In a move designed to help US companies better compete with their overseas competitors, the Financial Accounting Standards Board has changed the rules which govern how a company may report sales on devices which combine hardware and software:

Under the old rules, companies like Apple Inc. had to spread revenue from the sale of [...]]]>

In a move designed to help US companies better compete with their overseas competitors, the Financial Accounting Standards Board has changed the rules which govern how a company may report sales on devices which combine hardware and software:

Under the old rules, companies like Apple Inc. had to spread revenue from the sale of an iPhone over two years, the estimated useful life of the device. That’s because when Apple sells an iPhone, it agrees to provide software updates in the future.

Existing accounting rules require many software companies to divide up sales over the length of licensing contracts; until now, companies with hybrid hardware-software products were also guided by those standards.

The Financial Accounting Standards Board’s latest changes mean that Apple, plus other smart-phone makers, telecommunications equipment makers, semiconductor equipment manufacturers and a host of others, will be subject to a less onerous accounting standard.

The new rules let Apple ”unbundle” iPhone hardware from its software and report the hardware sales up front. That makes it easier for investors to see how Apple did in any given period.

In the last quarter, for example, Apple said that if it were allowed to account for iPhone sales all at once, its sales would have been 17 percent higher and its profit would have been boosted by 58 percent.

While many of FASB’s recent rule changes have been the subject of much controversy (particularly its decision to allow banks not to mark-to-market the value of their illiquid securities), this one seems well-designed.

Buying an iPhone which will receive several software updates over its useful life is not equivalent to purchasing a dishwasher with a two-year warranty. In the latter case, the seller rightfully recoups that portion of the sales price which was incrementally earned during the period in which you did not exercise your warranty rights. In the former case, however, what danger does the software update pose to the original point-of-sale? Is there a realistic chance that the update will go badly and brick your iPhone?

Kudos to FASB for (finally) making an intelligent change to the rules.

via New Accounting Rules Mean Boost to Apple, Others – NYTimes.com.

“I’m sure there will always be dedicated devices, and they may have a few advantages [...]]]> The battle brewing between Apple and Amazon keeps heating up. First, Amazon took aim at Apple’s iTunes market share with its Digital Download service. Now, Apple CEO Steve Jobs has fired a shot across the bow at Amazon’s next-generation e-book reader:

“I’m sure there will always be dedicated devices, and they may have a few advantages in doing just one thing,” Jobs said. “But I think the general-purpose devices will win the day. Because I think people just probably aren’t willing to pay for a dedicated device.”

Make no mistake: the iTablet (or whatever it’s called) is as much a threat to Amazon as it is to netbook manufacturers like Acer. The rumored price-point is $600, which isn’t bad for Apple, considering that fanboys were willing to pay that much for the first-generation iPhone.

via Steve Jobs: Apple Tablet Is Going To Destroy The Kindle (AAPL, AMZN).

What we found was that the price points for how most consumers value eReaders is shockingly low–for most segments, between $50 and $99. (Currently, [...]]]> Is anyone surprised by these findings? While I own a Kindle, I acknowledge I am one of the few geeky souls out there who does, and that price is probably the reason:

What we found was that the price points for how most consumers value eReaders is shockingly low–for most segments, between $50 and $99. (Currently, eReaders in the US are priced between $199 for the Sony Pocket Reader and $489 for the Kindle DX.)

The problem here appears to be that e-Reader manufacturers have yet to receive the memo that there’s a recession going on. (Yes, I know we may technically be in the recovery phase, but until unemployment goes down, it still feels like a recession to most people.) Pricey tech items (like e-Readers) are luxuries that many people simply cannot afford.

Mybet is that Apple will destroy the established players in the e-Reader field with its upcoming iTablet. While price still matters– especially at Apple’s rumored price-point of $600 –consumers have a strange ability to reject the pangs of budgetary common-sense when it comes to the latest shiny object to emerge from the Cupertino Brain Trust.

via The Forrester Blog For Consumer Product Strategy Professionals.

There has been much speculation about [...]]]> The iTablet may not exist yet, but don’t tell Piper Jaffray analyst Gene Munster. He’s predicting that the Cupertino Kids will sell 2 million units at $600 each in 2010 to generate $1.2 billion in revenue. This would represent a 3% gain in Apple’s total revenue for the year.

There has been much speculation about the rumored iTablet, but that hasn’t stopped TechCrunch founder Michael Arrington from pushing forward with his own Internet-enabled tablet, the CrunchPad.

How any of these offerings will impact early tablet-style readers like the Amazon Kindle or Sony eReader remains to be seen, but I’d be surprised if Amazon isn’t busy at work on a full-color, touchscreen version of its popular reading device in anticipation.

via Apple’s $1.2 billion tablet computer – Apple 2.0 – Fortune Brainstorm Tech .

The reason? Lee Applbaum, The Shack’s Chief Marketing Officer, explains:

“If you think about how you use nicknames, you generally use them with friends, people for whom you have an affinity and trust. Those are important [...]]]> RadioShack, the consumer electronics pioneer responsible for such hits as the TRS-80, has officially re-branded itself as “The Shack”.

The reason? Lee Applbaum, The Shack’s Chief Marketing Officer, explains:

“If you think about how you use nicknames, you generally use them with friends, people for whom you have an affinity and trust. Those are important attributes for any brand and certainly for us,” said Lee Applbaum, CMO of RadioShack, who explained that consumers and the company have used brand name shorthand for years. “If you can latch onto a brand truth, it’s a really wonderful thing.”

It all makes sense; continuing to call itself RadioShack makes about as much sense as calling itself The Marconi House. Why, then, does it hurt so much?

via The Shack Shakes It Up With Wild, Wacky Rebrand.

“We will not be ceding our content rights to the fine people [...]]]> An interesting development in the small but growing field of eBooks: who owns the relationship between content and customer? Amazon clearly believes it should do so, following in the model of Apple’s iPod. Newspaper tycoon and Wall Street Journal owner Rupert Murdoch feels otherwise:

“We will not be ceding our content rights to the fine people who created the Kindle. We will control the prices for our content and we will control our relationships with our customers. Any device maker or website which doesn’t meet these basic criteria on content will not be doing business long-term with News Corporation.”

News Corp CEO Rupert Murdoch

Which model will prevail? Or will publications with hefty clout (like the Journal) own the relationship while the little guys cede control to the device manufacturers?

via Murdoch: Why News Corp. Isn’t BFF With Amazon | paidContent .

There are some interesting trends in this Forrester Research report: