eAi: i'm pretty sure that was announced 7 months ago, and delivered later than promised. i'm also pretty sure it was in customers hands less than one week before the end of the Q1. i don't think that apple TV had jack shite to do with the profits.
i miss the times when apple made computers that graphic designers like myself were interested in - not that i'm not going to buy an iPhone, but i don't care about iTV/appleTV. i finally trashed my 6 year-old 10 gig tivo and got my comcrap motorola dvr - and it can record at 1080i, and i can even turn down the volume from my remote. why would i get appleTV?
and JeffDM - what about HD DVD/Blu Ray drives, upgraded ram, graphics cards?
Oh, forgot to say that desktop sales are still seriously underwhelming whilst portable sales are rocketing. I think they said near the beginning of the conference call that laptop units grew at 79% year-over-year!! When are Apple going to get with the program with desktops?
Desktop sales are rising. Just not nearly to that of laptops.
Seeing as how the iMac hasn't had a bump in a while it's not surprising that the new Mac Pro isn't making up the difference.
I don't think so. I think this is probably related to the same accounting guidance that caused Apple to charge for the 802.11n software update.
This probably Means Apple is building in hardware support for certain functionality that will not be supported in software at product launch. And that a software update will expose these significant new capabilities. If the earnings are planned to be stated in sync with the software updates, Apple doesn't have to take odd tax charges or charge customers for the software updates.
ATT/Cingular told analysts yesterday on CNBC that they have already surpassed a million sale orders for the iPhone; and between 60% - 70% are new accounts.
Rentals would be an additional sale for the iTunes Music Store, not for the AppleTV line item. Revenues for rentals would be recognized the same way that movie and music sales are recognized: at the time of rental/purchase.
The revenue recognition over a longer period of time actually has to do with some accounting rules. You cannot recognize all revenue for a widget up front, if you are going to add significant new functionality to that sold widget further down the line.The rules state that if you are going to continue to add functionality via software or firmware updates, you need to recognize the revenue in smaller chunks over a longer period of time. This is the reason that they had to make people pay the $1.99 for the 802.11n upgrade - they added significant new functionality and/or utility that was not there before. They charged the $1.99 because they had to - it likely cost them more than that just to set up the accounting system to track all of those $1.99 purchases. So the move to this accounting method for AppleTV and the iPhone simply means that they intend to add new features in the future (as he stated in the phone call).
They do the same thing with OS X, Microsoft does the same thing with Windows, many other software companies (Adobe among them) recognize revenue over a longer period of time.
I don't wish to get into a flame war over this, but I do think this calls for some points of clarification. Currently, Apple does not segregate net sales by product when it comes to iTunes and Apple TV. It is aggregated under a single line item "Other music related products and services." So for financial statment purposes, these will appear together. I'll get to this point in a second...
Regarding your interpretation of GAAP: The principle to which you are referring has to do with the recognition of revenue. A seller must defer recognition of revenue until the buyer got everything for which s/he bargained. I won't get into the guts of it because it will likely cause Appleinsider readers to fall asleep en masse, but suffice it to say, the rules do not dictate whether or not you charge for a particular functionality, it simply states how you must account for it. The short of it is, Apple's "rationale" for chargine the $1.99 was rather suspect (Google it and you'll find a surprisingly large amount of commentary on this).
Now getting back to my speculation... and it was just that, speculation -- The Street tends to prefer a smoother, predictible, line for revenue/profits and providing for accounting treatment in this fashion serves to "spread the wealth", so to speak, over a longer period of time, and allow, for accounting purposes, to match related revenue with appropriate expenses. Now marry the usual razors/blades analogy with a subscription-based rental service and you can see where I was going. Bottom line is they are doing this because it is a favorable for them to take this accounting position -- not because it is compelled to do so -- and this is served best with something extra to bolster it's rationale above and beyond that which they used with the 802.11n debacle and that which they shared on the call.
I'm just merely HOPING with the rest of the Apple TV owners out there that the HDMI connection is there for more than just movie trailers... and I think it's more fun to do so by trying to read between the lines.
I don't wish to get into a flame war over this, but I do think this calls for some points of clarification. Currently, Apple does not segregate net sales by product when it comes to iTunes and Apple TV. It is aggregated under a single line item "Other music related products and services." So for financial statment purposes, these will appear together. I'll get to this point in a second...
Regarding your interpretation of GAAP: The principle to which you are referring has to do with the recognition of revenue. A seller must defer recognition of revenue until the buyer got everything for which s/he bargained. I won't get into the guts of it because it will likely cause Appleinsider readers to fall asleep en masse, but suffice it to say, the rules do not dictate whether or not you charge for a particular functionality, it simply states how you must account for it. The short of it is, Apple's "rationale" for chargine the $1.99 was rather suspect (Google it and you'll find a surprisingly large amount of commentary on this).
Now getting back to my speculation... and it was just that, speculation -- The Street tends to prefer a smoother, predictible, line for revenue/profits and providing for accounting treatment in this fashion serves to "spread the wealth", so to speak, over a longer period of time, and allow, for accounting purposes, to match related revenue with appropriate expenses. Now marry the usual razors/blades analogy with a subscription-based rental service and you can see where I was going. Bottom line is they are doing this because it is a favorable for them to take this accounting position -- not because it is compelled to do so -- and this is served best with something extra to bolster it's rationale above and beyond that which they used with the 802.11n debacle and that which they shared on the call.
I'm just merely HOPING with the rest of the Apple TV owners out there that the HDMI connection is there for more than just movie trailers... and I think it's more fun to do so by trying to read between the lines.
Maybe not. Nokia and Motorola et al already get their cash in the form of up-front subsidies. There's probably not a huge difference there at the end of the day.
What might be important is that Apple will have an incentive to keep us using the iPhone, whereas other manufacturers just want us to replace our handsets as often as possible.
Which fits well with the idea of a flexible interface and software updates rather than new hardware all the time.
Get the iPhone strategy yet?
Ask a CFO if they want to take a lump sum now, or a reliable flow over the course of a longer period, s/he will always choose the latter. I could be wrong... it certainly wouldn't be the first time I don't think Apple would mind in the least if people upgraded their iPhone each year with a new iPhone, nor do I think that Nokia and Motorlola would deny an opportunity to get a reliable, predictible monthly cash flow each month over the span of 2 years... an option that was inconceivable in the pre-iPhone era. As for the subsidies they get, in some respects, at least for Motorola, it was a driving factor in the Razr's plummet to earth, in that they (Motorola) lost the ability to control the perceived market value of their product.
Don't get too over-excited at the quote. This is the standard boilerplate uttered at every conference call and keynote. Yes, they are really working on cool stuff, but the statement itself isn't anything new.
and are also hard at work on some other amazing new products in our pipeline."
I beg to differ Hiro. Apple doesn't throw stuff like this around as standard boilerplate. And it is certainly not uttered at every conference call and keynote. There is something here. I think it's either Wi-Fi iPod which they must know everyone already knows about OR tablet PC like Axion's(?) with multi-touch.
I beg to differ Hiro. Apple doesn't throw stuff like this around as standard boilerplate. And it is certainly not uttered at every conference call and keynote. There is something here. I think it's either Wi-Fi iPod which they must know everyone already knows about OR tablet PC like Axion's(?) with multi-touch.
Regards
Um, no. Hiro is right. Apple say this, or something, very, very similar at pretty much every conference call/earnings release, and Jobs often says it during keynotes.
And there's always at least one AI person who picks up the quote and goes "OMG !!11!!! Apple are working on "amazing new products", what could they be??? Brain-implanted iPods with 100 TB storage??? OMG!!"
I beg to differ Hiro. Apple doesn't throw stuff like this around as standard boilerplate. And it is certainly not uttered at every conference call and keynote.
iPhone question - During the call Peter O said that customers will benefit from free "software updates...". Could this mean that certain 3G features, especially the MUCH NEEDED upgrade from EDGE io HSDPA could be upgraded, like firmware? Is this kind of upgrade possible? Or would different hardware be necessary in the phone to support UMTS/HSDPA?
Those are hardware updates. Even though, like with the 802.11 card in Macs was enabled by a firmware update, it's still hardware update. Beyond that, the 1G iPhone probably won't have HSDPA hardware in it, making a firmware update impossible.
Apple Conference Call Transcript F4Q05: "We remain very enthusiastic about our product pipeline and we will have?"
Apple Conference Call Transcript F1Q06: "We remain extremely enthusiastic about our innovative product pipeline?"
Apple Conference Call Transcript F2Q06: "? and are excited about what we have in the product pipeline?"
Apple Conference Call Transcript F3Q06: "We remain very confident and excited about the products in our pipeline."
Apple Conference Call Transcript F4Q06: "? to innovation and we are very enthusiastic about our product pipeline.?"
Um, just one little word missing there that separates today's line from those previous lines quote.
NEW
Apple has never said anything like this before. And, like I said before, there is something NEW coming. Now, it could be WI-FI iPhone like iPod, without iPhone which is really not NEW to us. Or it could be something completely different. I think something off the radar iis coming.
and are also hard at work on some other amazing new products in our pipeline
Oh, forgot to say that desktop sales are still seriously underwhelming whilst portable sales are rocketing. I think they said near the beginning of the conference call that laptop units grew at 79% year-over-year!! When are Apple going to get with the program with desktops?
Perhaps it is just because the laptops can do everything that most people need to do. And in this highly mobile world, they can take it with them.
They were mostly right, but it's business as usual. I expect Oppenheimer to say this sort of thing every single time. It's a signature line, like Wolverine's "I'm the best at what I do."
At the WWDC 05 Jobs also said "But as we look ahead, and though we?ve got great products now, and great PowerPC products still to come?" The PowerPC products still to come were nothing special, just good computers with PPC chips.
Perhaps it is just because the laptops can do everything that most people need to do. And in this highly mobile world, they can take it with them.
Desktops are still a very large chunk of Apple's Mac sales, though. They'd be foolish to not be as competitive there as they are in notebooks. They need some refreshes there, stat, plus, yep, a minitower. Flame me if you like, I think anyone who's acquainted with my posting style knows I just don't give a frak. Check my sig.
They were mostly right, but it's business as usual. I expect Oppenheimer to say this sort of thing every single time. It's a signature line, like Wolverine's "I'm the best at what I do."
At the WWDC 05 Jobs also said "But as we look ahead, and though we’ve got great products now, and great PowerPC products still to come…" The PowerPC products still to come were nothing special, just good computers with PPC chips.
And look what followed.
Interesting that the most innovative company in the world still can't get its due recognition without some yahoo tossing in some idiotic comment. In the five quotes, everyone of them was absolutely correct. And I defy any other company that could make those statements over the past two years and come close to what Apple has developed.
ATT/Cingular told analysts yesterday on CNBC that they have already surpassed a million sale orders for the iPhone; and between 60% - 70% are new accounts.
I don't believe they were sales orders, just inquiries, and an interest in being notified when they were out.
All that could mean is that people want to go down to the store and play with it for a while before they decide.
I don't wish to get into a flame war over this, but I do think this calls for some points of clarification. Currently, Apple does not segregate net sales by product when it comes to iTunes and Apple TV. It is aggregated under a single line item "Other music related products and services." So for financial statment purposes, these will appear together. I'll get to this point in a second...
Regarding your interpretation of GAAP: The principle to which you are referring has to do with the recognition of revenue. A seller must defer recognition of revenue until the buyer got everything for which s/he bargained. I won't get into the guts of it because it will likely cause Appleinsider readers to fall asleep en masse, but suffice it to say, the rules do not dictate whether or not you charge for a particular functionality, it simply states how you must account for it. The short of it is, Apple's "rationale" for chargine the $1.99 was rather suspect (Google it and you'll find a surprisingly large amount of commentary on this).
Now getting back to my speculation... and it was just that, speculation -- The Street tends to prefer a smoother, predictible, line for revenue/profits and providing for accounting treatment in this fashion serves to "spread the wealth", so to speak, over a longer period of time, and allow, for accounting purposes, to match related revenue with appropriate expenses. Now marry the usual razors/blades analogy with a subscription-based rental service and you can see where I was going. Bottom line is they are doing this because it is a favorable for them to take this accounting position -- not because it is compelled to do so -- and this is served best with something extra to bolster it's rationale above and beyond that which they used with the 802.11n debacle and that which they shared on the call.
I'm just merely HOPING with the rest of the Apple TV owners out there that the HDMI connection is there for more than just movie trailers... and I think it's more fun to do so by trying to read between the lines.
We've discussed this before, but people forget, or weren't there.
It's a good explanation, keep it on hand. You may need it again.
Ask a CFO if they want to take a lump sum now, or a reliable flow over the course of a longer period, s/he will always choose the latter. I could be wrong... it certainly wouldn't be the first time I don't think Apple would mind in the least if people upgraded their iPhone each year with a new iPhone, nor do I think that Nokia and Motorlola would deny an opportunity to get a reliable, predictible monthly cash flow each month over the span of 2 years... an option that was inconceivable in the pre-iPhone era. As for the subsidies they get, in some respects, at least for Motorola, it was a driving factor in the Razr's plummet to earth, in that they (Motorola) lost the ability to control the perceived market value of their product.
Moto and partners were too eager to get the Razr product line into more hands. The only was to cheapen it.
A friend had bragged how he and his wife had just gotten them, but the price had already dropped by half by the time he told me.
Comments
Like the Apple TV?
eAi: i'm pretty sure that was announced 7 months ago, and delivered later than promised. i'm also pretty sure it was in customers hands less than one week before the end of the Q1. i don't think that apple TV had jack shite to do with the profits.
i miss the times when apple made computers that graphic designers like myself were interested in - not that i'm not going to buy an iPhone, but i don't care about iTV/appleTV. i finally trashed my 6 year-old 10 gig tivo and got my comcrap motorola dvr - and it can record at 1080i, and i can even turn down the volume from my remote. why would i get appleTV?
and JeffDM - what about HD DVD/Blu Ray drives, upgraded ram, graphics cards?
Oh, forgot to say that desktop sales are still seriously underwhelming whilst portable sales are rocketing. I think they said near the beginning of the conference call that laptop units grew at 79% year-over-year!! When are Apple going to get with the program with desktops?
Desktop sales are rising. Just not nearly to that of laptops.
Seeing as how the iMac hasn't had a bump in a while it's not surprising that the new Mac Pro isn't making up the difference.
Mac Mini is due for a bump.
What's interesting from this: http://images.apple.com/pr/pdf/q207data_sum.pdf
is that the greater of their revenue still comes from the Desktop/Laptop lines.
I don't think so. I think this is probably related to the same accounting guidance that caused Apple to charge for the 802.11n software update.
This probably Means Apple is building in hardware support for certain functionality that will not be supported in software at product launch. And that a software update will expose these significant new capabilities. If the earnings are planned to be stated in sync with the software updates, Apple doesn't have to take odd tax charges or charge customers for the software updates.
ATT/Cingular told analysts yesterday on CNBC that they have already surpassed a million sale orders for the iPhone; and between 60% - 70% are new accounts.
Rentals would be an additional sale for the iTunes Music Store, not for the AppleTV line item. Revenues for rentals would be recognized the same way that movie and music sales are recognized: at the time of rental/purchase.
The revenue recognition over a longer period of time actually has to do with some accounting rules. You cannot recognize all revenue for a widget up front, if you are going to add significant new functionality to that sold widget further down the line.The rules state that if you are going to continue to add functionality via software or firmware updates, you need to recognize the revenue in smaller chunks over a longer period of time. This is the reason that they had to make people pay the $1.99 for the 802.11n upgrade - they added significant new functionality and/or utility that was not there before. They charged the $1.99 because they had to - it likely cost them more than that just to set up the accounting system to track all of those $1.99 purchases. So the move to this accounting method for AppleTV and the iPhone simply means that they intend to add new features in the future (as he stated in the phone call).
They do the same thing with OS X, Microsoft does the same thing with Windows, many other software companies (Adobe among them) recognize revenue over a longer period of time.
I don't wish to get into a flame war over this, but I do think this calls for some points of clarification. Currently, Apple does not segregate net sales by product when it comes to iTunes and Apple TV. It is aggregated under a single line item "Other music related products and services." So for financial statment purposes, these will appear together. I'll get to this point in a second...
Regarding your interpretation of GAAP: The principle to which you are referring has to do with the recognition of revenue. A seller must defer recognition of revenue until the buyer got everything for which s/he bargained. I won't get into the guts of it because it will likely cause Appleinsider readers to fall asleep en masse, but suffice it to say, the rules do not dictate whether or not you charge for a particular functionality, it simply states how you must account for it. The short of it is, Apple's "rationale" for chargine the $1.99 was rather suspect (Google it and you'll find a surprisingly large amount of commentary on this).
Now getting back to my speculation... and it was just that, speculation -- The Street tends to prefer a smoother, predictible, line for revenue/profits and providing for accounting treatment in this fashion serves to "spread the wealth", so to speak, over a longer period of time, and allow, for accounting purposes, to match related revenue with appropriate expenses. Now marry the usual razors/blades analogy with a subscription-based rental service and you can see where I was going. Bottom line is they are doing this because it is a favorable for them to take this accounting position -- not because it is compelled to do so -- and this is served best with something extra to bolster it's rationale above and beyond that which they used with the 802.11n debacle and that which they shared on the call.
I'm just merely HOPING with the rest of the Apple TV owners out there that the HDMI connection is there for more than just movie trailers... and I think it's more fun to do so by trying to read between the lines.
I don't wish to get into a flame war over this, but I do think this calls for some points of clarification. Currently, Apple does not segregate net sales by product when it comes to iTunes and Apple TV. It is aggregated under a single line item "Other music related products and services." So for financial statment purposes, these will appear together. I'll get to this point in a second...
Regarding your interpretation of GAAP: The principle to which you are referring has to do with the recognition of revenue. A seller must defer recognition of revenue until the buyer got everything for which s/he bargained. I won't get into the guts of it because it will likely cause Appleinsider readers to fall asleep en masse, but suffice it to say, the rules do not dictate whether or not you charge for a particular functionality, it simply states how you must account for it. The short of it is, Apple's "rationale" for chargine the $1.99 was rather suspect (Google it and you'll find a surprisingly large amount of commentary on this).
Now getting back to my speculation... and it was just that, speculation -- The Street tends to prefer a smoother, predictible, line for revenue/profits and providing for accounting treatment in this fashion serves to "spread the wealth", so to speak, over a longer period of time, and allow, for accounting purposes, to match related revenue with appropriate expenses. Now marry the usual razors/blades analogy with a subscription-based rental service and you can see where I was going. Bottom line is they are doing this because it is a favorable for them to take this accounting position -- not because it is compelled to do so -- and this is served best with something extra to bolster it's rationale above and beyond that which they used with the 802.11n debacle and that which they shared on the call.
I'm just merely HOPING with the rest of the Apple TV owners out there that the HDMI connection is there for more than just movie trailers... and I think it's more fun to do so by trying to read between the lines.
GaussianBlur,
Very articulate, intelligent post.
Thanks.
Maybe not. Nokia and Motorola et al already get their cash in the form of up-front subsidies. There's probably not a huge difference there at the end of the day.
What might be important is that Apple will have an incentive to keep us using the iPhone, whereas other manufacturers just want us to replace our handsets as often as possible.
Which fits well with the idea of a flexible interface and software updates rather than new hardware all the time.
Get the iPhone strategy yet?
Ask a CFO if they want to take a lump sum now, or a reliable flow over the course of a longer period, s/he will always choose the latter. I could be wrong... it certainly wouldn't be the first time
Don't get too over-excited at the quote. This is the standard boilerplate uttered at every conference call and keynote. Yes, they are really working on cool stuff, but the statement itself isn't anything new.
and are also hard at work on some other amazing new products in our pipeline."
I beg to differ Hiro. Apple doesn't throw stuff like this around as standard boilerplate. And it is certainly not uttered at every conference call and keynote. There is something here. I think it's either Wi-Fi iPod which they must know everyone already knows about OR tablet PC like Axion's(?) with multi-touch.
Regards
I beg to differ Hiro. Apple doesn't throw stuff like this around as standard boilerplate. And it is certainly not uttered at every conference call and keynote. There is something here. I think it's either Wi-Fi iPod which they must know everyone already knows about OR tablet PC like Axion's(?) with multi-touch.
Regards
Um, no. Hiro is right. Apple say this, or something, very, very similar at pretty much every conference call/earnings release, and Jobs often says it during keynotes.
And there's always at least one AI person who picks up the quote and goes "OMG !!11!!! Apple are working on "amazing new products", what could they be??? Brain-implanted iPods with 100 TB storage??? OMG!!"
GaussianBlur,
Very articulate, intelligent post.
Thanks.
Thanks lfe2211
Fellow New Yorker I see... Upper West Side here...
I beg to differ Hiro. Apple doesn't throw stuff like this around as standard boilerplate. And it is certainly not uttered at every conference call and keynote.
Oh, puh-lease!
Apple Conference Call Transcript F4Q05: "We remain very enthusiastic about our product pipeline and we will have?"
Apple Conference Call Transcript F1Q06: "We remain extremely enthusiastic about our innovative product pipeline?"
Apple Conference Call Transcript F2Q06: "? and are excited about what we have in the product pipeline?"
Apple Conference Call Transcript F3Q06: "We remain very confident and excited about the products in our pipeline."
Apple Conference Call Transcript F4Q06: "? to innovation and we are very enthusiastic about our product pipeline.?"
Oh, puh-lease!
Apple Conference Call Transcript F4Q05: "We remain very enthusiastic about our product pipeline and we will have?"
Apple Conference Call Transcript F1Q06: "We remain extremely enthusiastic about our innovative product pipeline?"
Apple Conference Call Transcript F2Q06: "? and are excited about what we have in the product pipeline?"
Apple Conference Call Transcript F3Q06: "We remain very confident and excited about the products in our pipeline."
Apple Conference Call Transcript F4Q06: "? to innovation and we are very enthusiastic about our product pipeline.?"
Were they wrong?
iPhone question - During the call Peter O said that customers will benefit from free "software updates...". Could this mean that certain 3G features, especially the MUCH NEEDED upgrade from EDGE io HSDPA could be upgraded, like firmware? Is this kind of upgrade possible? Or would different hardware be necessary in the phone to support UMTS/HSDPA?
Those are hardware updates. Even though, like with the 802.11 card in Macs was enabled by a firmware update, it's still hardware update. Beyond that, the 1G iPhone probably won't have HSDPA hardware in it, making a firmware update impossible.
Oh, puh-lease!
Apple Conference Call Transcript F4Q05: "We remain very enthusiastic about our product pipeline and we will have?"
Apple Conference Call Transcript F1Q06: "We remain extremely enthusiastic about our innovative product pipeline?"
Apple Conference Call Transcript F2Q06: "? and are excited about what we have in the product pipeline?"
Apple Conference Call Transcript F3Q06: "We remain very confident and excited about the products in our pipeline."
Apple Conference Call Transcript F4Q06: "? to innovation and we are very enthusiastic about our product pipeline.?"
Um, just one little word missing there that separates today's line from those previous lines quote.
NEW
Apple has never said anything like this before. And, like I said before, there is something NEW coming. Now, it could be WI-FI iPhone like iPod, without iPhone which is really not NEW to us. Or it could be something completely different. I think something off the radar iis coming.
and are also hard at work on some other amazing new products in our pipeline
Oh, forgot to say that desktop sales are still seriously underwhelming whilst portable sales are rocketing. I think they said near the beginning of the conference call that laptop units grew at 79% year-over-year!! When are Apple going to get with the program with desktops?
Perhaps it is just because the laptops can do everything that most people need to do. And in this highly mobile world, they can take it with them.
Were they wrong?
They were mostly right, but it's business as usual. I expect Oppenheimer to say this sort of thing every single time. It's a signature line, like Wolverine's "I'm the best at what I do."
At the WWDC 05 Jobs also said "But as we look ahead, and though we?ve got great products now, and great PowerPC products still to come?" The PowerPC products still to come were nothing special, just good computers with PPC chips.
Perhaps it is just because the laptops can do everything that most people need to do. And in this highly mobile world, they can take it with them.
Desktops are still a very large chunk of Apple's Mac sales, though. They'd be foolish to not be as competitive there as they are in notebooks. They need some refreshes there, stat, plus, yep, a minitower. Flame me if you like, I think anyone who's acquainted with my posting style knows I just don't give a frak. Check my sig.
.
They were mostly right, but it's business as usual. I expect Oppenheimer to say this sort of thing every single time. It's a signature line, like Wolverine's "I'm the best at what I do."
At the WWDC 05 Jobs also said "But as we look ahead, and though we’ve got great products now, and great PowerPC products still to come…" The PowerPC products still to come were nothing special, just good computers with PPC chips.
And look what followed.
Interesting that the most innovative company in the world still can't get its due recognition without some yahoo tossing in some idiotic comment. In the five quotes, everyone of them was absolutely correct. And I defy any other company that could make those statements over the past two years and come close to what Apple has developed.
ATT/Cingular told analysts yesterday on CNBC that they have already surpassed a million sale orders for the iPhone; and between 60% - 70% are new accounts.
I don't believe they were sales orders, just inquiries, and an interest in being notified when they were out.
All that could mean is that people want to go down to the store and play with it for a while before they decide.
I don't wish to get into a flame war over this, but I do think this calls for some points of clarification. Currently, Apple does not segregate net sales by product when it comes to iTunes and Apple TV. It is aggregated under a single line item "Other music related products and services." So for financial statment purposes, these will appear together. I'll get to this point in a second...
Regarding your interpretation of GAAP: The principle to which you are referring has to do with the recognition of revenue. A seller must defer recognition of revenue until the buyer got everything for which s/he bargained. I won't get into the guts of it because it will likely cause Appleinsider readers to fall asleep en masse, but suffice it to say, the rules do not dictate whether or not you charge for a particular functionality, it simply states how you must account for it. The short of it is, Apple's "rationale" for chargine the $1.99 was rather suspect (Google it and you'll find a surprisingly large amount of commentary on this).
Now getting back to my speculation... and it was just that, speculation -- The Street tends to prefer a smoother, predictible, line for revenue/profits and providing for accounting treatment in this fashion serves to "spread the wealth", so to speak, over a longer period of time, and allow, for accounting purposes, to match related revenue with appropriate expenses. Now marry the usual razors/blades analogy with a subscription-based rental service and you can see where I was going. Bottom line is they are doing this because it is a favorable for them to take this accounting position -- not because it is compelled to do so -- and this is served best with something extra to bolster it's rationale above and beyond that which they used with the 802.11n debacle and that which they shared on the call.
I'm just merely HOPING with the rest of the Apple TV owners out there that the HDMI connection is there for more than just movie trailers... and I think it's more fun to do so by trying to read between the lines.
We've discussed this before, but people forget, or weren't there.
It's a good explanation, keep it on hand. You may need it again.
Ask a CFO if they want to take a lump sum now, or a reliable flow over the course of a longer period, s/he will always choose the latter. I could be wrong... it certainly wouldn't be the first time
Moto and partners were too eager to get the Razr product line into more hands. The only was to cheapen it.
A friend had bragged how he and his wife had just gotten them, but the price had already dropped by half by the time he told me.
Apple wil not do this. we can be sure of that.