Thursday, January 17, 2008

Apple's $40 iPod Touch Penalty

Apple demands $20 from iPod Touch owners for an upgrade.
Many retailers are now selling iPod Touches for $20 less than MSRP, recognizing that if they don't, and a new shipment of Touches comes in wth the software already upgraded for MSRP, they'll have to refund $20 to those buyers anyway.

So, if new Touches are $20 less than MSRP, every early adopter is getting laughed at right now. Apple doing half the laughing, and anyone who buys a new one for $20 less (because retailers think they'll have to pay another $20 to get them upgraded) getting the second laugh.

I could sure use that $40 difference, which the new apps are very much NOT worth. Gee thanks, Apple. I know. I bought the apps.

Just to compare, anyone who was an early adopter of the original Zune got a FREE firmware upgrade which included new functionality when the new Zunes came out. Anyone who has already bought an early Samsung YP-P2 can now update their P2 for free, adding new features and usefullness. Anyone who bought an iPhone can expect free firmware upgrades which will include more functionality. Anyone who bought an early Apple TV will get for FREE the new firmware and considerably better functionality that the new releases will have. Sony Playstation 2 and 3 owners have not had to pay for firmware upgrades that made those machines into what they should have been in the first place, far closer to being worth what they cost. I paid $299 for my Touch, not because it was worth that much at that time, but because of the obvious potential it had to be better. I invested in it's potential. The new apps make it better. By putting those apps on new touches for FREE and NOT raising the price, even Apple admits that the original Touch was overpriced without those apps. They will make their profit by selling Touches with the new apps to a much larger group of people who didn't already buy one and wouldn't have with the lack of those apps.

What should Steve have done? Perhaps he realized that Touch owners don't spend as much money at iTunes store as other iPod owners do. I find the browser far more interesting, and can listen to almost any song I want using it and Maybe he's right. IMO he should have offered previous Touch owners a special $20 gift card. Buy the card for $20 and you can also download the new apps for free. Why is this good? The card can still be used as a $20 credit at iTunes, but many people won't use it. Apple makes another $20 either way, and Touch owners aren't paying for what should have been free as they can get new songs (or movies) with that gift card. It is very clear what is fair. It is very clear what is common practice in related electronics industries. What Apple did is neither fair or common. Dangerous is the best word I can think of.


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