I like them both, use them differently, although I would like to see an option to "wrap" Facetime into iChat for those who want to, but I can't see it happening.
Very nice summary. Well said, showing there are legitimate reasons for both.
Gnashing of teeth over 99 cents?! Seriously? I mean, 99 cents? People have just become too used to free, I guess. I seriously doubt anyone who can afford a device/connection that allows them to log into this forum would ever notice a dollar missing from their pocket. So consider yourselves 1 cent ahead of the game. Or maybe you object to the principle. There's always that.
WTF? Congress did away with Sarbannes-Oxley accounting a year or so ago, and Apple has already switched over to the new accounting method. That's why they now offer free firmware upgrades to iPod Touch users. Your update doesn't make sense!?!
It's irks me they're charging for facetime. I ain't paying. Will wait till Lion, or when i buy a new Mac, whichever comes first.
Also, if Sarbannes-Oxley were the reason for the 99¢ charge, how could they offer the beta for free? Something just doesn't jive here. I'm calling BS on this one.
This was posted over on MacRumors on a similar thread...hop on over there for a really good discussion on this issue with a few CPA's involved who actually know what they're talking about:
"I'll preface this saying I am a CPA, I work in Big 4 Public Accounting on audits of public, multi-million to billion dollar companies.
All PUBLIC companies, aka listed on a stock exchange where any one can buy a share of, are subject to the requirements of the Sarbanes - Oxley act. It was passed following the frauds perpetuated at Enron, Worldcom, etc. And mainly focuses around the Internal Control requirements that companies must abide by, along with the rules that public accountants must follow in their audits of these companies. Sarbanes-Oxley also created the public accountants best friend, the Public Company Accounting Oversight Board, or the PCAOB. They issue auditing standards which public accounting firms must abide by, among other things. They also perform reviews of the work performed and do a bunch of other stuff only accountants would understand. Think of them as the watchdog entity.
Now, the issue Apple is running into here is derived from US GAAP standards (Generally Accepted Accounting Principles). These rules basically establish how things should be accounted for at public companies and create comparable financial statements (so that an investor can say ok this company has $XXX in assets/liabilities/income etc. and can be compared to this company with $YYY in assets/liabilities/income etc. with confidence that the numbers are derived using the same rules). Every public company is required to get the opinion of a public accounting firm that the financial statements are fairly stated and in accordance with US GAAP, in all material respects. This is my job (one which I am in the middle of our busiest time of year doing).
The accounting standard causing the $0.99 charge from Apple for Facetime is focused around Revenue Recognition. I imagine what Steve was referring to was a change in how Apple was accounting for revenue related to ipods/iphones, one that DID NOT carry over to Macbooks. Basically when a company sells you a product, they recognize revenue at the time of sale. However, if that product has a certain life to it (say software licenses of one year), then the company is required to recognize revenue over the life of the product. For ipods I assume they are carving out a piece of the revenue, tossing it up on the balance sheet as deferred revenue and slowing amortizing (recognizing) the revenue over a set period. If I felt like it I could probably get into their yearend 10-K filing and see the method they are using.
The difference for the Macbooks is that if they've already recognized the revenue related to those sales, but this is representing a significant additional feature, they'd have to go back and say, here is the revenue that matches to this feature (I don't know the particulars in this industry as I have never worked on an audit of a Company like Apple - mainly in Utilities). It is because of the "matching" principle of accounting. Revenues and expenses must be matched to the period and sales for which they relate. Now, in order to get around this, Apple charges $0.99 for the new feature, accounts for the revenue in the current period and is not required to restate prior periods (this is a VERY big deal and would not be something they'd want to do).
Hopefully that makes sense. I had to clear this up because all the BS people were trying to spew was factually wrong. Yes Sarbanes was amended in 2010 and it resulted in the ability for companies to change some accounting policies, but if they didn't switch it for macbooks, then they are SOL."
Holy crap. A buck?! People are getting their panties in a wad over a BUCK?! How much did you spend on coffee this morning? The vending machine at work? The parking meter?
It's 1/3 the cost of one gallon of gas!
If a buck is going to break you, how on Earth did you afford a Mac?
WTF? Congress did away with Sarbannes-Oxley accounting a year or so ago, and Apple has already switched over to the new accounting method. That's why they now offer free firmware upgrades to iPod Touch users. Your update doesn't make sense!?!.
You're thinking of the subscription-based accounting for the iPhone where the income for the iPhone was spread over 24 months.
Holy crap. A buck?! People are getting their panties in a wad over a BUCK?! How much did you spend on coffee this morning? The vending machine at work? The parking meter?
It's 1/3 the cost of one gallon of gas!
If a buck is going to break you, how on Earth did you afford a Mac?
For me, it was more of an issue of the precedent it could potentially be setting. HOWEVER, after hearing some actual accounting reasoning on this, there may actually be a legit reason that they're charing $0.99 for it. I don't have an issue paying for something that I feel is worth the value. I do agree $0.99 is nothing, but at the same time, I'll just continue to use Skype for my needs. I've used the beta FaceTime on my Mac in the last few months, and I haven't really been that pleased with it. Of course, it was just the beta version. Chat functionality would be a great value-added feature for me.
The 99 cent fee has been confirmed to be a result of regulatory fees associated with software updates. The situation is similar to when Apple charged a fee for users to unlock 802.11n functionality with a software update years ago. The Sarbannes-Oxley Act requires that companies charge for significant features added to already-purchased products.
Greed, unadulterated greed will be the downfall of Apple inc.
Don't you find it a little bit convenient that Apple should invoke the Sarbannes-Oxley Act as an excuse to do exactly what it likes to do: squeeze every penny out of Mac and iPhone buyers?
$0.99 for a little app like FaceTime. What does Google charge for Android and its updates?
I have Skype on all my Macs and iOS devices, which is free, thank you. And Skype would suit me just as well as FaceTime, except for the ring-in-the-background feature, which I suspect Apple won't open to third party developers as long as FaceTime is generating good revenue at $0.99 a pop.
Now, the issue Apple is running into here is derived from US GAAP standards (Generally Accepted Accounting Principles)?
The difference for the Macbooks is that if they've already recognized the revenue related to those sales, but this is representing a significant additional feature, they'd have to go back and say, here is the revenue that matches to this feature (I don't know the particulars in this industry as I have never worked on an audit of a Company like Apple - mainly in Utilities). It is because of the "matching" principle of accounting. Revenues and expenses must be matched to the period and sales for which they relate. Now, in order to get around this, Apple charges $0.99 for the new feature, accounts for the revenue in the current period and is not required to restate prior periods (this is a VERY big deal and would not be something they'd want to do)?
Ah yes, i misspoke when i said Sarbannes-Oxley? should have said GAAP (as a result of Sarbannes-Oxley). Your explanation, unfortunately, sounds about right.
Quote:
Originally Posted by jbruni
You're thinking of the subscription-based accounting for the iPhone where the income for the iPhone was spread over 24 months.
Which was a result of the GAAP in effect at the time because of the Sarbannes-Oxley Act. The GAAP was changed, and Apple changed their method of accounting as a result. (Apple was one of the petitioners for the change.)
Quote:
Originally Posted by Unicron
Holy crap. A buck?! People are getting their panties in a wad over a BUCK?! How much did you spend on coffee this morning? The vending machine at work? The parking meter?
It's 1/3 the cost of one gallon of gas!
If a buck is going to break you, how on Earth did you afford a Mac?
I can afford my Mac because i don't waste $$$ on coffee, in vending machines, parking meters, or buying gas. I ride a bicycle (so i also don't waste $$$ on gym memberships or doctor visits either).
Quote:
Originally Posted by ouragan
Greed, unadulterated greed will be the downfall of Apple inc.
Don't you find it a little bit convenient that Apple should invoke the Sarbannes-Oxley Act as an excuse to do exactly what it likes to do: squeeze every penny out of Mac and iPhone buyers?
That was my reaction too, but apple4life07 does explain it in such a way as to be likely the reason for the charge. So i'm less irate now.
Even so, i don't find FaceTime on my Mac so essential that i can't wait until Mac OS Lion, where i presume it'll be incorporated as part of the upgrade price.
That'll be 99¢ i can apply to either the upgrade, or a new Mac.
That was my reaction too, but apple4life07 does explain it in such a way as to be likely the reason for the charge. So i'm less irate now.
I can't take credit for my post. It was posted by a user named benson304 on MacRumors. It and subsequent posts help form a very good explanation of why this most likely is going on. I don't have an accounting background, but thankfully some CPA's at a few of the Big 4 chimed in on the matter.
This was posted over on MacRumors on a similar thread...hop on over there for a really good discussion on this issue with a few CPA's involved who actually know what they're talking about:
"I'll preface this saying I am a CPA, I work in Big 4 Public Accounting on audits of public, multi-million to billion dollar ...."
none of that actually says a company has to charge for anything.
none of that actually says a company has to charge for anything.
Go over to MacRumors and start on page 6 or so. There is plenty more explanation as to why they do have to charge for it from qualified individuals. I don't have the accounting understanding to re-explain it, unfortunately.
Comments
I used iChat and also FaceTime. When FaceTime first came out in beta, I wondered why since they had iChat. More money, I thought. I was right.
iChat is a much more powerful program. I've used iChat to help a couple of friends with their computer problems. With iChat, I can take control of their machines. FaceTime does not allow that, at least the beta doesn't. iChat was a novelty that also was very useful. FaceTime is a novelty.
All-in-all, I like FaceTime and will purchase it.
Well I hope it's better than the beta, which showed all my contacts regardless of whether they have any kind of FT access. At least iChat makes it clear who is there and what kind of connection is possible - that to me is much simpler.
More accurate, perhaps, but think if Facetime as what Apple sell it as, videocalling. It's like the phone. You have no idea if they are available to answer before placing a call, and it does one thing, but does it well, which is video - should the other person answer!
iChat is quite a complex thing in comparison to a phone. It does text chatting, audio, video, file sharing, screen sharing, status notifications, availability indications - might sound as clear as day to you or I, but when I gave my brother my old Macbook last month (he's not much for computers other than using Facebook...) he hadn't got a clue what had happened when after waking it up from sleep the first thing he got an iChat dialogue box asking if now that he's back he should set his status to "available" - it still confuses the hell out of him, and the only reason he runs it all the time is because it's what I use to screenshare when he messes something up, and it's better to have it running all the while rather than asking him to find it and start it manually each time he needs it (he really is that dumb, but a lot of users are).
Just chat, just 2 participants at a time. Nothing else, no screen sharing/conferencing/text messaging/photo-booth file/picture sharing/chat logging/video session recording etc etc.
*but*, it is incredibly simple and doesn;t require you to be signed into anything for it to work, and will "call" you on all your Macs/phones whatever for more chance of being able to take a call.
iChat is better featured, Facetime is simpler and takes away a layer of abstraction like accounts/logins/status/friends lists as well as features. I like them both, use them differently, although I would like to see an option to "wrap" Facetime into iChat for those who want to, but I can't see it happening.
Very nice summary. Well said, showing there are legitimate reasons for both.
Best way to make facetime even more of a novelty? Gets me a bit nervous about what else they might start charging for.
Didn't take liong to hear from the "free-tard" crowd did it.
(unless you're a frackin' cheapskate.)
+1
Agreed.
Make that +2
It's irks me they're charging for facetime. I ain't paying. Will wait till Lion, or when i buy a new Mac, whichever comes first.
Also, if Sarbannes-Oxley were the reason for the 99¢ charge, how could they offer the beta for free? Something just doesn't jive here. I'm calling BS on this one.
"I'll preface this saying I am a CPA, I work in Big 4 Public Accounting on audits of public, multi-million to billion dollar companies.
All PUBLIC companies, aka listed on a stock exchange where any one can buy a share of, are subject to the requirements of the Sarbanes - Oxley act. It was passed following the frauds perpetuated at Enron, Worldcom, etc. And mainly focuses around the Internal Control requirements that companies must abide by, along with the rules that public accountants must follow in their audits of these companies. Sarbanes-Oxley also created the public accountants best friend, the Public Company Accounting Oversight Board, or the PCAOB. They issue auditing standards which public accounting firms must abide by, among other things. They also perform reviews of the work performed and do a bunch of other stuff only accountants would understand. Think of them as the watchdog entity.
Now, the issue Apple is running into here is derived from US GAAP standards (Generally Accepted Accounting Principles). These rules basically establish how things should be accounted for at public companies and create comparable financial statements (so that an investor can say ok this company has $XXX in assets/liabilities/income etc. and can be compared to this company with $YYY in assets/liabilities/income etc. with confidence that the numbers are derived using the same rules). Every public company is required to get the opinion of a public accounting firm that the financial statements are fairly stated and in accordance with US GAAP, in all material respects. This is my job (one which I am in the middle of our busiest time of year doing).
The accounting standard causing the $0.99 charge from Apple for Facetime is focused around Revenue Recognition. I imagine what Steve was referring to was a change in how Apple was accounting for revenue related to ipods/iphones, one that DID NOT carry over to Macbooks. Basically when a company sells you a product, they recognize revenue at the time of sale. However, if that product has a certain life to it (say software licenses of one year), then the company is required to recognize revenue over the life of the product. For ipods I assume they are carving out a piece of the revenue, tossing it up on the balance sheet as deferred revenue and slowing amortizing (recognizing) the revenue over a set period. If I felt like it I could probably get into their yearend 10-K filing and see the method they are using.
The difference for the Macbooks is that if they've already recognized the revenue related to those sales, but this is representing a significant additional feature, they'd have to go back and say, here is the revenue that matches to this feature (I don't know the particulars in this industry as I have never worked on an audit of a Company like Apple - mainly in Utilities). It is because of the "matching" principle of accounting. Revenues and expenses must be matched to the period and sales for which they relate. Now, in order to get around this, Apple charges $0.99 for the new feature, accounts for the revenue in the current period and is not required to restate prior periods (this is a VERY big deal and would not be something they'd want to do).
Hopefully that makes sense. I had to clear this up because all the BS people were trying to spew was factually wrong. Yes Sarbanes was amended in 2010 and it resulted in the ability for companies to change some accounting policies, but if they didn't switch it for macbooks, then they are SOL."
It's 1/3 the cost of one gallon of gas!
If a buck is going to break you, how on Earth did you afford a Mac?
WTF? Congress did away with Sarbannes-Oxley accounting a year or so ago, and Apple has already switched over to the new accounting method. That's why they now offer free firmware upgrades to iPod Touch users. Your update doesn't make sense!?!.
You're thinking of the subscription-based accounting for the iPhone where the income for the iPhone was spread over 24 months.
Holy crap. A buck?! People are getting their panties in a wad over a BUCK?! How much did you spend on coffee this morning? The vending machine at work? The parking meter?
It's 1/3 the cost of one gallon of gas!
If a buck is going to break you, how on Earth did you afford a Mac?
For me, it was more of an issue of the precedent it could potentially be setting. HOWEVER, after hearing some actual accounting reasoning on this, there may actually be a legit reason that they're charing $0.99 for it. I don't have an issue paying for something that I feel is worth the value. I do agree $0.99 is nothing, but at the same time, I'll just continue to use Skype for my needs. I've used the beta FaceTime on my Mac in the last few months, and I haven't really been that pleased with it. Of course, it was just the beta version. Chat functionality would be a great value-added feature for me.
The 99 cent fee has been confirmed to be a result of regulatory fees associated with software updates. The situation is similar to when Apple charged a fee for users to unlock 802.11n functionality with a software update years ago. The Sarbannes-Oxley Act requires that companies charge for significant features added to already-purchased products.
Greed, unadulterated greed will be the downfall of Apple inc.
Don't you find it a little bit convenient that Apple should invoke the Sarbannes-Oxley Act as an excuse to do exactly what it likes to do: squeeze every penny out of Mac and iPhone buyers?
I have Skype on all my Macs and iOS devices, which is free, thank you. And Skype would suit me just as well as FaceTime, except for the ring-in-the-background feature, which I suspect Apple won't open to third party developers as long as FaceTime is generating good revenue at $0.99 a pop.
Now, the issue Apple is running into here is derived from US GAAP standards (Generally Accepted Accounting Principles)?
The difference for the Macbooks is that if they've already recognized the revenue related to those sales, but this is representing a significant additional feature, they'd have to go back and say, here is the revenue that matches to this feature (I don't know the particulars in this industry as I have never worked on an audit of a Company like Apple - mainly in Utilities). It is because of the "matching" principle of accounting. Revenues and expenses must be matched to the period and sales for which they relate. Now, in order to get around this, Apple charges $0.99 for the new feature, accounts for the revenue in the current period and is not required to restate prior periods (this is a VERY big deal and would not be something they'd want to do)?
Ah yes, i misspoke when i said Sarbannes-Oxley? should have said GAAP (as a result of Sarbannes-Oxley). Your explanation, unfortunately, sounds about right.
You're thinking of the subscription-based accounting for the iPhone where the income for the iPhone was spread over 24 months.
Which was a result of the GAAP in effect at the time because of the Sarbannes-Oxley Act. The GAAP was changed, and Apple changed their method of accounting as a result. (Apple was one of the petitioners for the change.)
Holy crap. A buck?! People are getting their panties in a wad over a BUCK?! How much did you spend on coffee this morning? The vending machine at work? The parking meter?
It's 1/3 the cost of one gallon of gas!
If a buck is going to break you, how on Earth did you afford a Mac?
I can afford my Mac because i don't waste $$$ on coffee, in vending machines, parking meters, or buying gas. I ride a bicycle (so i also don't waste $$$ on gym memberships or doctor visits either).
Greed, unadulterated greed will be the downfall of Apple inc.
Don't you find it a little bit convenient that Apple should invoke the Sarbannes-Oxley Act as an excuse to do exactly what it likes to do: squeeze every penny out of Mac and iPhone buyers?
That was my reaction too, but apple4life07 does explain it in such a way as to be likely the reason for the charge. So i'm less irate now.
Even so, i don't find FaceTime on my Mac so essential that i can't wait until Mac OS Lion, where i presume it'll be incorporated as part of the upgrade price.
That'll be 99¢ i can apply to either the upgrade, or a new Mac.
That was my reaction too, but apple4life07 does explain it in such a way as to be likely the reason for the charge. So i'm less irate now.
I can't take credit for my post.
This was posted over on MacRumors on a similar thread...hop on over there for a really good discussion on this issue with a few CPA's involved who actually know what they're talking about:
"I'll preface this saying I am a CPA, I work in Big 4 Public Accounting on audits of public, multi-million to billion dollar ...."
none of that actually says a company has to charge for anything.
none of that actually says a company has to charge for anything.
Go over to MacRumors and start on page 6 or so. There is plenty more explanation as to why they do have to charge for it from qualified individuals. I don't have the accounting understanding to re-explain it, unfortunately.