During Apple’s second-quarter 2007 financial results conference call, Apple CFO Peter Oppenheimer disclosed that Apple has adopted a new accounting policy in order to provide ongoing software feature and application updates for both Apple TV and the iPhone.
“We believe the iPhone is a revolutionary device that is years ahead of the competition,” said Oppenheimer. “We plan to build on this incredible foundation by continuing to develop new software features as well as entirely new applications, and incorporate them into the iPhone. And since iPhone customers will likely be our best advocates for the product, we want to get them many of these new additional features and applications at no additional charge as they become available.” Consequently, the company will account for each iPhone’s revenue over a subscription-style 24-month period rather than all at the time of sale. A similar statement was made regarding future Apple TV features.
Updated: In response to an analyst’s inquiry as to why Apple TV would be placed on a subscription accounting model, given that no subscription is required for the device, Apple stated again that it was looking at a number of new features for Apple TV, but did not specify what they would be. The analyst questioned whether this was a prelude to a subscription package for Apple TV content, and was not directly answered.