Palm Pre OS Updates: Free, Easy. 5
After PalmWebOS.org posted some internal Palm documents, the story's been making the rounds that Palm is planning on accounting for the Pre on a subscription basis (much like Apple does) and so they won't "realize" the revenue from Pre sales right away. This is true and very good news, as it means that Pre owners will benefit from free OS updates including what could potentially be significant feature upgrades for up to two years after they purchase the phone. Whether such features upgrades will actually come is another matter (Palm's history on this is pretty poor, but they have turned over a new leaf).
We actually reported this very news back on March 2nd at PreCentral.net, when discussing Palm's preliminary Q3 numbers (the final numbers will be reported any minute now). The notable portion goes a little like this:
Finally, if you were hoping for a gigantic revenue bump at the launch of the Palm Pre, think again. Since Palm intends on offering free feature updates to the webOS, they will need to account for the income the Pre generates over a 2 year cycle (similar to how Apple accounts for the iPhone) instead of at the moment of sale.
In other words, Palm's
balance sheet revenues (thanks John in the comments!) will continue to look fairly grim even though they're selling plenty of Pre Phones and are benefiting from the cash those sales bring in. Just an FYI to you stock watchers out there.
Just as important as the free updates is this: those updates will happen will be easy. Way back in January at CES, I asked Palm about whether OS updates would be as convoluted, hard to install, and infrequent as they were on PalmOS devices like the Treo 700p. The Palm rep smiled, shook his head, and said "Those days are over." It's not clear that Palm has nailed down the details yet, but users should be alerted to new updates over the air (and some updates may even be applied over the air), and larger updates should be fairly simple to apply.