Bastion

How the iPhone and Poor Management Contribute to Apple's Downfall

As already pointed out, it's not stupid - it's the law.

I guess the complaint really drives not to the accounting method chosen, but the business model itself. You have to set up a subscription accounting if you sell a subscription product.

And I agree with the other posters that the free upgrades to the platform (iPhone and iPod) via iTunes is critical for establishing the platform. For the Mac platform, it is already established - that's why you pay for upgrades (not "updates" - i.e. bug and security fixes, as these don't necessarily add features but fix or improve existing features).

Maybe someday they will return to a paid-upgrade model, but for now, the market needs a zero-discouragement policy towards increasing unit sales so that the user base and market dominance is established.

Besides, as I think it was already mentioned, sure, the huge, pre-economic fallout sales were dampered by the subscription accounting. But that also means that as unit sales dramatically decline over the next several quarters, that extreme low will be dampered by the carry over from the boom.

Only investors on the short-term, quarter-to-quarter hype cycle care about this accounting nonsense. And it is certainly overlooking the impact of the Jobs health rumors and general economic collapse to attribute the stock's poor recent performance to the accounting method.

It's like bad science: ignoring any evidence that conflicts with your hypothesis.


On Jan 20 12:57 PM waf76 wrote:

> Recognizing $12.45 a month over a 2 year period for every 16gig iPhone
> over 2 years is stupid.