Palm pre forum

Palm released a set of slides outlining their plan to utilize a subscription accounting plan for the upcoming Palm Pre smartphone and future webOS devices. This sort of accounting has been used previously by -guess who- Apple with their iPhone and iPhone 3G. For those unfamiliar with this part of corporate money crunching, here’s a brief explanation. Subscription accounting allows for the revenue generated from the subscription service to be spread across the life of the service, while revenue from the sale of the device itself will be accounted for immediately. This method is viewed as a “safer” option financially, allowing for gradual increase of the revenue as more devices are sold, giving the impression of stable earnings and growth.



What does this mean for Pre (and other soon to be webOS device) owners? Free software updates. Palm promises on the first slide to “provide new software features free of charge to customers of its webOS products including the recently announced Palm Pre.” To do this, Palm will use the Subscription Accounting for Palm webOS devices, realizing the revenue evenly over the span of the devices life, or the life of the 24-month contract with the service provider. This allows Palm to account for the free software updates since the users of the Pre will be continually paying subscriber fees.

Notably, subscription accounting is limited to the Pre and future webOS devices. The sales revenue from the old Palm OS devices, such as Centro, Treo, and other Palm PDA’s will be recognized immediately. This signals that Palm will be continuing development on the webOS devices for a while to come, and we may have seen the last of the non-webOS devices with the recently released Treo Pro.
For those hard-core Palm fans, a direct link to a .pdf of the slides can be found here