I can see it from both sides, but free is always better than plopping down more money on a device you've already paid for of course. What bites is that a lot of these things are enhancements that one might not expect to pay additional money for had they been part of desktop software.

Rolling them into a 3.0 product however makes the whole thing a new OS and therefore you can compare it to moving from one desktop OS to another, which always comes with upgrade fees for the Mac.

I suppose it can be argued to death on both sides. The ultimate point is that developers wishing to take advantage of new features must rely on customers making the paid upgrade. That's the part I fear most of all. If for not other reason than to stimulate upgrades, Apple should make the update available for free.

They can do without the extra $150 million (give or take a few million) in upgrade fees, especially since moving to the new version would enable in-app sales that are likely to surpass that quite easily.

Bitt, until the Pre is out, all its apps are nothing more than static web pages. It's a total unknown and they can change dramatically what's in the product versus what they've announced. I'll believe it when I see it. Most importantly, people will judge it when it's tested. Right now it just doesn't exist. And I doubt for a second it was any factor whatsoever in Apple's design and implementation choices for iPhone OS 3.0 as Apple-haters are speculating.