Originally Posted by
Spencer Osborne
The monies paid to Ford do not come out of ARPU per se. They come out of the revenue generated. Thus, they collect $12.95, then from that revenue pay an OEM subsidy. The theory on the OEM deals is that the company will make money on this at some point.
The royalies have always been out of revenue as well. However, the pass-thru was designed as a catch-up. When it started, I had projected a bump in ARPU for the following quarter only to find out that at the quarterly call that the money collected was not included in ARPU. It took me by surprise then, just as the sudden inclusion took me by surprise this time.
I think at this point the company has collected $275 million in royalty fees, and stands to collect another $75 million in Q2. What I was told when they first excluded it was that is was excluded because it was a pass-thru.
given the change again, there has to be a reason for it. perhaps it is the new year, perhaps it is because they have caught up on the costs. However, the point is that ARPU was down quarter over quarter, but the metrics will never show it because ARPU is non-gaap.
It is not stupid to say that ARPU is different now than it used to be because of this change. It is a Fact. It is stupid to paint something in a light that is wrong. If you were to go and restate 2009's ARPU, you will see that ARPU went down, not up.