If FaceTime is ever going to become anything resembling universal, putting an extra price tag on already pricy hardware could hamstring the whole effort.
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Gizmodo on Apple charging $1.00 for the Facetime Mac app. (note: Americans are spoiled)
Gizmodo on Apple charging $1.00 for the Facetime Mac app. (note: Americans are spoiled)
AaronS
on 24 Feb 11It’s called Sarbanes-Oxley.
AaronS
on 24 Feb 11As confirmed by Dan Moren of Macworld: http://twitter.com/#!/dmoren/status/40792516752187392
Apple told me that the FaceTime $1 charge for existing Mac users is regulatory related (remember the $2 802.11n patch circa 2007?).
Chris G
on 24 Feb 11Yes, Ninety-nine cents < Free
But still: ninety-nine cents
Joe Casabona
on 24 Feb 11I don’t get the idea that Apple wants to make anything universal. If you want to use Apple products, you have to pay a premium.
Raymond Brigleb
on 24 Feb 11Besides all that, it will be built into Lion, so this is only until that comes out. Besdies, who uses FaceTime anyway?!?
Doug Webster
on 24 Feb 11It’s possible that they are doing this to intentionally reduce the number of users who use the service right away. This would allow them to verify that their systems can support the service in a controlled way. I doubt this is the best way to accomplish this goal…but maybe. Perhaps they will credit the dollar back to the early adopters later.
Jussi Pasanen
on 24 Feb 11Oh the irony. The consequence of making everything $0.99 is that suddenly that itself becomes expensive. Since when was $0.99 “premium”? An aside from JF’s Inc. column:
I wonder if non-participation is a choice anymore for many developers?
Mighty Pipsqueek
on 24 Feb 11@Raymond Brigleb: On my 768kbps down / 128kbps up DSL line, FaceTime offers noticeably better video quality compared to Skype when chatting iMac to iMac. That’s why I use FaceTime when I can.
SayWhat
on 24 Feb 11@AaronS
What in the world does SOX have to do with this post?
Alex Humphrey
on 24 Feb 11I agree with Joe Casabona; there is no indication that Apple WANTS to be universal. They have always pushed themselves as a premium product.
And at the end of the day…it’s a dollar. Who cares?
AaronS
on 24 Feb 11@SayWhat That’s the reason Apple is charging $.99.
As “confirmed” by Dan Moren of Macworld: http://twitter.com/#!/dmoren/status/40792516752187392
Apple told me that the FaceTime $1 charge for existing Mac users is regulatory related (remember the $2 802.11n patch circa 2007?).
My understanding is that “regulatory related” reason is SOX.
Don Schenck
on 24 Feb 11Ninety nine cents is cheap; Who cares?
But this once again reinforces the fact that SOX costs U.S. businesses more than was lost in the mess that brought about Sarbanes-Oxley in the first place.
Government, like alcohol, is the source of and solution to all our problems! (HT Homer Simpson)
David Andersen
on 24 Feb 11Slightly related – I can’t believe how many people I’ve read complaining in reviews about the price of 2-5 dollar apps on iTunes. Complaining because they aren’t one dollar. It’s insanity. These aren’t crappy apps that aren’t worth 5 bucks, they are well done.
People literally say they’d buy if not for the so-called high price. They have no idea of the effort that goes into the development and they’ve lost sight of value. And I suppose when they can get so many for a buck, expectations have been reset. I’m not sure if this is good or bad.
SayWhat
on 24 Feb 11@AaronS
SOX is only related to ensure financial reporting is correct.
The regulation is probably something FCC related and/or the FCC equivalent outside the US.
David Andersen
on 24 Feb 11Apple and its accounting advisors clearly believe that a public release of FaceTime software for existing Macs represents a substantial new feature addition for which the company is required to either charge a small fee or restate its past earnings to retroactively delay recognition of a tiny slice of revenue from each past machine sale.
David Andersen
on 24 Feb 11The comment I just made is a quote from here:
http://www.macrumors.com/2011/02/24/apples-0-99-facetime-charge-due-to-accounting-requirements/
David Andersen
on 24 Feb 11Dear 37s, how about the ability to edit comments – at least for 5 minutes?
EH
on 24 Feb 11This still makes no sense to me. Are there any actual journalists writing about this story?
David Andersen
on 25 Feb 11@EH -
If Apple doesn’t charge people with existing Macs for the software, they are, from an accounting POV, adding a material feature of the OS that they collected and recognized revenue for when the sold the machine originally. The fraction of revenue they collected then, without delivering the product (Facetime), would therefore be improperly recognized (not deferred) and overstate their earnings (however small). Thus they would have to restate their financials for several years, a royal pain. So instead they charge a measly fee now and get around this problem. It’s by far the lesser of two evils.
I think I got that right – an accountant might have a correction, but that’s what I remember from prior study and reading.
SayWhat
on 25 Feb 11@David Andersen
It’s not an accounting issue, it’s a monopoly issue.
Apple doesn’t want to be viewed as performing the next “Internet Explorer” stunt that bit Microsoft.
Brian Jones
on 25 Feb 11Yeah, but isn’t it free on new Macs?
Noah Harlan
on 25 Feb 11David is correct and his explanation is correct. This was previously an issue with unlocking 802.11n functionality back in 2007:
http://www.appleinsider.com/articles/07/01/15/apple_to_impose_80211n_unlocking_fee_on_intel_mac_owners.html
It’s a bureaucratic nightmare if they were to add that substantive new functionality free. If you buy a new machine the feature is included in the OS (Lion) and therefore there’s no need to charge separately from a Sarbanes Oxley perspective.
Robert Morris
on 26 Feb 11I doubt Apple will charge 99 cents forever-it will probably be included for free in OS X Lion, if not the next generation of Macs. (In other words, I think this will be just like previous updates that Apple charged for due to one of two choices they had to make to comply with SOX-e.g., the 802.11n enabler.)
foljs
on 26 Feb 11@Raymond Brigleb Besdies, who uses FaceTime anyway?!?
Errr, that was exactly the point…
Chris
on 27 Feb 11It’s not about the money, it’s about training people to pay for an app at the Mac App Store.
That’s how they do it, and it’s very clever. It’s the same reason they’re charging for iMovie for iOS.
uxdrew
on 28 Feb 11@David Andersen: “These aren’t crappy apps that aren’t worth 5 bucks, they are well done.”
Part of the problem is that there is no way to evaluate the truth of this statement for any particular app without buying it. Yes, we’re in the “2 cups of coffee” zone here, but if you find yourself buying two or three of these apps to find the right one (and in some cases it’s not that the app was badly made, just lacking the feature you needed), it starts to add up. Solid developers have to overcome the skepticism created by their competitors’ shoddy work.
David Andersen
on 01 Mar 11@uxdrew -
The $5 you spend on an app and then finding out it doesn’t meet your needs is a ridiculously low cost – even if you do it 2 or 3 times – especially compared to traditional retail software pricing. I mean really, $15? I’m not moved to sympathy considered this is someone who’s probably paid considerably more for their phone/pad and monthly service fees. There is almost nothing you can buy with a lower cost for free and clear usage. If these apps were priced like traditional software you’d have a point about the cost vs. unknown value.
Also, this is well below what most useful software for your computer costs. Sure, it would be nice to have a trial version, but many developers already provide such a thing – so ok you have an argument for more trial versions. But you also have the ecosystem of reviewers giving you some degree of confidence and you have the producers comments and website to give you more information.
Complaining about an app because it is $3 or $5 instead of $1 is – as Jamie noted – being spoiled.
uxdrew
on 01 Mar 11@David Andersen:
It’s not really about whether I have a point, or whether I’m describing an attitude that’s rational or sympathetic. It’s about whether that’s really what’s going through customers’ minds, and if so what we can do about it. How do we “unspoil” this market?
Jeffrey Silberman
on 02 Mar 11“Unspoil” Hmmm. That door is unlikely to ever close again. As far as the successive purchases of similar apps until finding the right one, I wouldn’t mind it if there was eventually one that did the job that an old Palm app still does better. I have not found one advanced mortgage app that will keep me from carrying an old M505 around and for some reason Mindweave does not think its worth the effort to create a Loan/Mortgage Pro version of their $25.00 palm apps. I am happy to pay for apps that do what I need for them to do. Multiple free or cheap apps that only do part of the job don’t simplify my life. The whole “SOX” issue is outrageous because it is a regressive imposition on the smaller business and a burden that never leads to recouping the funds it was intended to recover when violators don’t get prosecuted, which tend to be the largest well connected companies.
This discussion is closed.