Apple to Expand/Upgrade iPhone for Free

Though the iPhone has yet to hit store shelves, many people have already decided whether they intend to purchase one when it does. For those who have decided not to buy an iPhone, one of the most common reasons given is that subsequent versions of the iPhone will have features deemed lacking in the upcoming first release of the iPhone. In part, that may no longer be true.

In a conference call today, Apple CFO Peter Oppenheimer spoke about Apple's plan for expansions and updates for the iPhone (which also applies to Apple TV). Oppenheimer was quoted as saying

"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. Since iPhone customers will likely be our best advocates for the product, we want to get them many of these new features and applications at no additional charge as they become available."

Some analysts have termed this announcement "groundbreaking" or even a "bombshell", which it may or may not be. For the average Joe looking to get the most for his iPhone dollar, whether or not this is the bombshell some claim it to be is based solely on exactly what type of new features, expansions, or updates Apple plans to provide.

Based on the announcement, there is a good deal of indication that Apple is taking these updates seriously, however. In regards to the iPhone updates, Oppenheimer stated,

"Since we will be periodically providing new software features to iPhone customers free of charge, we will use subscription accounting and recognize the revenue and product cost of goods sold associated with iPhone handset sales on a straight line basis over 24 months."

So what does this mean for the average iPhone buyer? It means that Apple, as part of it's iPhone business plan, worked upgrades and expansion into it's accounting. This, in turn, should indicate that the iPhone was built from the ground up to be an upgradeable and expandable device. Apple is evidently serious about providing updates of real value to individuals who purchase the first version of the iPhone, thus eliminating the early-adopter penalties that usually come along with buying a first-generation device.

What features of the iPhone will be upgradeable, of course, remains to be seen. There has been some speculation over the last few months that support for AT&T's speedy 3G (third generation) data network, currently lacking from the iPhone "1.0", could be upgraded via software. Some technology experts have refuted this claim, while others have described it as dependent on the particulars of the iPhone's engineering. Should 3G be upgradeable, it open the door to adding a feature who's current absence is a deal breaker.