updated 06:55 pm EDT, Wed April 25, 2007
iPhone Recurring Revenue
The introduction of the Apple TV in March and the future release of the iPhone will bring about a change in the way Apple tracks its revenues, CFO Peter Oppenheimer said during his company's conference call for its second fiscal quarter results. The executive said that it will report revenues attributed to both devices on a subscription-like basis, rather than count only the one-time costs associated with each device as they occur. AT&T payments to Apple would be factored into the iPhone's quarterly numbers.
When justifying the decision, Oppenheimer pointed to the radically different business model for both products. Both the phone and media hub will receive a relatively steady amount of software features for free over their respective lifespans, meaning that the income from each sale in effect amortizes the software development costs after the product is released. The financial chief touted this as playing on Apple's strength with software..
"We are taking this bold step to leverage what we do best," he said.
Oppenheimer declined to predict how much money each iPhone would bring in per month when prompted by one analyst's line of questioning. There are multiple factors at work that could affect the actual income, the CFO said, ranging from the cost of a particular model to variances with income from AT&T. All Apple-made iPhone accessories will be counted solely as one-time events.
An explanation of which features would be added, and how frequently, was beyond the scope of the results phone call.