PDA

View Full Version : 802.11n Upgrade Fee Confirmed at $1.99




Pages : [1] 2

MacRumors
Jan 18, 2007, 05:31 PM
http://images.macrumors.com/im/macrumorsthreadlogo.gif (http://www.macrumors.com/2007/01/18/802-11n-upgrade-fee-confirmed-at-1-99/)


Apple spokesperson Lynn Fox has confirmed to News.com (http://news.com.com/Apple+wants+two+bucks+for+faster+Wi-Fi/2100-1044_3-6151281.html) that Apple will be charging an upgrade fee in the amount of $1.99 for Core 2 Duo iMac, MacBook, MacBook Pro, and Mac Pro users who have 802.11n capable chipsets. Users who purchase an Airport Extreme base station will not have to pay for the upgrade.

An Apple service document obtained by MacRumors had previously indicated (http://www.macrumors.com/pages/2007/01/20070115102215.shtml) that the fee would be $4.99, however Apple may have decided to cut the cost in reaction to strong negative reaction to the fee.Apple said it is required under generally accepted accounting principles to charge customers for the software upgrade. "The nominal distribution fee for the 802.11n software is required in order for Apple to comply with generally accepted accounting principles for revenue recognition, which generally require that we charge for significant feature enhancements, such as 802.11n, when added to previously purchased products," Fox said in a statement.
The explanation for the fee is reminiscent of an explanation previously given to iLounge. However, the explanation does not fit well with many of Apple's previous practices. For example, in May Apple updated iWeb to version 1.1 (http://www.macrumors.com/pages/2006/05/20060515170303.shtml) which added a host of commonly-requested features at no charge.

Article Link: 802.11n Upgrade Fee Confirmed at $1.99 (http://www.macrumors.com/2007/01/18/802-11n-upgrade-fee-confirmed-at-1-99/)



theheadguy
Jan 18, 2007, 05:34 PM
Translation: "We must make more money off of loyal customers."

edit: sorry for the people who love to be charged without proper reason, but they should see this:

http://gizmodo.com/gadgets/wireless/accountants-say-apples-199-80211n-tax-is-bogus-230538.php

trudd
Jan 18, 2007, 05:34 PM
A $3 cut in price?

...party.

bigandy
Jan 18, 2007, 05:37 PM
Translation: "We must make more money off of loyal customers."

Apple said it is required under generally accepted accounting principles to charge customers for the software upgrade. "The nominal distribution fee for the 802.11n software is required in order for Apple to comply with generally accepted accounting principles for revenue recognition, which generally require that we charge for significant feature enhancements, such as 802.11n, when added to previously purchased products," Fox said in a statement.

is there some problem here? i think your statement is a bit out of hand. $1.99 isn't exactly much worth complaining about.

SpaceMagic
Jan 18, 2007, 05:37 PM
I agree with Apple. $1.99 is a nominal fee and thus only counts as in accounting purposes. As they'll be selling Airport Extreme 'n' cards now as a separate product, there must be some make up for the loss that 'g' cards have suddenly transformed into 'n' cards. It's complicated but kinda makes sense to me.

Who cares anyway! I'd rather pay £1 than go buy a new airport express card. Thanks Apple I say.

WildCowboy
Jan 18, 2007, 05:37 PM
The explanation for the fee is reminiscent of an explanation previously given to iLounge. However, the explanation does not fit well with many of Apple's previous practices. For example, in May Apple updated iWeb to version 1.1 (http://www.macrumors.com/pages/2006/05/20060515170303.shtml) which added a host of commonly-requested features at no charge.

This is a different situation though...Apple is enabling an hardware feature that was present, but disabled and unadvertised at the time the customer originally purchased the machine. $1.99 is not a big amount, and it will obviously cost Apple some money to process these transactions, so I'm sure it's something they'd rather have avoided if they felt they could.

Peace
Jan 18, 2007, 05:42 PM
Great to see Apple gave in to peer pressure.

qualleyiv
Jan 18, 2007, 05:45 PM
Great to see Apple gave in to peer pressure.

Yeah, you're right that damn GAAP peer pressure.

HyperX
Jan 18, 2007, 05:47 PM
BUT will it unlock 802.11a as well? If so 1.99 isn't bad.



for those who dont accidentially find it on the webs

swingerofbirch
Jan 18, 2007, 05:47 PM
All software enables hardware to perform various functions. I don't understand this.

Is this Apple being super careful because of their corporate scandal?

I can download shareware programs that use the built in temperature monitors in my computer and use software to display the temperature on the screen. Are the companies who enable the use of this piece of hardware without requiring a charge breaking the law????????

Peace
Jan 18, 2007, 05:50 PM
Yeah, you're right that damn GAAP peer pressure.

First off.
Secondly if Apple was required to charge $4.99 that would be the way it is now but they changed it.

That says peer pressure.

smueboy
Jan 18, 2007, 05:53 PM
Why didn't they just enable 802.11n in C2D computers from the get go, and advertise as such? Or would that have detracted from the later release of 802.11n compatible Airports?

rjfiske
Jan 18, 2007, 05:57 PM
oh good grief, are we now complaining because Apple is charging the price of a couple of iTunes songs simply because it has to? This isn't a money-making scheme. This isn't a screw-job to loyal customers.

It's a compliance issue. If it was anything other than this, the fee would still be imposed (because again it has to) but it wouldn't be $1.99, it'd be higher. Don't forget if you have one of these 802.11n capable machines, the fee is NOT so you can use it as you are now. The fee isn't to give you functionality that existed when you purchased your machine under previous pretenses. It's to give you the abililty to use it in a NEW, better, faster (albeit unadvertised) way. You are losing nothing by not paying the fee. You are gaining something by paying the fee. I don't see the problem.

nbs2
Jan 18, 2007, 05:58 PM
Is this Apple being super careful because of their corporate scandal?

I wouldn't be surprised if this is what it is, coupled with an attorney that is concerned with making sure that Apple complies with the letter of the law, even if the spirit is undermined. After all, as long as you comply with the letter, you're untouchable.

patrick0brien
Jan 18, 2007, 06:00 PM
-All

This has to do with the gulf of having a feature installed, but not complete yet - e.g. the 802.11n spec is still in draft - so Apple has not enabled it yet. However, when the draft is certified, then enabling is possible. However, due to Sarbanes Oxley interaction with GAAP, Apple must charge due to the 'new feature' preinstalled in the machine.

Would we all rather Apple stick with 802.11 a/b/g and we suddenly can have our 3 month old machines not play with 802.11n? Can you imagine the yells of Obsolete in only three months from we Mac users?

This isn't the first time Apple has pre-built-in a feature before the draft was ratified - remember 802.11g?

The difference is now we have SOX - and Uncle Steve doesn't want to go to jail.

Blame Jeffrey Skilling, Ken Lay, and Bernie Ebbers for this sillyness.

EagerDragon
Jan 18, 2007, 06:01 PM
You are getting 2 to 5 times the speed for a minor price of $1.99 or $4.99 (which ever is correct).

Who cares, look at the Return On Investment (ROI for you).

Believe me it is not going to add that much to Apple's bottom line, but it is going to add huge speed increases to your networking.

darwen
Jan 18, 2007, 06:04 PM
is there some problem here? i think your statement is a bit out of hand. $1.99 isn't exactly much worth complaining about.

I have a MacBook that is pre-'n' upgrade. I would gladly pay $2 for the upgrade. I agree, I dont see what the problem is. So apple is charging $2 to use the functionality your computer has. As far as I can remember, they were not advertising it had the 'n' when it was purchased. What's the problem?

buffalo
Jan 18, 2007, 06:06 PM
Only the C2D MacBook's have the newer Airport card? If so will Apple sell cards to upgrade, and if so, how much might they cost?

smueboy
Jan 18, 2007, 06:07 PM
Would we all rather Apple stick with 802.11 a/b/g and we suddenly can have our 3 month old machines not play with 802.11n? Can you imagine the yells of Obsolete in only three months from we Mac users?



Good point

Peace
Jan 18, 2007, 06:11 PM
Only the C2D MacBook's have the newer Airport card? If so will Apple sell cards to upgrade, and if so, how much might they cost?

I'm guessing Apple will start selling 802.11n Airport cards.Getting them installed in the rev.A MacBooks will be the sticky widget.

guez
Jan 18, 2007, 06:11 PM
I agree with Apple. $1.99 is a nominal fee and thus only counts as in accounting purposes. As they'll be selling Airport Extreme 'n' cards now as a separate product, there must be some make up for the loss that 'g' cards have suddenly transformed into 'n' cards. It's complicated but kinda makes sense to me.

So wait: you're telling me that for accounting purposes, Apple has to charge something for the upgrade, but that it doesn't matter what they charge? This seems like an invitation to wacky accounting. Imagine if a corporation said: "Yes, our CEO received a house in Malibu, but we SOLD it to him for 1 cent."

I have a hard time believing that this is way things work...

Daringescape
Jan 18, 2007, 06:15 PM
The article is a bit confusing to me. I have a 15" refurb MBP core duo.

Do I have an upgradable card?

revman
Jan 18, 2007, 06:15 PM
Just GAAP accounting. If Apple includes hardware features that can easily be identified (e.g. n chips) and then provide a free driver upgrade at a later date, the implication is an "unspecified" software upgrade. Since this would have no standalone value then ALL revenue form the sale would have to be deferred until this was delivered to the customer. (In reality it is more tricky than this).

By charging $1.99 they estabish the value for it, which is really smart. My Oppenheimer has some clever guys on the team!

Web 1.0 to Web 1.1 is not comparable since the features of 1.1 were never released and so no implication was made.

This has been around for about 7 years, and SOX makes it much more visible

pale9
Jan 18, 2007, 06:22 PM
I agree with Apple. $1.99 is a nominal fee and thus only counts as in accounting purposes. As they'll be selling Airport Extreme 'n' cards now as a separate product, there must be some make up for the loss that 'g' cards have suddenly transformed into 'n' cards. It's complicated but kinda makes sense to me.

Who cares anyway! I'd rather pay £1 than go buy a new airport express card. Thanks Apple I say.

why charge anything for a simple firmware update!? i have tons of gadgets that get firmware updates that dont cost a cent, AND add functionality! apple is starting to nickel and dime us and i dont like it one bit. has success gone to their heads? hope not.

seems like many here agree with ANYTHING apple does and find reasons, even stupid ones, to justify the company's actions. sure, its just for accounting purposes, 1.99 is nothing, its adding value, apple is right in charging, ....

patrick0brien
Jan 18, 2007, 06:25 PM
I have a hard time believing that this is way things work...

-guez

It is, unfortunately. However to understand the intricacies of why, and expecially, how much per sold unit would require Ph.D's MBA's and a slew of gov't lawyer types.

It's one of those things it's less painful to just do it and make it go away.

Trust me.

studiomusic
Jan 18, 2007, 06:25 PM
Ok, so why did I not have to pay when my ipod video went from playing 320x240 to 640x480 with a simple update?
Just after I ripped most of my music videos to 320x240 too!:confused:

EagerDragon
Jan 18, 2007, 06:27 PM
why charge anything for a simple firmware update!? i have tons of gadgets that get firmware updates that dont cost a cent. apple is starting to nickel and dime us and i dont like it one bit. has success gone to their heads? hope not.

seems like many here agree with ANYTHING apple does and find reasons, even stupid ones, to justify the company's actions.

I think you should vote with your wallet and not get it. Send them a message.

EricNau
Jan 18, 2007, 06:27 PM
I'm sure the fee is for accounting purposes, after all, at $1.99 each, their monetary gain is going to be close to zero.

...And all the whiners can just sit down and be quiet. You should be lucky you're getting such an upgrade in the first place, after all, at the time of purchase, you had no idea you were getting this feature.

Some of us would love to pay $1.99 and have our CD MacBooks upgraded to 802.11n. :rolleyes: :(

Peace
Jan 18, 2007, 06:29 PM
The article is a bit confusing to me. I have a 15" refurb MBP core duo.

Do I have an upgradable card?

This upgrade for 802.11n is ONLY for the core 2 duo's.

/dev/toaster
Jan 18, 2007, 06:29 PM
is this upgrade for only newer MBPs or are all affected ? I have the first 17" and 15" MBPs, can I upgrade those ?

whatever
Jan 18, 2007, 06:34 PM
I'm sure the fee is for accounting purposes, after all, at $1.99 each, their monetary gain is going to be close to zero.

...And all the whiners can just sit down and be quiet. You should be lucky you're getting such an upgrade in the first place, after all, at the time of purchase, you had no idea you were getting this feature.

Some of us would love to pay $1.99 and have our CD MacBooks upgraded to 802.11n. :rolleyes: :(
I can't believe that Apple is attempting to hold me hostage like this!

I'm going to boycott this and encourage everyone else to join me!

802.11G 4 Life!

PS-And if you think this sounds stupid now you know how everyone who compained about paying $1.99 for something which is going to make things run faster and more smoothly!

EagerDragon
Jan 18, 2007, 06:34 PM
I'm sure the fee is for accounting purposes, after all, at $1.99 each, their monetary gain is going to be close to zero.

...And all the whiners can just sit down and be quiet. You should be lucky you're getting such an upgrade in the first place, after all, at the time of purchase, you had no idea you were getting this feature.

Some of us would love to pay $1.99 and have our CD MacBooks upgraded to 802.11n. :rolleyes: :(

Well said.
Besides Apples has for a long time provided more capabilities than what is adverticed. They meet and exceed what they promise.

patrick0brien
Jan 18, 2007, 06:36 PM
Ok, so why did I not have to pay when my ipod video went from playing 320x240 to 640x480 with a simple update?
Just after I ripped most of my music videos to 320x240 too!:confused:

-studiomusic

Because 802.11n is a completely new spec. A res change doesn't trigger a SOX test.

Alexander
Jan 18, 2007, 06:36 PM
Just GAAP accounting. If Apple includes hardware features that can easily be identified (e.g. n chips) and then provide a free driver upgrade at a later date, the implication is an "unspecified" software upgrade. Since this would have no standalone value then ALL revenue form the sale would have to be deferred until this was delivered to the customer. (In reality it is more tricky than this).

By charging $1.99 they estabish the value for it, which is really smart. My Oppenheimer has some clever guys on the team!

Web 1.0 to Web 1.1 is not comparable since the features of 1.1 were never released and so no implication was made.

This has been around for about 7 years, and SOX makes it much more visible

So you're saying that this GAAP rule applies to features which are identifiably present and disabled? Any elaboration you can provide would be helpful, as we're having a hard time grasping the exact circumstances under which Apple would feel obligated to charge for software upgrades.

john7jr
Jan 18, 2007, 06:37 PM
Ok, so why did I not have to pay when my ipod video went from playing 320x240 to 640x480 with a simple update?
Just after I ripped most of my music videos to 320x240 too!:confused:

That feature was "enabled" by iTunes, a product Apple gives away.

They can give away products, just not features. Same with Boot Camp, it's a "feature" of Leopard so they can add it after the Intel Macs were released. Airport Extreme base station users will get the feature with their new base station... so they don't have to pay either. They only thing they couldn't cover is the 3rd-party access points, hence the small fee.

glowingstar
Jan 18, 2007, 06:37 PM
"And if you don't throw in your buck 'o five..who will?"

Object-X
Jan 18, 2007, 06:39 PM
Does it justify the purchase of a new Mac? Neither of my Intel macs have the n WiFi card. Can they be upgraded? I doubt it. I'm tempted to sell my iMac on Ebay for $1200 and pick up the Core 2 duo reconditioned at Apple for $1300. The speed increase seems like it might be worth it. Of course I'll need to cough up another $180 for a new Airport too. Why quibble over a couple bucks?

Ah, progress.

shamino
Jan 18, 2007, 06:39 PM
is this upgrade for only newer MBPs or are all affected ? I have the first 17" and 15" MBPs, can I upgrade those ?
Sorry. See http://www.apple.com/wireless/80211/.

If you don't have a Core2Dup MBP, then you don't have the 802.11n hardware, and this firmware update won't do a thing. (It probably won't even install.)

EagerDragon
Jan 18, 2007, 06:40 PM
I can't believe that Apple is attempting to hold me hostage like this!

I'm going to boycott this and encourage everyone else to join me!

802.11G 4 Life!

PS-And if you think this sounds stupid now you know how everyone who compained about paying $1.99 for something which is going to make things run faster and more smoothly!

I think it is a democracy, if you object don't pay it is not mandatory.

If you think is worth it no matter why the charge (more money, regulatory requirement, want to be mean, etc....) is being made, then get it and get the speed increase.

Complaining here one way or the other solves nothing, vote with your wallet.

freeny
Jan 18, 2007, 06:45 PM
How can you tell your chip set?

/dev/toaster
Jan 18, 2007, 06:46 PM
Sorry. See http://www.apple.com/wireless/80211/.

If you don't have a Core2Dup MBP, then you don't have the 802.11n hardware, and this firmware update won't do a thing. (It probably won't even install.)

Ah I see. I already have a gigabit network running in my house, so having the n wireless network isn't going to give me much extra anyhow.

furious
Jan 18, 2007, 06:47 PM
Correct me if i am wrong but could this be that it is a hardware upgrade not a software update?

So form here were do we go. Every time firmware is updated we have to pay?:o

EricNau
Jan 18, 2007, 06:51 PM
How can you tell your chip set?
Apple Menu -> "About this Mac"

tkidBOSTON
Jan 18, 2007, 06:51 PM
I'm not sure I understand the GAAP implications of this under revenue recongition rules. If this were a service that was advertised and promised as a future deliverable, then I could understand not being able to recognize revenue until the terms for the sale were met. But if this is an unadvertised bonus they decide to throw in after the fact, I dont see how they wouldnt be in compliance with GAAP.

timhood
Jan 18, 2007, 06:57 PM
So wait: you're telling me that for accounting purposes, Apple has to charge something for the upgrade, but that it doesn't matter what they charge? This seems like an invitation to wacky accounting. Imagine if a corporation said: "Yes, our CEO received a house in Malibu, but we SOLD it to him for 1 cent."

I have a hard time believing that this is way things work...

Actually, that is quite legal. There's nothing to prevent a company from selling it's CEO a house in Malibu for 1 cent. (Other than the board of directors disapproving of that "compensation plan"). Even the government doesn't care because the CEO has to declare the fair market value of the home as taxable compensation. There's no funny money going around here.

godrifle
Jan 18, 2007, 07:00 PM
Translation: "We must make more money off of loyal customers."

Would you rather have purchased a computer recently that *didn't* have 802.11n? They'd surely have been in their rights to do sell you one! Or, how about they just simply refuse to release drivers for 11n for your Mac. You didn't buy it based on the promise of future upgradability.

A buck ninety-nine people. Sheesh. :confused:

caccamolle
Jan 18, 2007, 07:03 PM
I agree with Apple. $1.99 is a nominal fee and thus only counts as in accounting purposes. As they'll be selling Airport Extreme 'n' cards now as a separate product, there must be some make up for the loss that 'g' cards have suddenly transformed into 'n' cards. It's complicated but kinda makes sense to me.

Who cares anyway! I'd rather pay £1 than go buy a new airport express card. Thanks Apple I say.

glad to hear you agree with Apple, I am sure SJ will make a note of it. But I agree with you, who on earth cares !!!!

Porco
Jan 18, 2007, 07:04 PM
I don't think $1.99 is a big deal at all, but I do think the principle is a bit weird, if they can charge less than that for actual products (i.e. iTunes tracks) and happily support their products online with software updates etc - why not make it a wholly symbolic 1 cent (maybe + credit card processing fee)?

Or even include a 5% discount e-voucher off your next iTunes or Apple Store purchase as part of the $1.99 fee (on condition of having bought one of the affected machines already, naturally).

freeny
Jan 18, 2007, 07:12 PM
Apple Menu -> "About this Mac"

Yes, I know thats where the info hides.

What exactly do you look for?

Rocksaurus
Jan 18, 2007, 07:13 PM
Apple pocketed $1 Billion last quarter alone. If they have to conform to this law, then why don't they charge 1 cent like others have suggested? I agree with others who have said $1.99 won't add much to their bottom line. So why bother? Charge a symbolic 1 cent to conform with the law, and don't piss off your loyal userbase, Apple.

tyroja00
Jan 18, 2007, 07:14 PM
I used to be a Big 4 Auditor and I can attest that this issue has nothing to do with Sarbanes Oxley. Sarbanes Oxley deals with the implementation of an oversight board, proper internal controls, etc., none of which dictate a $1.99 charge.

As for accounting fees, Apple is a large client for one of the Big 4 firms. If they need their revenue adjusted, it will be the audit team who will end up doing it. And, it won't cost that much more than the millions that they pay their accounting firm.

First the question is, do they want their revenue adjusted? No, they don't. It would not make the Board of Directors and the Investors happy and it would place doubt in the marketfor their stock.

Second, does this case even warrant a revenue adjustment? Since I am not on the audit team, I can't say why this issue even came up (auditors don't try to find these vague issues and when they do they try to tidy it up). Since the cards were not advertised as "N", I do not know why there is an issue as to when revenue's could be recognized. There may be "cost of goods sold" valuation issues as to the undercosting of the machines (if the cards were built in house) to reflect greater net income. But, the auditors would have tested this unless Apple lied to them. Which I am sure they DO. Everyone tries to hide things from their auditors. If they get caught, they have to change things. If it is difficult to change (noone wants to have their financial statements readjusted). They pass the buck and put a "spin" on it. My guess is they got caught with hiding something in the prior year and this is their fix.

So, overall, I do raise an eyebrow to the fee. But $1.99 won't break me...and I will probably buy there airport express anyway so I won't have to pay.

EricNau
Jan 18, 2007, 07:15 PM
Yes, I know thats where the info hides.

What exactly do you look for?
You'll want one of these machines...

iMac with Intel Core 2 Duo (except 17-inch, 1.83GHz iMac)
MacBook with Intel Core 2 Duo
MacBook Pro with Intel Core 2 Duo
Mac Pro with AirPort Extreme card option

Pretty much, if you have a Core 2 Duo Processor (with one exception) or a Mac Pro, you qualify.

freeny
Jan 18, 2007, 07:23 PM
You'll want one of these machines...

Pretty much, if you have a Core 2 Duo Processor (with one exception) or a Mac Pro, you qualify.

Thank you.
So is this a charge that will be applied to new buyers or people with current chipsets that comply?

as you can see im a bit confused as to who exactly will be charged for an upgrade.

jonharris200
Jan 18, 2007, 07:25 PM
Ok, so I have an Intel Core 2 Duo iMac with 802.11n draft.

If I download the $1.99 software when it comes out, is that enough to bump my speed, or do I need to replace my Netgear wireless router (3 yrs old) with a newer version (new hardware or new software or both) as well?

Spanky Deluxe
Jan 18, 2007, 07:28 PM
Surely if they're only charging because of accountancy issues because of selling something with an feature that's not activated etc bla bla bla then all Core 2 Duo machines and Mac Pros that are sold as of now must come with the updated software or if not the users shouldn't have to pay the fee, right? Because they're now officially 802.11n supporting machines.

EricNau
Jan 18, 2007, 07:32 PM
Thank you.
So is this a charge that will be applied to new buyers or people with current chipsets that comply?

as you can see im a bit confused as to who exactly will be charged for an upgrade.
People with compatible systems can pay this fee if they wish to "upgrade" to 802.11n. (I'm assuming current systems are now shipping unlocked).

Ok, so I have an Intel Core 2 Duo iMac with 802.11n draft.

If I download the $1.99 software when it comes out, is that enough to bump my speed, or do I need to replace my Netgear wireless router (3 yrs old) with a newer version (new hardware or new software or both) as well?
You will need a 802.11n wireless router to get increased speeds.

gmanrique
Jan 18, 2007, 07:35 PM
It is not all of 'us'.

So you're saying that this GAAP rule applies to features which are identifiably present and disabled? Any elaboration you can provide would be helpful, as we're having a hard time grasping the exact circumstances under which Apple would feel obligated to charge for software upgrades.

jonharris200
Jan 18, 2007, 07:35 PM
You will need a 802.11n wireless router to get increased speeds.
Thanks Eric. And when did the first of those come out (Apple and non-Apple)?

Grimace
Jan 18, 2007, 07:36 PM
The vast majority of folks out there can't even take advantage of N speeds even with an N router!! Geez, we love to whine don't we.

jonharris200
Jan 18, 2007, 07:38 PM
The vast majority of folks out there can't even take advantage of N speeds even with an N router!!
Why not? Is there something else that's needed? Or are you being sarcastic?

macfan881
Jan 18, 2007, 07:41 PM
i dont see what the deal is i mean first off apple does not cleary state that there n cards when you buy them so i mean i would rather pay 2 bucks to upgrade for a firmware or rather than 50 bucks for a card to upgrade just be happy apple isnt charching most core 2 duos the full price of a card

jonharris200
Jan 18, 2007, 07:45 PM
i dont see what the deal is i mean first off apple does not cleary state that there n cards when you buy them so i mean i would rather pay 2 bucks to upgrade for a firmware or rather than 50 bucks for a card to upgrade just be happy apple isnt charching most core 2 duos the full price of a card
Ummm... punctuation? :) :confused: :p

davester
Jan 18, 2007, 07:57 PM
I can't believe all the negative ratings for this thread. Man, $US1.99 - whoop de ***** doo! - and it has now become more than 50% cheaper!! You can all afford to pay the extra to buy a Mac/s yet you complain about a nominal fee for an increase in speed for your existing wireless card/Airport. People like you complain for the sake of complaining. Get a life you losers.

Rocketman
Jan 18, 2007, 08:01 PM
http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)

However, the explanation does not fit well with many of Apple's previous practices. For example, in May Apple updated iWeb to version 1.1 (http://www.macrumors.com/pages/2006/05/20060515170303.shtml) which added a host of commonly-requested features at no charge.

This is a "hardware upgrade" on the theory that the entire device, CPU, firmware, accessories installed, together constitute the device.

They did a trial balloon at $4.99 and then announced $1.99. UPOD.

I still say this is a customer education experience to get them ready for similar experiences with iPhone (ATN) on a regular basis.

Rocketman

SiliconAddict
Jan 18, 2007, 08:08 PM
*http://home.comcast.net/~jonnormand/icons/posting.php_files/grumble.gif* Better. Not great. I'm still not happy about it since this should be free. But its better then $5. http://home.comcast.net/~jonnormand/icons/posting.php_files/dead_horse.gif

caccamolle
Jan 18, 2007, 08:46 PM
First off.Don't EVER call me a fool.
Secondly if Apple was required to charge $4.99 that would be the way it is now but they changed it.

That says peer pressure.

Ever ? sure about that ? you do sound like a fool to me with this reaction dude.

MacinDoc
Jan 18, 2007, 08:49 PM
Apple pocketed $1 Billion last quarter alone. If they have to conform to this law, then why don't they charge 1 cent like others have suggested? I agree with others who have said $1.99 won't add much to their bottom line. So why bother? Charge a symbolic 1 cent to conform with the law, and don't piss off your loyal userbase, Apple.
Charging 1 cent would incur a loss (due to the cost of materials, distrubution and sales-related costs). $1.99 would be approximately the break-even cost. If Apple were to sell this upgrade at a loss, it would incur the wrath of its investors, who already are not happy with its under-promised 2Q earnings.

matticus008
Jan 18, 2007, 08:49 PM
This seems like an invitation to wacky accounting. Imagine if a corporation said: "Yes, our CEO received a house in Malibu, but we SOLD it to him for 1 cent."
It's a clear case of the law creating the problem it is designed to curtail. In order to ensure accurate reporting, Sarbanes-Oxley (and some subsequent, related legislation) stiffened the rules. Now, in order to comply with the law on paper, they have to do a little "creative accounting" to make everything fit. It's just tax code bureaucracy at its finest. Nothing more, nothing less.

Contrary to the 'Big 4' comment above, this is in fact a clear-cut case of Sarbox interference. The question was whether to internalize the adjustment (annoy shareholders, damage stock price which impacts credit ratings and market cap, and eat into profits directly) or to charge a small, break-even fee to customers interested in upgrading their machines to the new standard. As a business, which would you choose? The customers received exactly what was advertised, so you've got no obligation to enable the n-mode at all.

why charge anything for a simple firmware update!? i have tons of gadgets that get firmware updates that dont cost a cent, AND add functionality!
This was an update to a device that didn't exist, officially speaking. It has nothing to do with software, driver, or firmware updates for 99.999% of products Apple has ever sold. So no, you've never been in this situation before.

So you're saying that this GAAP rule applies to features which are identifiably present and disabled? Any elaboration you can provide would be helpful, as we're having a hard time grasping the exact circumstances under which Apple would feel obligated to charge for software upgrades.
It applies when a product contains different (or in this case, extra) components than was disclosed in accounting documents. Even though the computers contain the hardware necessary, Apple didn't ever reported having bought or sold it. Now, in order to release a software update for it, it has to recognize that it sold it in the first place--it can't make it appear magically in its products. Sarbanes-Oxley is designed in large part to stop things appearing for free or 1 cent on the books, and releasing an update to an officially nonexistent product would be a great big red flag.

Correct me if i am wrong but could this be that it is a hardware upgrade not a software update?
In the real world, it's a software update. In the accounting world, it's an additional, material component.
So form here were do we go. Every time firmware is updated we have to pay?:o
No.
I'm not sure I understand the GAAP implications of this under revenue recongition rules. If this were a service that was advertised and promised as a future deliverable, then I could understand not being able to recognize revenue until the terms for the sale were met. But if this is an unadvertised bonus they decide to throw in after the fact, I dont see how they wouldnt be in compliance with GAAP.
1. You can't promise future-deliverable hardware, and at the time these products were launched, it would have been a huge risk to announce it. What if something had happened to the spec and the hardware suddenly wasn't compatible with a late draft? They've just recently announced certification for draft-n products.
2. "Unadvertised bonuses" don't exist in accounting, only in advertising.

Apple pocketed $1 Billion last quarter alone. If they have to conform to this law, then why don't they charge 1 cent like others have suggested? I agree with others who have said $1.99 won't add much to their bottom line. So why bother? Charge a symbolic 1 cent to conform with the law, and don't piss off your loyal userbase, Apple.
Pissing off the loyal user base would have been to ignore the older products and avoid making any headlines at all. It would have saved them their time and trouble, but ultimately it would be worse for the customer. 1 cent is unworkable for any number of reasons--the processing fee for the transaction is a great deal more than 1 cent, many credit cards won't accept charges less than $1, and 1 cent is an obvious token amount. They can't file new paperwork with a bunch of one-penny transactions and be taken seriously. A series of $1 charges is really the minimum for legitimacy, unless they were selling gumballs.

SiliconAddict
Jan 18, 2007, 08:50 PM
I'm sure the fee is for accounting purposes, after all, at $1.99 each, their monetary gain is going to be close to zero.

...And all the whiners can just sit down and be quiet. You should be lucky you're getting such an upgrade in the first place, after all, at the time of purchase, you had no idea you were getting this feature.

Some of us would love to pay $1.99 and have our CD MacBooks upgraded to 802.11n. :rolleyes: :(

Yah right.:rolleyes: What a load of crap. 1.99 x how many C2MBP's+iMacs+MB with pre-N? So while every other manufacturer is shipping with pre-N wares AND drivers and Intel months away from shipping their first chipset with pre-N us lowly Mac users should bow before Apple and be thankful that they give us N at all. My the Kool Aid is flowing freely this evening.

eenu
Jan 18, 2007, 08:51 PM
would this 'n' feature be unlocked with a fresh install of Leopard?

KindredMAC
Jan 18, 2007, 08:51 PM
Not a bad fee if you ask me.

Think about it, Apple is only going to get people paying this fee who think they have to have it who do not even have access to an N network anyways.... Otherwise you get the FREE version of the driver when you buy the N enabled APEXT.

Wow I just went back and read some of the postings.... I can't believe how many people think that as long as they have the N card in their new Intel Macs that they will get N speed out of a G Router..... SIMPLE ALGEBRA PEOPLE!!!!!!!

Rocketman
Jan 18, 2007, 08:53 PM
Ever ? sure about that ? you do sound like a fool to me with this reaction dude.

Since you are obviously not worth responding to, by him, let me just say Peace is one of the most ACCURATE posters here.

Rocketman

matticus008
Jan 18, 2007, 08:56 PM
Yah right.:rolleyes: What a load of crap. 1.99 x how many C2MBP's+iMacs+MB with pre-N? So while every other manufacturer is shipping with pre-N wares AND drivers and Intel months away from shipping their first chipset with pre-N us lowly Mac users should bow before Apple and be thankful that they give us N at all. My the Kool Aid is flowing freely this evening.
Were you sold a pre-n device? No. You were sold a computer (assuming you bought one) advertised as having 802.11b/g compliance. No mention of pre-n capabilities was made in any official capacity.

Everyone else labeled their products "pre-n" or "draft-n" and delivered software with it to make that operational. Apple had no software ready, so had it sold them as "pre-n" it would be shipping hardware without working drivers--an unsaleable, unfinished product. No one else has shipped a pre-n device incapable of 802.11n performance.

The kool aid might be flowing, but the brain juices definitely aren't around here.

gnasher729
Jan 18, 2007, 08:58 PM
Why didn't they just enable 802.11n in C2D computers from the get go, and advertise as such? Or would that have detracted from the later release of 802.11n compatible Airports?

Because the 802.11n standard wasn't finished at that time, and nobody knew for sure whether a firmware upgrade would be possible. If Apple had advertised this as 802.11n, and a firmware upgrade had been impossible, that would have been lawsuits costing many millions, plus possibly a hardware upgrade at Apple's expense for everyone who wants it. So advertising as 802.11n would have been bloody stupid.

fustercluck
Jan 18, 2007, 08:59 PM
I still contend this is bs, but if Apple wanted to stave off some of the displeasure, they could have offered a one-liner in that press release as to why they are charging at all.

I'm not concerned about paying $2, but if this is going to be a recurring thing in the future, I really want to know now. If Apple's M.O. going forward will be nickel and diming users, I'm going to lose interest in Apple products very quickly. If this is a one-time thing, fine, but explain the logic, Apple.

caccamolle
Jan 18, 2007, 09:01 PM
Since you are obviously not worth responding to, by him, let me just say Peace is one of the most ACCURATE posters here.

Rocketman

sorry, I was not disputing his accuracy (I am not interested), rather his reaction, unfriendly and unwarranted.

mrkramer
Jan 18, 2007, 09:06 PM
Yah right.:rolleyes: What a load of crap. 1.99 x how many C2MBP's+iMacs+MB with pre-N?

That number will get a lot smaller when you subtract all of the people who will not buy it because they don't have a router to work with it.

is Apple shipping this upgrade on all of the new computers?

revman
Jan 18, 2007, 09:06 PM
So you're saying that this GAAP rule applies to features which are identifiably present and disabled? Any elaboration you can provide would be helpful, as we're having a hard time grasping the exact circumstances under which Apple would feel obligated to charge for software upgrades.

Yes, you cannot imply a future upgrade without putting a monetary value on it at the time of the sale of the original item. If you do not put an amount on it, is called an "unspecified upgrade." If the amount is known then the company takes the amount out of the original revenue and places it into "deferred revenue." This can be taken under many circumstances, but especially when the driver is available. (You can have specified upgrade rights as well).

So one way around this is to not imply the upgrade but sell it later. Disabled hardware is hard to hide! The next paragraph is probably key though.

The problem is in the implication. If the featue is considered significant this is an issue. In this case, I suspect that Apple views 'n' as key to future product compatibility and as such consider it a significant upgrade.

I'll admit this is faily conservative accounting, but I have seen worse!

Hope this helps....I can point you to the accounting guidance if you need to get some sleep :-)

gnasher729
Jan 18, 2007, 09:09 PM
Apple pocketed $1 Billion last quarter alone. If they have to conform to this law, then why don't they charge 1 cent like others have suggested? I agree with others who have said $1.99 won't add much to their bottom line. So why bother? Charge a symbolic 1 cent to conform with the law, and don't piss off your loyal userbase, Apple.

What makes you think that a symbolic payment would be conforming with the law? On the contrary; should the situation ever be examined by the SEC, then they would assume that a 1 cent payment is just taking the piss instead of conforming with the law, and everything else would be examined very very closely. Not a clever strategy.

revman
Jan 18, 2007, 09:12 PM
I used to be a Big 4 Auditor and I can attest that this issue has nothing to do with Sarbanes Oxley. Sarbanes Oxley deals with the implementation of an oversight board, proper internal controls, etc., none of which dictate a $1.99 charge.

As for accounting fees, Apple is a large client for one of the Big 4 firms. If they need their revenue adjusted, it will be the audit team who will end up doing it. And, it won't cost that much more than the millions that they pay their accounting firm.

First the question is, do they want their revenue adjusted? No, they don't. It would not make the Board of Directors and the Investors happy and it would place doubt in the marketfor their stock.

Second, does this case even warrant a revenue adjustment? Since I am not on the audit team, I can't say why this issue even came up (auditors don't try to find these vague issues and when they do they try to tidy it up). Since the cards were not advertised as "N", I do not know why there is an issue as to when revenue's could be recognized. There may be "cost of goods sold" valuation issues as to the undercosting of the machines (if the cards were built in house) to reflect greater net income. But, the auditors would have tested this unless Apple lied to them. Which I am sure they DO. Everyone tries to hide things from their auditors. If they get caught, they have to change things. If it is difficult to change (noone wants to have their financial statements readjusted). They pass the buck and put a "spin" on it. My guess is they got caught with hiding something in the prior year and this is their fix.

So, overall, I do raise an eyebrow to the fee. But $1.99 won't break me...and I will probably buy there airport express anyway so I won't have to pay.


I doubt their auditors suggested this, but I bet Oppenheimers revenue managers are all over this these days.

They are complying with the impact of EITF 00-21 and the issues relating back to SOP 97-2. Their revenue recognition policy would suggest that they wanted to stay clear of any resemblance of an unspecified upgrade. I do agree that they are sensitized right now due to the SEC being all over them. Conservative accounting, yes, but pretty typical these days.

revman
Jan 18, 2007, 09:14 PM
I used to be a Big 4 Auditor and I can attest that this issue has nothing to do with Sarbanes Oxley. Sarbanes Oxley deals with the implementation of an oversight board, proper internal controls, etc., none of which dictate a $1.99 charge.

As for accounting fees, Apple is a large client for one of the Big 4 firms. If they need their revenue adjusted, it will be the audit team who will end up doing it. And, it won't cost that much more than the millions that they pay their accounting firm.

First the question is, do they want their revenue adjusted? No, they don't. It would not make the Board of Directors and the Investors happy and it would place doubt in the marketfor their stock.

Second, does this case even warrant a revenue adjustment? Since I am not on the audit team, I can't say why this issue even came up (auditors don't try to find these vague issues and when they do they try to tidy it up). Since the cards were not advertised as "N", I do not know why there is an issue as to when revenue's could be recognized. There may be "cost of goods sold" valuation issues as to the undercosting of the machines (if the cards were built in house) to reflect greater net income. But, the auditors would have tested this unless Apple lied to them. Which I am sure they DO. Everyone tries to hide things from their auditors. If they get caught, they have to change things. If it is difficult to change (noone wants to have their financial statements readjusted). They pass the buck and put a "spin" on it. My guess is they got caught with hiding something in the prior year and this is their fix.

So, overall, I do raise an eyebrow to the fee. But $1.99 won't break me...and I will probably buy there airport express anyway so I won't have to pay.

Surely if they're only charging because of accountancy issues because of selling something with an feature that's not activated etc bla bla bla then all Core 2 Duo machines and Mac Pros that are sold as of now must come with the updated software or if not the users shouldn't have to pay the fee, right? Because they're now officially 802.11n supporting machines.

Yes, I would expect this to be true.

ezekielrage_99
Jan 18, 2007, 09:17 PM
Well I guess it's better than paying for a new 802.11n card......

SeaFox
Jan 18, 2007, 09:22 PM
Translation: "We must make more money off of loyal customers."

OMG, I must choose between gaining 802.11g functionality or buying two double-cheeseburgers at McDonald's. :rolleyes:

djinn
Jan 18, 2007, 09:29 PM
When is the upgrade available?

NewSc2
Jan 18, 2007, 09:30 PM
Absolutely bollocks. Just like how Apple charges $20-50 every time they upgrade Logic 0.1. Imagine if Apple started charging its users $2 every OSX 0.0.1 update (10.4.1 to 10.4.2, etc.).

Just like somebody stated regarding the Video iPod resolution upgrade -- the Video iPod was advertised at a lower res, now it's higher res. That update was free. This should be too.

I mean, it's only $1.99, but come on Apple... are you seriously going to waste my time checking out of your store just so I can dl a $1.99 update?


Btw, I feel the same way about QTPro, but that's $20, not a measly $2.

bigbossbmb
Jan 18, 2007, 09:32 PM
That number will get a lot smaller when you subtract all of the people who will not buy it because they don't have a router to work with it.

is Apple shipping this upgrade on all of the new computers?

It doesn't appear so on the Apple website...but I'd imagine they will once this upgrade is released or when the new Airport starts shipping in February.

tyroja00
Jan 18, 2007, 09:41 PM
I doubt their auditors suggested this, but I bet Oppenheimers revenue managers are all over this these days.

They are complying with the impact of EITF 00-21 and the issues relating back to SOP 97-2. Their revenue recognition policy would suggest that they wanted to stay clear of any resemblance of an unspecified upgrade. I do agree that they are sensitized right now due to the SEC being all over them. Conservative accounting, yes, but pretty typical these days.

I still believe that this is a stretch on the application of both EITF 00-21 and SOP 97-2. Of course, I do not know what the original treatment of revenue recognition was. Out of curiosity, revman, do you know their argument on how this case should be handled under this opinion and emerging issue? (Keep in mind that the wireless N is not a separate entity from the wireless card and wireless N capability is noted with Windows usage)(Also, customers did not purchase Wireless N machines)

As for other practices, I remember when several DVD burners were updated with dual layer capability with firmware and no additional fees were required by any of the manufacturers.

Maybe it is the old auditor in me who believes that they are always trying to play with the numbers. Then again, that is their hidden job, to keep the auditors confused.

I don't mind the $1.99, it is worth it. I mind the excuse for it.

P.S. No I am not on their audit team. I got out of that a few years ago thankfully.

matticus008
Jan 18, 2007, 09:44 PM
Just like somebody stated regarding the Video iPod resolution upgrade -- the Video iPod was advertised at a lower res, now it's higher res. That update was free. This should be too.
They're not even remotely comparable. A new resolution is not a new feature, and any number of software updates are, as certainly they should be, free. This one is not, for any number of reasons explained multiple times by multiple people. Your computer wasn't sold to you on the understanding that it had draft-n hardware.

It's exactly the same as though you'd bought a computer with a CD-ROM drive and they came along and handed you a CD burner for free, where the CD burner didn't appear anywhere in their inventory or accounting documents. They simply can't do that. You can't give something away that you don't officially possess. If you could, I could give your car to my neighbor.

jwdsail
Jan 18, 2007, 09:47 PM
I'm surprised that the n enabler isn't going to be included as a feature in MacOS X 10.5 Leopard?

:confused:

Wouldn't that take care of adding features/accounting?

I know n was needed for AppleTV, but since AppleTV isn't shipping till Feb, why not wait on the enabler? Bundle it with AppleTV, the new Airport Extreme, and MacOS X 10.5?


Odd...

caralck
Jan 18, 2007, 09:48 PM
So, when I can buy this upgrade anyway? $2 doesn't bother me...I guess I don't have the same passion everyone else here does.

SiliconAddict
Jan 18, 2007, 09:48 PM
Were you sold a pre-n device? No. You were sold a computer (assuming you bought one) advertised as having 802.11b/g compliance. No mention of pre-n capabilities was made in any official capacity.

Everyone else labeled their products "pre-n" or "draft-n" and delivered software with it to make that operational. Apple had no software ready, so had it sold them as "pre-n" it would be shipping hardware without working drivers--an unsaleable, unfinished product. No one else has shipped a pre-n device incapable of 802.11n performance.

The kool aid might be flowing, but the brain juices definitely aren't around here.

Yes I was sold a pre-N device. (OK technically I wasn't because Apple traded my original MBP with a C2MBP but ignore that, for now assume this is any other C2MBP sale.) Just because Apple didn't tell anyone that it is pre-N doesn't make the hardware not pre-N. System support != defining what hardware is in your system. Hardware is hardware. And Pre-N draft hardware is pre-N draft hardware. So if I was to build a laptop, cripple a few drivers, ship the thing, then charge people for the update, that's OK? Only Apple could ever get away with this. Anyone else would have their butts handed to them by the PC community. Frankly I expect a lawsuit out of this, even at $1.99. Apple is setting a dangerous precedent here. What next? New features for the touchpad....$5......new features via the video driver......$10....EFI update for better battery performance or ACPI power......$15
Yah only Apple could ever get away with something like this.

Rocketman
Jan 18, 2007, 09:50 PM
sorry, I was not disputing his accuracy (I am not interested), rather his reaction, unfriendly and unwarranted.

Then I guess you are REALLY pissed at me :)

Rocketman

tyroja00
Jan 18, 2007, 10:11 PM
It's exactly the same as though you'd bought a computer with a CD-ROM drive and they came along and handed you a CD burner for free, where the CD burner didn't appear anywhere in their inventory or accounting documents. They simply can't do that. You can't give something away that you don't officially possess. If you could, I could give your car to my neighbor.

With respect, I don't believe that this is an accurate comparison. It is more like Apple sold me a CD-ROM that could turn into a CD-Burner and is actually a CD-Burner on Windows OS. However, I have to pay to burn on Mac OS. Accounting has nothing to do with it, unless they are capitalizing development costs for the firmware.

It is their prerogative to charge us. The cost is not excessive in my opinion. Just call it like it is.

matticus008
Jan 18, 2007, 10:16 PM
Yes I was sold a pre-N device.
Really? Where on the specifications on your invoice or in the product information does it mention that?

Just because Apple didn't tell anyone that it is pre-N doesn't make the hardware not pre-N. System support != defining what hardware is in your system.
It's not about what's inside the computer, and it never was. It's about what's on paper. GAO is done with paper records, not with an inspection of each shipped product. It didn't have the hardware officially, on paper, and now it does.
Hardware is hardware. And Pre-N draft hardware is pre-N draft hardware. So if I was to build a laptop, cripple a few drivers, ship the thing, then charge people for the update, that's OK?
As long as you didn't cripple any advertised functionality, absolutely. That's the way CPU and GPU manufacturers have been shipping their products for years.
Frankly I expect a lawsuit out of this, even at $1.99. Apple is setting a dangerous precedent here.
A lawsuit for what? For giving you more than you were promised? There is no precedent here for normal, free updates to officially supported hardware, as in none, whatsoever. Any attempt to claim otherwise is misguided and wrong.

With respect, I don't believe that this is an accurate comparison. It is more like Apple sold me a CD-ROM that could turn into a CD-Burner and is actually a CD-Burner on Windows OS. However, I have to pay to burn on Mac OS. Accounting has nothing to do with it, unless they are capitalizing development costs for the firmware.
Sure it does. If they never recorded buying the CD burners, then they can't legally sell those CD burners, because according to their records, they don't own any. It doesn't have anything to do with what third-party software can or can't do with it. It doesn't have anything to do with what the hardware actually can or can't do. It has to do with reconciling public statements with records submitted under penalty of perjury.

tyroja00
Jan 18, 2007, 10:36 PM
Sure it does. If they never recorded buying the CD burners, then they can't legally sell those CD burners, because according to their records, they don't own any. It doesn't have anything to do with what third-party software can or can't do with it. It doesn't have anything to do with what the hardware actually can or can't do. It has to do with reconciling public statements with records submitted under penalty of perjury.[/QUOTE]

Well, when they recorded the CD ROM into inventory, they did record the CD-Burner. It doesn't have to say CD-Burner. It just has to be at the cost that it was originally recorded at. This is basic accounting.

1) Inventory XXX
Purchases XXX
- To record inventory


Because, in your example, tell me where they get the CD-Burners that they are trying to reconcile public statements to, since physically it is in your computer and sold to you. So as I stated before, this is impossible unless they were capitalizing the development of the firmware.

SMM
Jan 18, 2007, 10:43 PM
Translation: "We must make more money off of loyal customers."

Perhaps you should read it again when sober, then offer others a 'translation'.

iW00t
Jan 18, 2007, 10:44 PM
The fee isn't to give you functionality that existed when you purchased your machine under previous pretenses. It's to give you the abililty to use it in a NEW, better, faster (albeit unadvertised) way. You are losing nothing by not paying the fee. You are gaining something by paying the fee. I don't see the problem.

Not true.

The functionality exists in your machine when you made your purchase, it is just disabled in software. To say that it is completely non-existant, well then Apple may please refund me the difference in cost price of a wireless-G and N card please. Nobody told Apple to put a more expensive card without our permission.

iW00t
Jan 18, 2007, 10:49 PM
I have a MacBook that is pre-'n' upgrade. I would gladly pay $2 for the upgrade. I agree, I dont see what the problem is. So apple is charging $2 to use the functionality your computer has. As far as I can remember, they were not advertising it had the 'n' when it was purchased. What's the problem?

It is a beginning of a slippery slope don't you think?

A better analogy would be Apple start selling "Quad" 2.66ghz Mac Pros at $4500 each. People will all whinge and moan, and comment about how you can buy a Octo xeon from Dell for the same price.

A few months later Apple announces an "upgrade" where you can buy a unlock patch from Apple at a "measly cost of $500" and "double the performance of your $4500 machine".

Wow, you are getting $4500 worth of processing power for a mere $500! Great deal!

MikeTheC
Jan 18, 2007, 10:49 PM
To me, this is simply akin to Apple charging for a firmware update.

I hope this isn't the shape of things to come.

iW00t
Jan 18, 2007, 10:57 PM
i dont see what the deal is i mean first off apple does not cleary state that there n cards when you buy them so i mean i would rather pay 2 bucks to upgrade for a firmware or rather than 50 bucks for a card to upgrade just be happy apple isnt charching most core 2 duos the full price of a card

Again not true.

The $2 is for a mere collection of bits, software that should have been present in the card to start with. The $50 upgrade fee you mentioned is just a hypothetical hardware upgrade fee, you are shelling out money for a new piece of equipment.

Trouble is, we already paid for the piece of equipment when we purchase our machines. Unless Apple decided to make a loss on us for the sake of including that more expensive card (yeah like I believe that).

matticus008
Jan 18, 2007, 11:09 PM
The functionality exists in your machine when you made your purchase, it is just disabled in software. To say that it is completely non-existant, well then Apple may please refund me the difference in cost price of a wireless-G and N card please. Nobody told Apple to put a more expensive card without our permission.
Okay, but your refund would be $0.00. They would have charged the same amount for the computer regardless. Apple's pricing is at fixed points and an extra dollar somewhere doesn't change the bottom line at the store.


Because, in your example, tell me where they get the CD-Burners that they are trying to reconcile public statements to, since physically it is in your computer and sold to you.
Easy. They do the same thing Apple is doing and the same thing other companies in the past have done to comply. You charge a nominal fee for the update and report it as a component acquisition. Those hypothetical CD burners appear in the original records as CD-ROMs, and in order to upgrade, you would write it off as an internal cost incurred, and report revenue from the sales of the "upgrades" as offsetting that cost. You just about break even and call it a day.
So as I stated before, this is impossible unless they were capitalizing the development of the firmware.
They're not capitalizing anything. They're increasing support costs, paying transaction charges, and distribution, not to mention the creation of the website, all of which comes at the expense of other things they could be doing with their time and bandwidth. Yes, they'll probably be scraping a few cents of totally free profit from each of these transactions, but they could have used the time and effort to work on more lucrative and more extended revenue streams.

MacinDoc
Jan 18, 2007, 11:11 PM
To me, this is simply akin to Apple charging for a firmware update.
No, it's not. It's the enabling of an unconfirmed standard to give users improved functionality with a 3rd party device. When Apple distributes this upgrade, it could be argued that it will be legally obligated to provide technical assistance for anyone using the upgrade with any 3rd party pre-N router. In addition, it could prove a nightmare if the finalized N standard ends up being different from pre-N. These are potential liabilities that must be accounted for.

poppe
Jan 18, 2007, 11:12 PM
Still not happy about it... but it'll be better than the original price... Still curious how many macs that Airport Extreme can update?

matticus008
Jan 18, 2007, 11:19 PM
The $2 is for a mere collection of bits, software that should have been present in the card to start with.
Actually, it's $2 for software and for the hardware that should not have been in the computer to start with. You were never promised 802.11n support, and it was never announced as a feature. You're lucky it was in there.

What would you be saying right now if those machines had zero capacity to upgrade to 802.11n? Would you be complaining that you missed the draft-n boat? I think so.

Trouble is, we already paid for the piece of equipment when we purchase our machines.
Yeah, and you paid for a part of Apple's billion-dollar profits this quarter. Does that mean you were overcharged?

It is a beginning of a slippery slope don't you think?

A better analogy would be Apple start selling "Quad" 2.66ghz Mac Pros at $4500 each. People will all whinge and moan, and comment about how you can buy a Octo xeon from Dell for the same price.

A few months later Apple announces an "upgrade" where you can buy a unlock patch from Apple at a "measly cost of $500" and "double the performance of your $4500 machine".
If you were sold a quad-core machine and received what was promised for the asking price, you're done. If they double the number of cores in two months and offer to upgrade yours for a lower price than the value difference, well then that would be a good deal, regardless of how they go about doing that upgrade. Bottom line: you choose whether or not to pay the asking price for a given product. If you pay the agreed price in exchange for a product with the advertised features, you've got nothing to complain about.

Still not happy about it... but it'll be better than the original price... Still curious how many macs that Airport Extreme can update?
How many you got? The answer is at least that many +1.

MacinDoc
Jan 18, 2007, 11:23 PM
Again not true.

The $2 is for a mere collection of bits, software that should have been present in the card to start with. The $50 upgrade fee you mentioned is just a hypothetical hardware upgrade fee, you are shelling out money for a new piece of equipment.

Trouble is, we already paid for the piece of equipment when we purchase our machines. Unless Apple decided to make a loss on us for the sake of including that more expensive card (yeah like I believe that).
Then maybe Apple should also give you a free copy of Leopard when it ships, since it should have included that on your Mac, as well. Of course, the software didn't exist at the time, but that doesn't stop you from arguing that non-existant pre-N drivers should have been included on hardware that wasn't advertised to support pre-N.

And unless you paid for a Mac that was BTO for pre-N instead of the standard G, you can't argue that you paid more for pre-N. The Mac is a package deal; you can't just add up the price of the components and tell Apple that it is obligated to sell you a Mac for the sum of the price of its components.

zoziw
Jan 18, 2007, 11:25 PM
If this is true and Apple needs to charge the $1.99 then why did Microsoft not charge for the 1080p upgrade to the Xbox 360?

The Xbox 360 had this functionality all along but MS did not advertise it and only activated it this fall through a software update?

caccamolle
Jan 18, 2007, 11:31 PM
Then I guess you are REALLY pissed at me :)

Rocketman

and why would I be ? after all this now is an effort to make this thread a bit entertaining....this many Sj wannabes wow it's getting boring: should be this and that and that, oh well, just another discussion about nothing I guess.

Guys, don't get me wrong here, all discussions are what those involved make of them, but hey, the $1 or $0.1 or $1.76, is a bit of stretching the imagination here :)

It is what it is. What was it ? $2.99 ? I forgot !!!

revman
Jan 18, 2007, 11:40 PM
I still believe that this is a stretch on the application of both EITF 00-21 and SOP 97-2. Of course, I do not know what the original treatment of revenue recognition was. Out of curiosity, revman, do you know their argument on how this case should be handled under this opinion and emerging issue? (Keep in mind that the wireless N is not a separate entity from the wireless card and wireless N capability is noted with Windows usage)(Also, customers did not purchase Wireless N machines)

As for other practices, I remember when several DVD burners were updated with dual layer capability with firmware and no additional fees were required by any of the manufacturers.

Maybe it is the old auditor in me who believes that they are always trying to play with the numbers. Then again, that is their hidden job, to keep the auditors confused.

I don't mind the $1.99, it is worth it. I mind the excuse for it.

P.S. No I am not on their audit team. I got out of that a few years ago thankfully.

Good for you, audit is the armpit now :-)

i do not know their treatment, but the embedded software with hardware has become a very hot issue. My guess is that 802.11n is going to a minimum to support movie download/streaming of some kind and as such the software would not be considered "incidental or perfunctuory"

My guess is that they take all revenue upfront, with a deferral on the Leopard upgrade rights from now to the Spring.

Of course they have a very strict policy on the upgrade policies, so this will not be an issue.

Actually, this is pretty cool that Apple would respond publicly about this rev rec concern. Hard to talk about materiality at this level, but they are definitely trying to establish a line in the sand, don't you think?

I can't think of any issues related to the iPhone, except that their finance team might be looking at the telecom literature, where rev rec is certainly a prickly issue.

I think the DVD issue was a little less for granted. Apple's problem was of course that they were shipping one product and then added a "hidden capability," which you could consider was pre-announcing an intent. I mean adding cost is hardly in the spirit ofthe game :-)

At they very least they are protecting themseleves quite nicely.


P.S. I bet the etxreme cards sold seperately up to mac world did not have n-chip in, hence the card issue is not in play.

matticus008
Jan 18, 2007, 11:46 PM
If this is true and Apple needs to charge the $1.99 then why did Microsoft not charge for the 1080p upgrade to the Xbox 360?

The Xbox 360 had this functionality all along but MS did not advertise it and only activated it this fall through a software update?
1080p isn't a new material feature; it's just a new resolution (just like the iPod resolution bump). The XBox had HD support. If it hadn't had HD support at all, then they'd be in the same boat as Apple. There is no different specialized hardware needed for 1080 over 720--you're only pushing more pixels.

Conversely, to get 802.11n, you need different hardware and different software than for 802.11g.

revman
Jan 18, 2007, 11:46 PM
If this is true and Apple needs to charge the $1.99 then why did Microsoft not charge for the 1080p upgrade to the Xbox 360?

The Xbox 360 had this functionality all along but MS did not advertise it and only activated it this fall through a software update?

Part of the issue is that Apple released releated products that require the n-chip. Also it was well established that the chips suddenly started shipping without an acknowledged release.

They are in the land of tricky accounting here,probably the most complex accounting that their is. Lots of grey area, so we shall see. And anyway we would expect the Apple finance dept to be smarter than Microsoft

LOL

Then maybe Apple should also give you a free copy of Leopard when it ships, since it should have included that on your Mac, as well. Of course, the software didn't exist at the time, but that doesn't stop you from arguing that non-existant pre-N drivers should have been included on hardware that wasn't advertised to support pre-N.

And unless you paid for a Mac that was BTO for pre-N instead of the standard G, you can't argue that you paid more for pre-N. The Mac is a package deal; you can't just add up the price of the components and tell Apple that it is obligated to sell you a Mac for the sum of the price of its components.


FYI. You can buy a Mercedes, Audi, Porsche, etc. with different perfomance capabilities and price. The truth is that a $25,000 performance upgrade on a Merc is just a swap out of firmware.

How about that for feeling bad.

tyroja00
Jan 19, 2007, 12:02 AM
Good for you, audit is the armpit now :-)

i do not know their treatment, but the embedded software with hardware has become a very hot issue. My guess is that 802.11n is going to a minimum to support movie download/streaming of some kind and as such the software would not be considered "incidental or perfunctuory"

My guess is that they take all revenue upfront, with a deferral on the Leopard upgrade rights from now to the Spring.

Of course they have a very strict policy on the upgrade policies, so this will not be an issue.

Actually, this is pretty cool that Apple would respond publicly about this rev rec concern. Hard to talk about materiality at this level, but they are definitely trying to establish a line in the sand, don't you think?

I can't think of any issues related to the iPhone, except that their finance team might be looking at the telecom literature, where rev rec is certainly a prickly issue.

I think the DVD issue was a little less for granted. Apple's problem was of course that they were shipping one product and then added a "hidden capability," which you could consider was pre-announcing an intent. I mean adding cost is hardly in the spirit ofthe game :-)

At they very least they are protecting themseleves quite nicely.


P.S. I bet the etxreme cards sold seperately up to mac world did not have n-chip in, hence the card issue is not in play.

Okay I see where you are coming from. But, honestly, really you don't think this is a way for Apple to better their financial position? Because I can think of a couple of creative accounting treatments that I would accept as their auditor that do not require charging customers. It seems that this is a sly runaround with a little bump to the cash flow.

And yes it is better to be out of accounting. I got sick of the horse-trading (i.e. I won't make you change this, if you change this, oh and Sarbanes implementation sucks for auditors). And if I was still in accounting, I would probably not be on my mac. Which makes me wonder about you.

O and A
Jan 19, 2007, 12:09 AM
Ok i absolutely do not understand you people who say it makes sense to pay.

It doesn't. just enable the damn thing via software update and be done with it. The cost should have been built into the price of the computer from the get go. Thats how they could have complied.

Im as much an apple fan boy as the next guy (just look at how long i've been registered) but sometimes you really just need to stop being fan boys people. I don't care if its 50 cents to do this. It should have been taken care of at purchase. If not then they shouldnt have put N cards in their computers.

koobcamuk
Jan 19, 2007, 12:10 AM
OK, the computer costs over one thousand whatevers and you get benefits for <£2. Just get over it.

Also, what about ethernet (wired) internet access? Looks like I might need to sell my router and iMac G5 in a year or two as well as this MacBook if the net is going to get 'faster'.

fustercluck
Jan 19, 2007, 12:11 AM
To avoid this issue, Apple should have:

1) Given the consumer the choice of taking the draft-N card or the g-card with whatever price differential is built in. If I can choose other BTO options, that wouldn't have been a big deal.

2) If they didn't want to do that, they should have either:

a) Included the draft-N cards as they did but offered to later send out a free driver/firmware update via Software Update to all customers
b) Built the machines with the .g card and lowered the price of the machine accordingly.

Again, I'm happy that they did choose #2a (well, half of it), but I'm not happy that they haven't been transparent about why the surprise charge (is it really an accounting issue? is it a regulatory issue? is it a fee they have to pay the Wireless Consortium or whatever group decides on wireless specs?)

Furthermore, as I stated, I'm more concerned about how this bodes in terms of future policy. I notice that every other germane example of "functionality upgrades" offered by various posters is promptly shut down by Apple toadies. Give me a break - I've been an Apple user since 1984 or so, but take off your blinders and look at this objectively.

If you aren't concerned at all that this kind of pricing might be an issue down the road not only for Apple but with other manufacturers, you're either too young to understand what a slippery slope is or you're too short-sighted to see where this could lead. Take a look at your next cable bill or cellphone bill if you want a possible look into the future of what nickeling and diming can snowball into.

Rant over.

tyroja00
Jan 19, 2007, 12:16 AM
They're not capitalizing anything. They're increasing support costs, paying transaction charges, and distribution, not to mention the creation of the website, all of which comes at the expense of other things they could be doing with their time and bandwidth. Yes, they'll probably be scraping a few cents of totally free profit from each of these transactions, but they could have used the time and effort to work on more lucrative and more extended revenue streams.

What increasing costs (really I don't know enough about the software, just the accounting)? I thought it was just a firmware update so that MacOS can recognize the "N" capabilities.

I mean Windows recognizes my card and I don't recall an update and I definitely didn't pay for it to Microsoft or any draft-N manufacturer.

They don't need a website (and I would be surprised if they had a dedicated draft N website) and they can autoupdate it to me, just like the security updates.

As for support, I pay for applecare and I don't see how me switching from using wireless G to wireless N is going to cost them more.

Oh, didn't we get Bootcamp for free. Because that greatly enabled my Mac with abilities that weren't sold to me at the time (before Bootcamp no Windows running smoothly, after Bootcamp smooth Windows performance relative to Parallels). More so than this wireless N. Like I said, I don't fault them for charging, just want them to be honest about it.

rjfiske
Jan 19, 2007, 12:17 AM
Not true.

The functionality exists in your machine when you made your purchase, it is just disabled in software. To say that it is completely non-existant, well then Apple may please refund me the difference in cost price of a wireless-G and N card please. Nobody told Apple to put a more expensive card without our permission.

I'm not understanding you... and I'm trying so bear with me. You shopped for, were told about, and bought an 802.11g machine. No mention of 802.11n capability when you bought it, yes? And you weren't expecting it, right?

It's capable of 802.11n speeds, with a software upgrade... a feature that was NOT listed when you purchased the machine. So where is the "refund" owed?

See my point? You bought something with certain specifics. The $1.99 fee has nothing to do with those specifics. Don't pay the fee and you do not lose a single capability that you have now. Again, I ask... where's the refund you're owed?

fustercluck
Jan 19, 2007, 12:41 AM
I'm not understanding you... and I'm trying so bear with me. You shopped for, were told about, and bought an 802.11g machine. No mention of 802.11n capability when you bought it, yes? And you weren't expecting it, right?

It's capable of 802.11n speeds, with a software upgrade... a feature that was NOT listed when you purchased the machine. So where is the "refund" owed?

See my point? You bought something with certain specifics. The $1.99 fee has nothing to do with those specifics. Don't pay the fee and you do not lose a single capability that you have now. Again, I ask... where's the refund you're owed?

The difference between what it costs to buy an n-card and a g-card. We paid for an n-card but only get g-functionality.

Imagine buying a machine advertised with a 100 GB hard drive, for which you paid $x. A week later, the manufacturer tells you that in reality it's a 200 GB drive, but for your machine half the write space has been disabled. New machines that are rolling off the manufacturing floor will allow the buyer to access the full 200 GB write space at the same price as your machine: $x. Lo and behold, you can unlock that "hidden" 100 GB if you pay for it. Your machine cost: $x + $y. Keep in mind that the "$y" portion of the cost essentially costs the manufacturer nothing.

Wouldn't you wonder why you paid $x for the 200 GB drive that the new machines have by default, but you can only access 100 GB of it?

Wouldn't you wonder why you have to pay $x + $y when the very same machine with the same hardware rolled out a week later only costs $x?

bartelby
Jan 19, 2007, 12:45 AM
Why are some of you people bitching about this!?!?!?!?!!?

The "n" spec was draft, therefore Apple weren't allowed to enable it. Now, by law, they have to charge a fee to enable it. $1.99 is ****** all!

Just think how you'd be bitching if Apple hadn't put in a card that only required a firmware upgrade. If you had to pay $70 for a whole new card.

Some of you people are NEVER happy, you HAVE to moan about something.
Why can't you just keep it to yourselves?

twoodcc
Jan 19, 2007, 12:49 AM
Translation: "We must make more money off of loyal customers."


yeah...i think i get it.....but.....i don't get it.....

iEdd
Jan 19, 2007, 12:51 AM
Wouldn't you wonder why you paid $x for the 200 GB drive that the new machines have by default, but you can only access 100 GB of it?

Wouldn't you wonder why you have to pay $x + $y when the very same machine with the same hardware rolled out a week later only costs $x?

If it was $y where y = 2, then yes I'd fork it over, it's a good deal.
I agree with bartelby. It's sad that anyone can possibly whinge about this. "Oo but I was advertised 802.11g". Good. #### off and use it, don't pay and don't upgrade. :rolleyes: :)
Blunt, but true. $2 is not much to pay on top of what you've already paid. My iMac is Core Duo and I'm stuck with G. I'd happily pay $2 to get N. I don't see the problem. :confused:

matticus008
Jan 19, 2007, 12:52 AM
To avoid this issue, Apple should have:

1) Given the consumer the choice of taking the draft-N card or the g-card with whatever price differential is built in. If I can choose other BTO options, that wouldn't have been a big deal.
A price differential of zero. They aren't going to change the retail price 50 cents to make up for a minor difference in components. That $1799 computer would have been $1799 with or without it.


a) Included the draft-N cards as they did but offered to later send out a free driver/firmware update via Software Update to all customers
You can't sell products on promised future functionality, especially if making such a claim would be premature.

b) Built the machines with the .g card and lowered the price of the machine accordingly.
Retail price wouldn't have moved a single cent. There's no economic disincentive to having it and not using it. The computer isn't more expensive without it; it's just marginally less profitable for Apple. They could have saved a few pennies by using a g-only card, but that wouldn't translate to customer cost savings.

rjfiske
Jan 19, 2007, 12:54 AM
The difference between what it costs to buy an n-card and a g-card. We paid for an n-card but only get g-functionality.

Imagine buying a machine advertised with a 100 GB hard drive, for which you paid $x. A week later, the manufacturer tells you that in reality it's a 200 GB drive, but for your machine half the write space has been disabled. New machines that are rolling off the manufacturing floor will allow the buyer to access the full 200 GB write space at the same price as your machine: $x. Lo and behold, you can unlock that "hidden" 100 GB if you pay for it. Your machine cost: $x + $y. Keep in mind that the "$y" portion of the cost essentially costs the manufacturer nothing.

Wouldn't you wonder why you paid $x for the 200 GB drive that the new machines have by default, but you can only access 100 GB of it?

Wouldn't you wonder why you have to pay $x + $y when the very same machine with the same hardware rolled out a week later only costs $x?

1.) no you paid for (and received) a g-card. You did NOT pay for an n-card. I disagree. Sorry.

2.) would I be upset if I had to pay to access the extra 100gb I didn't know about? Good question and that would depend on two things. Does the extra 100gb cost me $1.99 and is Apple required to charge me something for accounting purposes. If the answer is yes to both of those, then no I don't think I'd be upset.

I dont' think your analogy is a perfect one (what analogies are), but if the bottom line of this argument is that you're really upset about paying more for a machine than you have to, then I'd advise you complain about Apple earning ridiculously high margins for a machine you did buy rather than charge you a VERY minimal amount for a feature you didn't buy. We may just have to agree to disagree. :)

tyroja00
Jan 19, 2007, 12:59 AM
A price differential of zero. They aren't going to change the retail price 50 cents to make up for a minor difference in components. That $1799 computer would have been $1799 with or without it.


You can't sell products on promised future functionality, especially if making such a claim would be premature.

Retail price wouldn't have moved a single cent. There's no economic disincentive to having it and not using it. The computer isn't more expensive without it; it's just marginally less profitable for Apple. They could have saved a few pennies by using a g-only card, but that wouldn't translate to customer cost savings.

Hehe, well actually, according to Apple, it should be $1.99 cheaper, joking.

matticus008
Jan 19, 2007, 01:02 AM
What increasing costs (really I don't know enough about the software, just the accounting)? I thought it was just a firmware update so that MacOS can recognize the "N" capabilities.
By creating this program, they have created a number of costs they would not have otherwise had by simply ignoring the latent capabilities of the hardware. They will have to provide answers to phone support technicians, they've created an answers page about the upgrade, they'll have to provide technical support for installation issues (if any), they'll have to pay for the bandwidth used to send out these files, and all the other collateral consequences. Every resource expended in dealing with this is a resource that could have been put to better use doing something else. The opportunity cost of providing this update comes at the expense of doing other things. Even if the software were handed to them, they'd still have to spend a fair amount of money making it available. Obviously I agree it would have been best to avoid this entirely, but sometimes that's just not possible.

The analogies are poor. No other hardware feature yet mentioned here was ever added without being announced or reported in advance of its formal adoption in the past 4 years. Until an analogy can meet those criteria, this is wholly unbroken ground.

SeaFox
Jan 19, 2007, 01:12 AM
1.) no you paid for (and received) a g-card. You did NOT pay for an n-card. I disagree. Sorry.

I concur with this opinion 100%. To take it a step further, if you were out to buy a 802.11n card, fustercluck, why did you purchase a laptop with only a -g card inside? The actual make of the chipset was not known at the time of the product's release, it was only after people received theirs and started checking out Windows support on them that this -n support came to light, and even then Apple never stated that they were going to release an update or if they were if there was a charge.

There comes a point where newer technology costs less than older. Like looking for PC10 DIMMs today. Apple might have gotten a great deal on chip sets that happened to support -n when they were only looking for -g chip sets, now Apple must pay you a refund for crippling a product right from the beginning when they delivered the specs they promised?

To use another example, think of mid-level graphics cards that are built using the same PCB and components as high level cards, and can be given more pipes and higher pixel-shader support through simple soldering or other hardware hacks. Using your logic, if the graphics card maker made changes that prevented these hacks from working, they would now owe a refund to everyone who buys the second revision mid-level cards only to find they could not be hacked and they were now stuck with the same mid-level card they bought to begin with.

jimothys
Jan 19, 2007, 01:36 AM
This is how I understand it. Apple sold Core 2 Duo computers with 802.11n without advertising them as such and without it being functional. By law, they cannot charge for a component that is not advertised and cannot be used. So by charging a nominal fee now, they are simply covering themselves. They are legally claiming to have supplied the undisclosed cards for no extra cost and are charging to activate the functionality only once it has been made public.

ClimbingTheLog
Jan 19, 2007, 01:46 AM
This is a "hardware upgrade" on the theory that the entire device, CPU, firmware, accessories installed, together constitute the device.

No theory can make a software update a hardware upgrade. They are different things - hardware is made of silicon and metal - software is made of binary information. Some hardware has embedded software to provide a communications API. That's called firmware - it's a type of software.

It's good that words have real meaning, so we can communicate effectively.

If Apple were to sell this upgrade at a loss, it would incur the wrath of its investors, who already are not happy with its under-promised 2Q earnings.

Investors don't get excited about their companies pissing off significant portions of its user base. They've already made > 20% margins on these machines. Losing a dollar off that to keep the customers happy is totally worthwhile.

As an Apple Shareholder, I'd be happy to have Apple sell the firmware to the owners of these new expensive machines for $5 to settle the accounting issue and offer a $5 instant rebate on the purchase, as has been suggested on other sites in the past few days.

Those $5 rebates can be deducted from the marketing and customer relations budgets. If Apple choses to go the currently stated path and charge $2 and piss off a hundred thousand or so of it's customers it's going to make this shareholder wonder why they don't care about repeat sales which are worth far more than $5.

Really? Where on the specifications on your invoice or in the product information does it mention that?

The man pages describe all the 802.11n settings. If you went to an Apple Store to try out a machine before buying it and you understood how Mac OS X works and wondered about this feature it was right there for you to see.

1080p isn't a new material feature; it's just a new resolution (just like the iPod resolution bump). The XBox had HD support. If it hadn't had HD support at all, then they'd be in the same boat as Apple. There is no different specialized hardware needed for 1080 over 720--you're only pushing more pixels.

Conversely, to get 802.11n, you need different hardware and different software than for 802.11g.

The hardware for 802.11n is already there. We're talking about a firmware change - nobody is is getting a hardware upgrade here.

The resolution is actually a good analogy - both higher resolution and higher network speeds require a modification to the modulation of a signal and both increase the bandwidth of the signal - which is why you typically need new hardware to support things like these. HD support in your example is analogous to 802.11 support - both standards have low-data-rate (720p and g) and high data rate (1080i and n) variants. 1080i is likely to require a deinterlacing filter, just as 802.11n is likely to require additional firmware processing.

Because I can think of a couple of creative accounting treatments that I would accept as their auditor that do not require charging customers. It seems that this is a sly runaround with a little bump to the cash flow.

OK, we're waiting with suspense. :)

The actual make of the chipset was not known at the time of the product's release, it was only after people received theirs and started checking out Windows support on them that this -n support came to light, and even then Apple never stated that they were going to release an update or if they were if there was a charge.

Did he say he bought his machine immediately after release? I know I waited a little while to get mine until it was confirmed that the machines had 802.11n-ready wireless chips in them. And by making BootCamp with drivers, Apple is giving the users the means to determine the true nature of the hardware.

dalvin200
Jan 19, 2007, 02:04 AM
is this fee only for the US?
cos i seem to recll that the Sarbanes Oxley ruling is US only...?

:confused:

bousozoku
Jan 19, 2007, 02:12 AM
BUT will it unlock 802.11a as well? If so 1.99 isn't bad.



for those who dont accidentially find it on the webs

Is the networking hardware inside the computers capable of 802.11a or is it just the AirPort Extreme box?

It's probably not a good idea to find the update on the web. You never know if it's been changed.

tyroja00
Jan 19, 2007, 02:15 AM
By creating this program, they have created a number of costs they would not have otherwise had by simply ignoring the latent capabilities of the hardware. They will have to provide answers to phone support technicians, they've created an answers page about the upgrade, they'll have to provide technical support for installation issues (if any), they'll have to pay for the bandwidth used to send out these files, and all the other collateral consequences. Every resource expended in dealing with this is a resource that could have been put to better use doing something else. The opportunity cost of providing this update comes at the expense of doing other things. Even if the software were handed to them, they'd still have to spend a fair amount of money making it available. Obviously I agree it would have been best to avoid this entirely, but sometimes that's just not possible.

The analogies are poor. No other hardware feature yet mentioned here was ever added without being announced or reported in advance of its formal adoption in the past 4 years. Until an analogy can meet those criteria, this is wholly unbroken ground.

I disagree some of these analogies are pretty good such as,

1) DVD single layer DVD-burners that were later updated to double layer when the standards were completed.

2) Resolution upgrades.

3) Bootcamp adding full Windows functioning for free.

Heck, just search out some of the details of the latest Tiger updates and they are full of "now you can..." and "added the ...". What else do you want as a comparison?

When Draft-N came out, Asus even released early and gave their customers a guarantee that it would work on future final N systems. Apple could have did that.

Anyway, you push it, Apple does not have to charge us for this. I DON"T CARE IF THEY DO!!! But, they are not forced by law to charge us. They are charging us so that they either can make a profit or not incur additional cost and that is all that I was saying.

is this fee only for the US?
cos i seem to recll that the Sarbanes Oxley ruling is US only...?

:confused:

Maybe I have been out of accounting too long (seriously). How does this pertain to Sarbanes Oxley?

weckart
Jan 19, 2007, 02:48 AM
Originally Posted by dalvin200
is this fee only for the US?
cos i seem to recll that the Sarbanes Oxley ruling is US only...?

Apple is a US company that reports to the SEC on its worldwide earnings - ergo no free pass for customers outside of the US. Sorry, but you must have realised by now from all of the worldwide grousing that all foreign subsidiary companies of US concerns and, indeed, all non-US entities that are listed in the US have to comply with SOx. In fact, any company anywhere with 300+ US shareholders is similarly affected.


Maybe I have been out of accounting too long (seriously). How does this pertain to Sarbanes Oxley?

You could try reading this thread. It is not as if there are hundreds of pages to wade through. Yet.

A lot of wailing and gnashing of teeth over $1.99 to unlock a functionality which has absolutely no value whatsoever unless you spend even more money on an N-capable router. With the spec being draft at present, who knows whether interoperability is even an option. It may very well be the case that N-speeds are only achieved with Apple's own router, in which case the firmware upgrade fee is moot.
I am certainly going to wait until Tom's Hardware/other guinea pigs report back on their findings before rushing out to spend any money on the upgrade.

For those who still harbour a moral objection to paying out anything for the unlock, it will be on torrent sites/rapidshare within seconds of being released. Apple will not care in this instance. Apple seems to feel obliged by their accountants to recognise this as a product sale rather than an software upgrade, but the price clearly demonstrates that Apple does not regard it as a revenue stream and is merely complying with the letter of the law.

boer
Jan 19, 2007, 02:55 AM
Apple pocketed $1 Billion last quarter alone. If they have to conform to this law, then why don't they charge 1 cent like others have suggested? I agree with others who have said $1.99 won't add much to their bottom line. So why bother? Charge a symbolic 1 cent to conform with the law, and don't piss off your loyal userbase, Apple.

It costs more than 1 cent to even handle the actual payment. I am sure it is out of question that Apple would this at their expense. After all, they did not sell anyone the promise of 802.11n so everyone should get over the fact that this upgrade is not a free meal.

matticus008
Jan 19, 2007, 03:02 AM
No theory can make a software update a hardware upgrade.
Insofar as accounting is reality-agnostic, that's not strictly true. Software is acting as a proxy for the combination of hardware + software in this situation. It does not depict the actual sequence of events as observed externally, but that has never been the issue here.

Losing a dollar off that to keep the customers happy is totally worthwhile.
Not if it's not an option available to you. In order to report new functionality in products you've already shipped, you have to distribute same externally. That means you must take in new revenue to report an upgrade. There is no such thing as a free lunch. The rebate idea is an interesting one, however, with some potential merit to it, but again, processing the rebate would then become an issue. It couldn't be an instant rebate, because then there would be no transaction. Retail stores can do instant rebates, but that's because they recognize the revenue from the manufacturer. Apple can't do that any more than it can just shift money around internally at this point (that ship sailed some time ago).
If Apple choses to go the currently stated path and charge $2 and piss off a hundred thousand or so of it's customers it's going to make this shareholder wonder why they don't care about repeat sales which are worth far more than $5.
They've no right to be pissed off. They were never offered any functionality beyond the face value of the specifications they agreed to accept in exchange for money. I'd be more annoyed that they caved to a bunch of whining idiots.

The man pages describe all the 802.11n settings.
The man pages describe 802.11n settings without making any assumption about whether you have the appropriate hardware. Man pages are the same for all hardware configurations; they're not dynamically modified by your machine. It's a manual for software use, not for hardware features.

The hardware for 802.11n is already there.
Not officially. That's the whole problem. From the perspective of the paper trail, customers suddenly have new hardware. Apple has to find a way to update its hardware features without admitting to a material misstatement. That means writing the n-mode off as a paid, feature upgrade.

The resolution is actually a good analogy - both higher resolution and higher network speeds require a modification to the modulation of a signal and both increase the bandwidth of the signal - which is why you typically need new hardware to support things like these.
No, it's not. 802.11n is more than added bandwidth. The real capacity of 802.11g chipsets is adequate for 802.11n, but you can't upgrade .11g cards to .11n. They have to have specialized .11n hardware in them. You don't need any specialized hardware for new resolutions, you just need enough throughput to drive the pixels.


1) DVD single layer DVD-burners that were later updated to double layer when the standards were completed.
That's not an accurate reflection of the series of events. I recall that dual-layer standards were finished long before any of the drives were available, and that certain drives manufactured subsequently were simply made compatible with the media, just as periodic ROM updates add compatibility for new types. They were always capable of focusing on multiple layers, there just wasn't any media available for it.

3) Bootcamp adding full Windows functioning for free.
Bootcamp is purely software.

When Draft-N came out, Asus even released early and gave their customers a guarantee that it would work on future final N systems. Apple could have did that.
No, because Asus released its products with draft-n drivers. They worked out of the box and were assured that customers would have final n-support. Apple, on the other hand, had no software at shipping time, so it could not have made the same commitment. You can't ship a product with an advertised feature that doesn't work. Asus draft-n cards worked immediately at draft-n performance. Apple's hardware was ready before the software.

But, they are not forced by law to charge us.
They believe they are, or they wouldn't be doing this. You have no demonstrated any reason why it's not required by law, while myself and several others have elucidated why a strict interpretation of the law would motivate this series of actions. There is always a possibility that they could not charge and not get caught, but step one of risk management is risk avoidance.

scott523
Jan 19, 2007, 03:24 AM
$1.99 isn't that bad. It's cheaper than my high school lunch. On the other hand, it would mean paying this fee and buying a router that sports draft N capability. I'm still reluctant to buy the new Airport Extreme base station because (a) my 3 year old Linksys router didn't die yet and (b) the Airport Extreme is a bit too pricey for me.

bobnugget
Jan 19, 2007, 04:37 AM
is there some problem here? i think your statement is a bit out of hand. $1.99 isn't exactly much worth complaining about.

OK, So I spent £1500 on a Mac Book Pro, and now they want more money to install a hardware driver on it! Yeah it is worth complaining about. Imagine if Microsoft started charging $1.99 for Windows XP SP2 (which added a load of security features). What if ATI & Nvidia started charging $1.99 when they upgrade their graphics drivers? It shouldn't work.

Maybe the iPhone cost more than Jobs thought it would do! I sincerely hope that everyone gets this file from BitTorrent or Rapidshare as it is pure greediness on Apple's part. They have to charge for it? Oh no, why isn't it $0.01 then. It took time to develop? Then why give it for free with an Airport, or why not include it in the Leopard development costs. I'm sure it will be included with Leopard.

I like Apple's products, but their greediness (and the amount people put up with it), often amazes me.

bartelby
Jan 19, 2007, 04:42 AM
OK, So I spent £1500 on a Mac Book Pro, and now they want more money to install a hardware driver on it! Yeah it is worth complaining about. Imagine if Microsoft started charging $1.99 for Windows XP SP2 (which added a load of security features). What if ATI & Nvidia started charging $1.99 when they upgrade their graphics drivers? It shouldn't work.

Maybe the iPhone cost more than Jobs thought it would do! I sincerely hope that everyone gets this file from BitTorrent or Rapidshare as it is pure greediness on Apple's part. They have to charge for it? Oh no, why isn't it $0.01 then. It took time to develop? Then why give it for free with an Airport, or why not include it in the Leopard development costs. I'm sure it will be included with Leopard.

I like Apple's products, but their greediness (and the amount people put up with it, often amazes me).


It's not Apple's choice to have to charge you!!!!

bobnugget
Jan 19, 2007, 04:50 AM
It's not Apple's choice to have to charge you!!!!

So, how come apple don't have to charge to add Gapless playback, longer battery life & 640x480 video support to the video iPod? :confused: Surely they can get in trouble for that too? Or perhaps there would have been a load of bad publicity if they had said "These new iPods are the same as the old ones, but the old owners will have to pay to get the extra facilities".

Also, and probably not such a good example, how does this work with them selling the 1.5Ghz G4 Mac Minis as 1.42 Ghz ones? Surely that is an unadvertised upgrade too?

To be honest, the mood this whole debate is getting me into reminds me of: http://imgs.xkcd.com/comics/perspective.png,

so I should probably shut up now :)

white pilgrim
Jan 19, 2007, 05:17 AM
Coupla matters, please advise.

Isn't n still a draft standard? From the time the C2D Macs shipped till now, I hadn't noticed news of a new released 802.11 published spec, only draft. This is to help me understand all the arguments previously about the state of n-spec being the issue in this episode. There are other corps shipping notebooks with draft-n cards before sweet Apple but you don't hear of a fee, difference i could see is that they advertised the card.

So, I get the feeling its just really about audit hoops?

Finally, if the fee is to cover for my C2D MBP, why are they giving the patch free with the new base station? Not everyone who gets the base station owns a recent intel mac, or just mac or even an n-enabled card (it is backwards compatible with g), so theres not much of a diff if they just bundled it with Leopard too right?

Anyway, i'll just pay fer that when its time, if i still have to by the time my g router fries.

matticus008
Jan 19, 2007, 05:44 AM
So, I get the feeling its just really about audit hoops?
Exactly.
so theres not much of a diff if they just bundled it with Leopard too right?
I wouldn't be surprised if it's built in to Leopard, so yeah, I wouldn't worry about it...not to mention it'll be all over the Internets within minutes of its release anyway, and I doubt Apple cares even a little whether people share this with each other. It's clear that they're just doing it to say they've done it.

SciTeach
Jan 19, 2007, 06:42 AM
First off.....awesome thread! There is a lot more interest in this topic than I would have ever imagined.

B: I am fortunate enough to wait until the C2D came out for the MacBook before I bought one and I can get the upgrade. I guess I will have to go and return soda bottles for deposit, go to the recycling center with some aluminum cans and get 15 to 20 cents per pound for them. Walk around a couple of grocery store parking lots and find some loose change on the ground (PENNIES!!) and I'll do this riding my bike instead of spending money for a gallon of gas. I will overall spend less time doing that and getting my $1.99 for the upgrade than complaining about the cost of it.

My 2 cents (whoops...need to go find 2 more pennies for the upgrade;) )

asrai
Jan 19, 2007, 06:53 AM
oh good grief, are we now complaining because Apple is charging the price of a couple of iTunes songs simply because it has to? This isn't a money-making scheme. This isn't a screw-job to loyal customers.

It's a compliance issue. If it was anything other than this, the fee would still be imposed (because again it has to) but it wouldn't be $1.99, it'd be higher. Don't forget if you have one of these 802.11n capable machines, the fee is NOT so you can use it as you are now. The fee isn't to give you functionality that existed when you purchased your machine under previous pretenses. It's to give you the abililty to use it in a NEW, better, faster (albeit unadvertised) way. You are losing nothing by not paying the fee. You are gaining something by paying the fee. I don't see the problem.


... and there you have it. Well put!!!

iW00t
Jan 19, 2007, 07:17 AM
OK, the computer costs over one thousand whatevers and you get benefits for <£2. Just get over it.


It is not a matter of <$2 or <$0.01. It is a matter or principle. Why, the way I see it this Sarbane-Oxley or whoever that ox ******** guy is, is really a extremely lucrative cash cow.

What's next?

EFI update: mandatory for boot camp support - $5.
Improved power saving firmware - $15.
Fixes so and so bugs - $5

Well when you bought your computer Apple didn't expressedly imply that the loaded software has no bugs. It was presented as it is in the showroom, you came, looked at it, didn't notice any bugs and money exchanged hands at that junction. Subsequently you found the bug and it is affecting your user experience, but Apple cannot provide you with unrealised user experience for free!

If this line of reasoning is extended to everything else it is the beginning of some very dark times.

Okay, but your refund would be $0.00. They would have charged the same amount for the computer regardless. Apple's pricing is at fixed points and an extra dollar somewhere doesn't change the bottom line at the store.


Oh yeah. I forgot Mac retail prices reflect some fictitious figure coined up by some person who spent a few years in business school and have no actual correspondence to reality, thanks for clearing this up.

I propose Apple should just strip their current line into 3 models:

Mac
Portable Mac
Extra portable Mac

Retailing at $5,000, $3500, and $2000 respectively. Each model is speced to perform at 1ghz, 500mhz, and 300mhz for up to 2 hours daily. Additional usage time can be unlocked for $0.10 per hour or $1 for an entire day, and additional clock speed can be unlocked for $1000 per 100mhz. SMP support can be unlocked for a mere $2500, $1500, and $1000 respectively (hey you are getting TWICE the advertised processor!).

Yeah, that is exactly what Apple is doing with the Airport. Shipping crippled hardware, which we paid for, and charging us again to unlock it.

That we know nothing of said hardware is absolutely irrelevant.

macenforcer
Jan 19, 2007, 07:44 AM
oh good grief, are we now complaining because Apple is charging the price of a couple of iTunes songs simply because it has to? This isn't a money-making scheme. This isn't a screw-job to loyal customers.

It's a compliance issue. If it was anything other than this, the fee would still be imposed (because again it has to) but it wouldn't be $1.99, it'd be higher. Don't forget if you have one of these 802.11n capable machines, the fee is NOT so you can use it as you are now. The fee isn't to give you functionality that existed when you purchased your machine under previous pretenses. It's to give you the abililty to use it in a NEW, better, faster (albeit unadvertised) way. You are losing nothing by not paying the fee. You are gaining something by paying the fee. I don't see the problem.




Wow. Some people will believe anything.

If you all REALLY believe that apple HAS TO charge for this feature then you all are far more gone than I thought.

Geez. If it has to charge a dollar amount they can charge us 1 cent. A charge to enable hardware I already own is a scam and should not be tolerated. I will not pay for it on principle and if that means surfing slower or whatever so be it.

Consumers have the power. USE IT and stop bending over ok.

iW00t
Jan 19, 2007, 07:49 AM
Wow. Some people will believe anything.

If you all REALLY believe that apple HAS TO charge for this feature then you all are far more gone than I thought.

Geez. If it has to charge a dollar amount they can charge us 1 cent. A charge to enable hardware I already own is a scam and should not be tolerated. I will not pay for it on principle and if that means surfing slower or whatever so be it.

Consumers have the power. USE IT and stop bending over ok.

Save it. You are preaching to a bunch of Think Different folks. People who think differently. Bending over and taking it in the rear end is highly subjective. If you think different you might even like it.

bobnugget
Jan 19, 2007, 07:59 AM
The analogies are poor. No other hardware feature yet mentioned here was ever added without being announced or reported in advance of its formal adoption in the past 4 years. Until an analogy can meet those criteria, this is wholly unbroken ground.

How about this one :D , where Apple shipped items as one thing, but supplied a better one. Seems about right to me...
here (see also ThinkSecret link) (http://www.macrumors.com/pages/2005/09/20050927175229.shtml)

Double VRAM, faster chip, BlueTooth 2.0 EDR instead of 1.1 (hmm that's even a new wireless standard, dude!), better DVD burner and a faster HD. Packed in the box and not mentioned, as a free upgrade...

Digitalclips
Jan 19, 2007, 08:36 AM
If anyone doesn't want to shell out a couple of $s they don't have to, don't update. I am happy to, remember the days of 'Free plus Post and Packing' ... ?

Wow. Some people will believe anything.

If you all REALLY believe that apple HAS TO charge for this feature then you all are far more gone than I thought.

Geez. If it has to charge a dollar amount they can charge us 1 cent. A charge to enable hardware I already own is a scam and should not be tolerated. I will not pay for it on principle and if that means surfing slower or whatever so be it.

Consumers have the power. USE IT and stop bending over ok.

Hey, just don't buy it OK? Geez, ... no one is forcing you, stay at g. You got what was advertised at the time you purchased at the price you paid.

Many, many companies over the years sold hardware or software that locked out additional features. Media 100 for example. Pay an additional $4,000 / $6,000 or more for the next level of features that was in the hardware and software you already had. It saved them shipping all new stuff and you could do this quickly with a new patch or even password (I honestly don't recall which now). Seems a similar situation to me and you are griping about two bucks! Again I say ... you don't have to if you don't want to!

fustercluck
Jan 19, 2007, 08:54 AM
1.) no you paid for (and received) a g-card. You did NOT pay for an n-card. I disagree. Sorry.

2.) would I be upset if I had to pay to access the extra 100gb I didn't know about? Good question and that would depend on two things. Does the extra 100gb cost me $1.99 and is Apple required to charge me something for accounting purposes. If the answer is yes to both of those, then no I don't think I'd be upset.

I dont' think your analogy is a perfect one (what analogies are), but if the bottom line of this argument is that you're really upset about paying more for a machine than you have to, then I'd advise you complain about Apple earning ridiculously high margins for a machine you did buy rather than charge you a VERY minimal amount for a feature you didn't buy. We may just have to agree to disagree. :)

1) I don't give a **** if you disagree or not, you're wrong. I paid for an N card the proof of which is that I have a ****ing N card in my computer. The fact that it was disabled by Apple is another issue entirely. Or are you trying to tell me that Apple paid g. card prices to its n. card distributor? Are you daft? By that logic a CD chip costs the same as a C2D chip but as we all know there is a premium for the latter. Why on earth (and by what proof, more importantly) are you claiming that an .n card costs the same as a .g card?

2) I still haven't heard that this is definitely an accounting issue. If Apple says that's the case, I would accept that. But they haven't. Until that time, I'm slightly pissed off but more importantly I am concerned what this means in the future regarding their "functionality upgrade" policies.

Some of you people don't get the point. Let me rephrase that: most of you people don't get the point. It's not about paying "only $2, stop your whining." You same idiots will be here complaining when, next year, you have to input your credit card # to get that next Software Update because people like me have grown tired of speaking up and being told to shush.

fustercluck
Jan 19, 2007, 09:01 AM
I concur with this opinion 100%. To take it a step further, if you were out to buy a 802.11n card, fustercluck, why did you purchase a laptop with only a -g card inside? The actual make of the chipset was not known at the time of the product's release, it was only after people received theirs and started checking out Windows support on them that this -n support came to light, and even then Apple never stated that they were going to release an update or if they were if there was a charge.

There comes a point where newer technology costs less than older. Like looking for PC10 DIMMs today. Apple might have gotten a great deal on chip sets that happened to support -n when they were only looking for -g chip sets, now Apple must pay you a refund for crippling a product right from the beginning when they delivered the specs they promised?

To use another example, think of mid-level graphics cards that are built using the same PCB and components as high level cards, and can be given more pipes and higher pixel-shader support through simple soldering or other hardware hacks. Using your logic, if the graphics card maker made changes that prevented these hacks from working, they would now owe a refund to everyone who buys the second revision mid-level cards only to find they could not be hacked and they were now stuck with the same mid-level card they bought to begin with.

Like I said, I wouldn't have minded being given g functionality if I were charged for a g card. I paid for an n card. Is that really so hard to understand?

I'm arguing on principle here. Between the "it's only $2, stop complaining" camp and the "you paid for a g card" camp, I'm starting to lose faith in humanity's ability to use logic and reason.

For the last time: I paid for n hardware. I was promised g functionality and currently have g firmware/software, but somewhere in the final cost of my machine, there is payment for a physical N card.

NightStorm
Jan 19, 2007, 09:04 AM
The funniest thing about this whole situation: the same people bitching about spending $2 for n-capabilities would be bitching that they would have to shell out $70 or so for a whole new Airport card (or worse, that their iMac was now "obsolete"), and that they should have used n-capable chipsets in the first place.

This practice isn't all the uncommon.

fustercluck
Jan 19, 2007, 09:08 AM
The funniest thing about this whole situation: the same people bitching about spending $2 for n-capabilities would be bitching that they would have to shell out $70 or so for a whole new Airport card (or worse, that their iMac was now "obsolete"), and that they should have used n-capable chipsets in the first place.

This practice isn't all the uncommon.

Welcome from the hallowed halls of "I missed the point entirely."

Rocketman
Jan 19, 2007, 09:10 AM
No theory can make a software update a hardware upgrade. They are different things - hardware is made of silicon and metal - software is made of binary information. Some hardware has embedded software to provide a communications API. That's called firmware - it's a type of software.

It's good that words have real meaning, so we can communicate effectively.


This seems to be an accounting issue. Accounting is an art more than a science, which makes it odd they criminalize the smallest of errors. It has to do with how they DECIDED to treat FIRMWARE when they initiated the accounting process on Macintosh computers. Aparently Apple CHOSE to treat firmware as a part of the hardware.

I really think it is that simple.

The complicating factor is the computers shipped with "draft-N" hardware, and the firmware AND the software was not yet fully baked, and I am sure Apple wants the cards to be as compliant with future-N as possible whenever they do deploy the final pieces to the puzzle so they waited for deployment for more testing.

However as I have now said a couple of times, this is only one layer of the issue. Yes they are doing it because of accounting. Bush went into Iraq over regime change and WMD too. It seems Apple is also testing the waters for consumers to become accustomed to post delivery feature upgrades for a fee. It appears iPhone (ATN) is going to have hardware features on deployment that are NOT activated. Later on, it appears Apple will offer consumers the capability to activate features for a fee. Perhaps for more than $1.99 :)

Rocketman

ClimbingTheLog
Jan 19, 2007, 09:23 AM
I paid for an N card the proof of which is that I have a ****ing N card in my computer, you idiot. The fact that it was disabled by Apple is another issue entirely.

This is a really important point. The same card that Apple is shipping was being shipped by other vendors when Apple started using it. The other vendors included the draft-n firmware whereas Apple included the firmware that prevented recognition of draft-n capabilities. So in a very real sense, fustercluck is right, it was crippled ("disabled").

This seems to be an accounting issue. Accounting is an art more than a science, which makes it odd they criminalize the smallest of errors. It has to do with how they DECIDED to treat FIRMWARE when they initiated the accounting process on Macintosh computers. Aparently Apple CHOSE to treat firmware as a part of the hardware.

I really think it is that simple.

If the law says you can treat cattle as horses when you're doing accounting, by just deciding to do so, then that really is an insane art. Which I propose has no place in a numeric tracking system. At least there if you start to believe your own fabrications you'll find your breeding program isn't as successful with your short fat spotted horses.

MikeTheC
Jan 19, 2007, 09:27 AM
The funniest thing about this whole situation: the same people bitching about spending $2 for n-capabilities would be bitching that they would have to shell out $70 or so for a whole new Airport card (or worse, that their iMac was now "obsolete"), and that they should have used n-capable chipsets in the first place.

This practice isn't all the uncommon.

That isn't my read on this issue.

"Back in the day" they put slots in everything (from the last of the OldWorldROM black PowerBook G3s to the clamshell iBooks to the B&W G3 towers, and everything forward of that) for Airport cards, but the cards themselves were not included. In other words, it was a fully legitimate "future expandability", not some minor feature bump.

Apple's already placed cards in their computers which are nominally capable of 802.11n. They're already there. And they're even making people aware the cards are there and contain this intrinsic capability. But now they're charging extra to further utilize a hardware component you already purchased. And the important distinction here is that *you own the card*. It isn't Apple property anymore. You're also not using it with an Apple service (for that matter, Apple doesn't provide a WiFi service.)

It would be exactly the same thing as if I bought a broom but had to pay the manufacturer extra if I wanted to sweep orange dirt in addition to black and brown dirt, given that the broom was already capable of doing so.

Or more to the point: Apple's asking us to pay them to remove a restriction they placed on their own product who's only intent was a revenue generator.

I don't know if this is illegal, but I would regard it as being undesirable.

And yes, if Apple pursues this kind of behavior in the future, it is going to cost them customers. After all, of all the customers in the world, none can be more aware than Apple customers that there are alternatives to the technology products they're using.

phillipjfry
Jan 19, 2007, 09:31 AM
The explanation for the fee is reminiscent of an explanation previously given to iLounge. However, the explanation does not fit well with many of Apple's previous practices. For example, in May Apple updated [url="http://www.macrumors.com/pages/2006/05/20060515170303.shtml"]iWeb to version 1.1 (http://www.macrumors.com) which added a host of commonly-requested features at no charge.

It is because you are paying for software that enables you to access more HARDWARE features, not software. It's just an accounting kinda thing and is nothing I would bat an eye at in terms of "being robbed".

edit: i didn't read anything above this post so if someone already argued against/for this claim sorry in advance :)

Gasu E.
Jan 19, 2007, 09:38 AM
Translation: "We must make more money off of loyal customers."

The overhead of collecting $1.99 will exceed the revenue. But you would have answered the same if the charge had been $.01, right?

ClimbingTheLog
Jan 19, 2007, 09:45 AM
It is because you are paying for software that enables you to access more HARDWARE features, not software. It's just an accounting kinda thing and is nothing I would bat an eye at in terms of "being robbed".

It's ironic how Apple claims to be all about the user experience when it comes to its hardware and software, but when it comes to charging for it, it's all about <stuffy voice>You see, there are considerations on Sarbanes-Oxley about how one reflects revenue for partially delivered products in various corners and when revenue is recognized for said quasi components of said products</stuffy voice>

The might be good at hiding the implementation for their customers when it comes to applications, but they really suck at it when it comes to corporations. The VP of Platform Experience should be hearing about this.

Gasu E.
Jan 19, 2007, 10:04 AM
I still contend this is bs, but if Apple wanted to stave off some of the displeasure, they could have offered a one-liner in that press release as to why they are charging at all.

I'm not concerned about paying $2, but if this is going to be a recurring thing in the future, I really want to know now. If Apple's M.O. going forward will be nickel and diming users, I'm going to lose interest in Apple products very quickly. If this is a one-time thing, fine, but explain the logic, Apple.

They DID. It is an accounting requirement. You can't legally recognize revenue until you ship the complete product. The product Apple claimed to be shipping to you (and thus legally the "complete" product) was only 'b/g'. If they now said "this was really a half-done 'n'", then they are saying (legally) they improperly recognize hundreds of millions of dollars previously. Result: major income restatement, stock goes through floor, investors rebel, Steve maybe forced to resign. Major restatements are very, very bad for stock prices.

If they had originally said "we are selling you a half-done 'n' product", then they could not report the corresponding revenue as current; theiir earnings would have been crap, so stock tumbles, etc. Plus they would have been promising a "future"; if they stumble, they would be terribly vulnerable to a class-action suit.

They COULD have waited and bundled it with another charged-for product. But then you would have had to wait, and you would have had to buy the other product to get this feature.

tyroja00
Jan 19, 2007, 10:05 AM
Apple is a US company that reports to the SEC on its worldwide earnings - ergo no free pass for customers outside of the US. Sorry, but you must have realised by now from all of the worldwide grousing that all foreign subsidiary companies of US concerns and, indeed, all non-US entities that are listed in the US have to comply with SOx. In fact, any company anywhere with 300+ US shareholders is similarly affected.




You could try reading this thread. It is not as if there are hundreds of pages to wade through. Yet.

A lot of wailing and gnashing of teeth over $1.99 to unlock a functionality which has absolutely no value whatsoever unless you spend even more money on an N-capable router. With the spec being draft at present, who knows whether interoperability is even an option. It may very well be the case that N-speeds are only achieved with Apple's own router, in which case the firmware upgrade fee is moot.
I am certainly going to wait until Tom's Hardware/other guinea pigs report back on their findings before rushing out to spend any money on the upgrade.

For those who still harbour a moral objection to paying out anything for the unlock, it will be on torrent sites/rapidshare within seconds of being released. Apple will not care in this instance. Apple seems to feel obliged by their accountants to recognise this as a product sale rather than an software upgrade, but the price clearly demonstrates that Apple does not regard it as a revenue stream and is merely complying with the letter of the law.

What I mean is what section of SOX does this relate to? I do not recall a section of SOX dealing with recognition of deferred revenues that can subsequently require a nominal charge to customers. One member stated EITF 00-12 and SOP 97-2, which does deal with revenue recognition, but those are not SOX.

Gasu E.
Jan 19, 2007, 10:09 AM
It's ironic how Apple claims to be all about the user experience when it comes to its hardware and software, but when it comes to charging for it, it's all about <stuffy voice>You see, there are considerations on Sarbanes-Oxley about how one reflects revenue for partially delivered products in various corners and when revenue is recognized for said quasi components of said products</stuffy voice>

The might be good at hiding the implementation for their customers when it comes to applications, but they really suck at it when it comes to corporations. The VP of Platform Experience should be hearing about this.

Right... if they are really about "user experience", they should chuck accounting, 'cause it's way too boring. :rolleyes:

fustercluck
Jan 19, 2007, 10:11 AM
They DID. It is an accounting requirement. You can't legally recognize revenue until you ship the complete product. The product Apple claimed to be shipping to you (and thus legally the "complete" product) was only 'b/g'. If they now said "this was really a half-done 'n'", then they are saying (legally) they improperly recognize hundreds of millions of dollars previously. Result: major income restatement, stock goes through floor, investors rebel, Steve maybe forced to resign. Major restatements are very, very bad for stock prices.

If they had originally said "we are selling you a half-done 'n' product", then they could not report the corresponding revenue as current; theiir earnings would have been crap, so stock tumbles, etc. Plus they would have been promising a "future"; if they stumble, they would be terribly vulnerable to a class-action suit.

They COULD have waited and bundled it with another charged-for product. But then you would have had to wait, and you would have had to buy the other product to get this feature.

I don't know how I missed that, but wow, I really screwed up. Subject closed for me.

(Unless this kind of thing is going to be a regular practice.)

Gasu E.
Jan 19, 2007, 10:12 AM
What I mean is what section of SOX does this relate to? I do not recall a section of SOX dealing with recognition of deferred revenues that can subsequently require a nominal charge to customers.

That's just plain old GAAP. You can't recognize revenue on something you haven't shipped. I learned that back on the second day of my business school accounting class, many years before SOX.

Gasu E.
Jan 19, 2007, 10:16 AM
I don't know how I missed that when I skimmed the statement the first time, but wow, I really screwed up. Rant over.

Yeah, I thought you sounded too thoughtful and rationale to come up with those conclusions! It was easy to miss the facts in all the noise. :)

tyroja00
Jan 19, 2007, 10:16 AM
That's just plain old GAAP. You can't recognize revenue on something you haven't shipped. I learned that back on the second day of my business school accounting class, many years before SOX.

That's right. That's why I don't know why people are quoting SOX.

dejo
Jan 19, 2007, 10:16 AM
Just an FYI:

Apple explains 'nominal fee' to activate 802.11n (http://www.macworld.com/news/2007/01/18/80211nfee/index.php)

“The nominal distribution fee for the 802.11n software is required in order for Apple to comply with generally accepted accounting principles for revenue recognition, which generally require that we charge for significant feature enhancements, such as 802.11n, when added to previously purchased products,” said Teresa Brewer, Apple’s Mac hardware public relations manager.

vitaboy
Jan 19, 2007, 10:22 AM
For the last time: I paid for n hardware. I was promised g functionality and currently have g firmware/software, but somewhere in the final cost of my machine, there is payment for a physical N card.

For the last time, in terms of accounting, you did not pay for n hardware. You may not like it, but Apple sold the machine to you as having 802.11b/g hardware, and you handed Apple your credit card based on those specs. It doesn't matter if it was later discovered that the underlying hardware was n-capable.

An analogy that hasn't been used is the electronic engine controllers in cars today. The performance or horsepower you get out of that engine is determined in large part by the electronic computer that monitors the timing and fuel injection in the engine. Many cars today have firmware that limits the horsepower of that engine.

So when you buy a car from Ford or Lexus, you pay for a car that is advertised at a certain horsepower, whether it's 120 hp or 300 hp. Never mind that fact that there is an aftermarket business in ETC firmware that allows you to boost horsepower by replacing the factory software with a custom one designed to operate the engine that a higher capacity.

By your logic, the car company ripped you off because you bought a car that was advertised and sold to you as 120 hp even though nearly all engines today are capable of outputting much more than factory specs simply by using different engine timings and fuel injections, via a simple software upgrade.

Here's another example - Microsoft Vista. Vista has something like 6 different versions, everything from a Home Basic version to Ultimate. Yet even if you buy the basement, relatively featureless Home Basic version for $199, guess what? The Home Basic installation has all the features of Ultimate, but disabled. By sending Microsoft a couple of hundred dollars, you can instantly upgrade Home Basic to Ultimate without needing a new set of installation discs.

Again, by your logic, since your Home Basic installation came with all the features of Ultimate on the disc (but disabled), Microsoft should be taken to task for not offering Home Basic users the ability to upgrade to Ultimate for free, because all that software was already on the installation discs when you bought it.

By your logic, Microsoft ripped you off and deceived you when it sold you Vista Home Basic for $199 because you were really buying Vista Ultimate that had been downgraded to Home Basic.

Sorry to say, but no one is going to believe you if you try to claim that. If you bought Home Basic, that's what you bought because that's what Microsoft advertised that it was selling to you for $199. It doesn't matter if the Home Basic installation can be instantly upgraded to Ultimate features, you paid for the features that were advertised, not the Ultimate parts that were hidden and disabled in Home Basic.

The difference is, Apple is charging a measly $2.00 for enabling 802.11n capability. To make you happy, Apple should just shipped all C2D Macs with straight 802.11b/g AirPort cards, and then offered to charge everyone $100 to physically swap those cards with new 802.11b/g/n cards.

All I have to say is, with that kind of attitude, you are going to be seriously unhappy for the rest of your life (as you are now, apparently).

revman
Jan 19, 2007, 10:23 AM
What I mean is what section of SOX does this relate to? I do not recall a section of SOX dealing with recognition of deferred revenues that can subsequently require a nominal charge to customers. One member stated EITF 00-12 and SOP 97-2, which does deal with revenue recognition, but those are not SOX.

SOX does not define any accounting. It just requires that the policies are clearly stated and followed. By necessity, it means that GAAP is followed. Since the majority of restatements are caused by revenue recognition, the SOX compliance and revenue recognition policy are heavily scrutinized

tyroja00
Jan 19, 2007, 10:36 AM
SOX does not define any accounting. It just requires that the policies are clearly stated and followed. By necessity, it means that GAAP is followed. Since the majority of restatements are caused by revenue recognition, the SOX compliance and revenue recognition policy are heavily scrutinized

So revman,

Is it Apple's contention that a portion of the revenues that they recognized in their Q1 (on N-draft machines) may have to be reversed and as such they have to charge us so that they can say that it wasn't part of the revenues that they recognized?

ClimbingTheLog
Jan 19, 2007, 10:39 AM
Right... if they are really about "user experience", they should chuck accounting, 'cause it's way too boring. :rolleyes:

Nope, they should hide it from the users, not pile it on them. The often mentioned instant rebate is one way to accomplish this.

Or were you just trying to be cute?

macenforcer
Jan 19, 2007, 10:46 AM
For the last time, in terms of accounting, you did not pay for n hardware.

Hahaha. In terms of accounting?

In terms of real life we DID pay for n hardware. Nuff said.



Hey guys, the earth is flat not round.

Had that come from apple it would be a fact here.

Whistleway
Jan 19, 2007, 10:46 AM
This is silly. How come other manufacturers don't ask $2 for enabling. Isn't Dell, Hp and others subject to SOX? I smell rotten apples.

TheSpaz
Jan 19, 2007, 10:51 AM
2 Questions:

1. Does this do anything for non Intel Macs running on Airport Extreme?

2. Also, does this do anything for Intel Macs that are wired to the Airport Extreme via Ethernet?

If the answer is no to both of these questions, then I won't be buying the upgrade. $1.99 is hardly any money at all. I mean, I'd buy an energy drink for $1.99 at the store. I could go without one for 1 day for a cool Apple upgrade (not that I actually will though).

MikeTheC
Jan 19, 2007, 10:59 AM
One question I would have is:

What's the real reason Apple feels compelled to charge for this particular upgrade?

morespce54
Jan 19, 2007, 11:08 AM
Do we know when it's going to be available? :confused:

hagjohn
Jan 19, 2007, 11:14 AM
Apple should have taken the hit on this one and not charged their customers.

rjfiske
Jan 19, 2007, 11:17 AM
Hahaha. In terms of accounting?

In terms of real life we DID pay for n hardware. Nuff said.



Hey guys, the earth is flat not round.

Had that come from apple it would be a fact here.

In terms of real life (which so often is different from accounting) you paid for metal and plastic. In terms of accounting, which is the only thing Apple is concerned with, you paid for a computer with 802.11g functionality. This is what you expected, were promised, and charged for.

I know it's frustrating that because of accounting compliance companies have to do silly, sometimes incoherent things. But it's not new. The good news is that if you do not pay this fee, you lose no functionality in your computer. Nothing. So rest easy, knowing that not paying this ridiculous unfair fee will have no effect on you whatsoever.

rjfiske
Jan 19, 2007, 11:29 AM
1) I don't give a **** if you disagree or not, you're wrong. I paid for an N card the proof of which is that I have a ****ing N card in my computer, you idiot. The fact that it was disabled by Apple is another issue entirely. Or are you trying to tell me that Apple paid g. card prices to its n. card distributor? Are you daft? By that logic a CD chip costs the same as a C2D chip but as we all know there is a premium for the latter. Why on earth (and by what proof, more importantly) are you claiming that an .n card costs the same as a .g card?

2) I still haven't heard that this is definitely an accounting issue. If Apple says that's the case, I would accept that. But they haven't. Until that time, I'm slightly pissed off but more importantly I am concerned what this means in the future regarding their "functionality upgrade" policies.

Some of you people don't get the point. Let me rephrase that: most of you people don't get the point. It's not about paying "only $2, stop your whining." You same idiots will be here complaining when, next year, you have to input your credit card # to get that next Software Update because people like me have grown tired of speaking up and being told to shush by you lemmings.

First of all calm down and stop with the namecalling please.

I'm not concerned with what APPLE paid for the card. I'm concerned with what Apple promised and charged you. Both of these things were an 802.11g card. The fact that your card is capable of 802.11n with a software upgrade means that Apple, being compliant with accounting, has to "account" for this upgrade monetarily, if you in fact want to now have access to something they originally did not charge you for. They have to.

A software update fixes bugs and add features to make your previously existing operating system work as normal. This $1.99 charge is to give you new functionality that will cause your computer to work BETTER than normal. See the difference? No I don't think Apple will ever charge for a software upgrade unless it's brand new software (iLife, Leopard, Quicktime Pro 7, etc.). There are exceptions to this (iTunes, which was free to begin with) but the exceptions are there when Accounting isn't involved. Confusing? Yes. Evidence that Apple is screwing you? No.

Just my opinion.

shamino
Jan 19, 2007, 11:35 AM
Is it Apple's contention that a portion of the revenues that they recognized in their Q1 (on N-draft machines) may have to be reversed and as such they have to charge us so that they can say that it wasn't part of the revenues that they recognized?
Not quite. By charging, they can say that you're buying a new feature. Therefore, your computer was completely delivered as specified.

By providing an enabler without charging, they are saying that they shipped a not-fully-functional product and have to record the revenue as of the point in time when the product becomes fully functional (that is, when you install the updater.)

This means pushing last year's revenues to this year, which mean restating all kinds of earnings reports, which will mean investigations and all kinds of government badness.
In terms of real life we DID pay for n hardware.
No you didn't. You paid for the spec sheet that was printed on the box, or on the Apple Store's web site.

If you saw some blog reports about n hardware, bought a Mac based on that, and found that your unit had a b/g card, you would not have any legal basis to complain or demand a change.
1. Does this do anything for non Intel Macs running on Airport Extreme?
2. Also, does this do anything for Intel Macs that are wired to the Airport Extreme via Ethernet?
No, and no. If you don't have one of the Macs specified here (http://www.apple.com/wireless/80211/), then the update won't do a thing. And if you're not using WiFi, then upgrading your WiFi firmware to pre-n won't affect anything.

adamget
Jan 19, 2007, 11:44 AM
I can't believe what a load of childish ranting there is in this thread.

I imagine that Apple would rather enable it free of charge. It has probably cost them more to get the legal advice etc. than they will recover on the 1.99.

The reason they are doing it is claimed to be the law. If you have a problem with that then whinge to Bush and the law makers you have over there. Maybe whinge to execs at Enron that Sparked all this.

Even if this is NOT the reason - if you don't like it, don't pay it, and shut up.

Apple is not a charity. If I were a shareholder (sorry - stockholder, forgot you don't speak English), then I would be pleased they were covering their legal obligations and not exposing the company to some smart ass class-action suit that you all love so much.

A

clevin
Jan 19, 2007, 12:00 PM
yeah, for whatever reason apple want to charge u, u do have the choice not to pay it, so, who cares
802.11n isn't obviously better than b or g for most ppl, just like 11g isn't obviously better than b. why bother?

gwangung
Jan 19, 2007, 12:13 PM
Apple should have taken the hit on this one and not charged their customers.

Not legal.

And if you note, the legal advice to do this is quite probably more than the revenue they will realize on this.

macenforcer
Jan 19, 2007, 12:20 PM
Not legal.

And if you note, the legal advice to do this is quite probably more than the revenue they will realize on this.

Getting tired of people reinforcing this myth. Someone made this up and apple is sitting back laughing at this thread and how you all are backing them up. PROVE its illegal or stop using this as an excuse.

Companies have been updating their hardware for years via software updates just like this and I have NEVER been charged for it.

NightStorm
Jan 19, 2007, 12:27 PM
OMG I just thought of something... Apple has been doing this for years! They install Quicktime Pro on my computer, but force me to pay them to unlock the features. The cost of installing Quicktime on my computer is part of the cost of the system right, so therefore I should get this feature for free! I think we should get a class action lawsuit going! :rolleyes:

While we're on this bandwagon, we should go after Microsoft too... I mean, this Vista Home install will copy everything to the hard drive, and be upgradable to Premium by getting a new key. I mean, I paid for Vista and its on my computer, I shouldn't have to pay to use it! :rolleyes:

I've gotta say, probably 90% of the people in this thread are complete idiots who would argue if Apple had left 802.11n chips out of it entirely and made us pay $70 for a USB or PCI card to add this feature. The official specifications said 802.11b/g and made ABSOLUTELY NO mention on n support. That's a bonus feature. Grow up; not everything in life is free, and if you don't play by the rules, especially in today's corporate environment, you get in a lot of trouble.

killmoms
Jan 19, 2007, 12:28 PM
I love all the non-accountants, who are clearly unfamiliar with the laws involved, sitting here shouting about how they're being screwed and someone needs to PROVE to them that this is necessary, while for the entire thread there have been two or three very knowledgable people explaining calmly why this situation is occurring and why other situations cited aren't analogous. And yet, we still have screaming and moaning. :rolleyes:

Look, if you don't understand accounting or the law or why this is being done, that's fine. But don't shout about it being untrue when people who are clearly knowledgable are doing their best to explain it to you. If you understand it and don't LIKE it, well, that's a different issue—then you ought to be pissed at the laws and the people who passed them, not Apple, who are merely trying to comply with the law during a time when they are under strict scrutiny for other monetary issues.

weckart
Jan 19, 2007, 12:40 PM
Save it. You are preaching to a bunch of Think Different folks. People who think differently. Bending over and taking it in the rear end is highly subjective. If you think different you might even like it.

Aaaannnnd breathe..... Feel better now?


What Apple appears to have done has a logic which makes perfect sense if you are steeped in accounting knowledge and experience, but seems idiotic and unbusinesslike to the average person. But them's the breaks.

I am unfortunately (it's boring) involved in SOx work now and have been for the past couple of years for various firms. The reason why Apple has gone to this extreme is because it is under especial scrutiny by the SEC thanks to the options scandal. When companies attract the attentions of this or any other oversight board, they overreact in order not to give the authorities any possible additional means to haul them over the coals with. I have seen it enough times already. Following the spirit rather than the letter of the law is not good enough. Remember, Apple has announced bumper profits and growth. It would be a feather in the cap of any ambitious investigator involved on its case.

And no, I do not like it any more than you do. After all, we are all consumers, too.

BuzWeaver
Jan 19, 2007, 12:56 PM
So wait: you're telling me that for accounting purposes, Apple has to charge something for the upgrade, but that it doesn't matter what they charge? This seems like an invitation to wacky accounting. Imagine if a corporation said: "Yes, our CEO received a house in Malibu, but we SOLD it to him for 1 cent."

I have a hard time believing that this is way things work...

I resisted making any 'political' comment as I didn't want to give the impression I was saber rattling or trollling, however I found it amusing during the Keynote how there was a lot of Democrat overtones with Al Gore's (who amusingly enough is a board member) voice message and the Nancy Pelosi's splash article in the New York Times during the iPhone demonstration.

I'm curious why there isn't a bigger outrage of having to pay a fee to make your systems compliant considering Apple just post its billion dollar earnings. Its typical of Dem's to point out Fat Cats and cringe, yet Job's seems to get away with such stuff.

gwangung
Jan 19, 2007, 01:12 PM
Getting tired of people reinforcing this myth. Someone made this up and apple is sitting back laughing at this thread and how you all are backing them up. PROVE its illegal or stop using this as an excuse.

Companies have been updating their hardware for years via software updates just like this and I have NEVER been charged for it.

Getting tired of people ignoring what's being said plainly. Gives me the impression that you're stupid (mistaken as that may be).

Do note that Apple DID get spanked for cutting corners on accounting. A company would be more careful in the future; obviously, you wouldn't.

Also note that it's undoubtedly true that they're NOT going to make any money on this; the legal advice they got on this and the costs they incur in collecting this fee is going to outweigh the rather minor revenues they will reap from this.

joeconvert
Jan 19, 2007, 01:16 PM
why charge anything for a simple firmware update!? i have tons of gadgets that get firmware updates that dont cost a cent, AND add functionality! apple is starting to nickel and dime us and i dont like it one bit. has success gone to their heads? hope not.

seems like many here agree with ANYTHING apple does and find reasons, even stupid ones, to justify the company's actions. sure, its just for accounting purposes, 1.99 is nothing, its adding value, apple is right in charging, ....

Please, just stop typing. This issue seems to be over your head.

TheSpaz
Jan 19, 2007, 01:27 PM
The thing is... Apple did not Advertise it as having "n" capabilities. You paid for the specs they gave you. Just because it's a SOFTWARE update and not a HARDWARE update, why should they give it to everyone for free? I think a lot of people think of software as something that they can get for free but, in fact, software costs money too. How many people would prefer that Apple did not mention it at all and not give anyone a choice? I suppose Apple should include iWork full install and Microsoft Office full with the computers they ship because it comes with the trial versions and a software update would make them fully functional......... for free!

On the other hand, they could just start shipping the new MacBooks with the "n"abled airport cards for only $1,100.99 that way, the users would be paying the $1.99 by force instead of by choice.

failsafe1
Jan 19, 2007, 01:56 PM
I will be glad to give them $2 so I can be free to buy whatever N Equipment I want on sale at Circuit City.

NightStorm
Jan 19, 2007, 02:45 PM
I will be glad to give them $2 so I can be free to buy whatever N Equipment I want on sale at Circuit City.

Better make sure whatever N equipment you buy on sale at circuit city is compatible with the draft-n spec used by Apple. Some chipsets may not be play nicely together; I can't wait for all the posts of people complaining about this (you all know it's coming!)...

failsafe1
Jan 19, 2007, 02:46 PM
Better make sure whatever N equipment you buy on sale at circuit city is compatible with the draft-n spec used by Apple. Some chipsets may not be play nicely together; I can't wait for all the posts of people complaining about this (you all know it's coming!)...

Great point. How or where would you find the draft specs?

gwangung
Jan 19, 2007, 02:52 PM
Hmph. If people want to save $1.99, why don't you write the drivers yourself, after the specs get past the draft phase?

ClimbingTheLog
Jan 19, 2007, 03:07 PM
Better make sure whatever N equipment you buy on sale at circuit city is compatible with the draft-n spec used by Apple. Some chipsets may not be play nicely together; I can't wait for all the posts of people complaining about this (you all know it's coming!)...

You're backing into an incredibly important point here - with this upgrade we'll have a draft-n standard radio.

To be consistent when the 802.11n standard is finalized and they have another upgrade from a draft-n radio to an n-radio - they'll *have* to charge $1.99 again.

And if an extension becomes popular (authentication, WPA-3, whatever) and they update the radio again, they'll *have* to charge again, since they "never sold us an 802.11foo radio).

Disturbing this is.

aranhamo
Jan 19, 2007, 03:11 PM
Bootcamp is purely software.

Bootcamp is also pre-release, beta, use-at-your-own-risk software with no official support or liability on the part of Apple.

gwangung
Jan 19, 2007, 03:22 PM
You're backing into an incredibly important point here - with this upgrade we'll have a draft-n standard radio.

To be consistent when the 802.11n standard is finalized and they have another upgrade from a draft-n radio to an n-radio - they'll *have* to charge $1.99 again.

And if an extension becomes popular (authentication, WPA-3, whatever) and they update the radio again, they'll *have* to charge again, since they "never sold us an 802.11foo radio).

Disturbing this is.


Yes---to think that the legal education of people around here is so poor.

This line of reason doesn't follow from an unadvertised, firmware/hardware capability, which has already been explained ad nauseum.

And it certainly doesn't realize that the costs in collecting and distributing these changes are most probably going to be more than the $1.99 charge.

Eraserhead
Jan 19, 2007, 03:23 PM
To be consistent when the 802.11n standard is finalized and they have another upgrade from a draft-n radio to an n-radio - they'll *have* to charge $1.99 again.

No, I think with this charge they'll be OK, I mean $1.99 hardly matters if it has to be delayed in terms of revenue realisation. Basically if they re-charge they are awful.

I would expect it to be available for illegal download quickly and unless it takes the piss too much Apple won't do anything.

calvin
Jan 19, 2007, 03:24 PM
Hi,

I've read through this discussion, and I'm still not convinced about this really being necessary for accounting. Value wise I agree it's insignificant, however the accounting geek in me finds this quite interesting. If somebody can explain why my interpretation below is wrong, please do.

As I understand the relevant US GAAP rules on revenue recognition, a company may only recognise revenue once *obligations* related to the sales transaction are met. (I believe older rules allowed full revenue recognition with an estimated accrual for future costs).

To me it is the word *obligations* which is crucial. Apple is under no obligation to update the firmware to enable .11n. They have already met all obligations under the sales contract by supplying the relevant hardware, and so are already entitled to recognise all the revenue. There is no restatement issue that I can see with issuing this upgrade. There is therefore no reason I can think of why, from an accounting perspective, it is necessary to charge.

Incidentally, a point to those who said that without charging for the upgrade Apple would be saying that they shipped a product that previously they had 'hidden', and that the paperwork trail would not tie up. This makes no sense. Apple will not be recording inventory as '802.11g' cards. They will be recording by assigned product numbers - irrespective of the capabilities of that product. Check your last Apple invoice - it lists product numbers next to a brief description. The paperwork trail ties up perfectly for having sold a pre-n spec card in the new macs, even if it wasn't fully activated at time of sale.

I should mention that I am only an exam-qualified accountant, with another 7 months of time experience to get before full qualification. Furthermore my training was under IFRS rather than US GAAP. I am however aware of some US GAAP.

morespce54
Jan 19, 2007, 04:10 PM
A buck ninety-nine people. Sheesh. :confused:

Well, it's not about money ($1.99 is quite cheap) but it's about the idea of charging for an upgrade (soft or hard)...

Diatribe
Jan 19, 2007, 04:18 PM
Geez people, don't get your panties all wet.

Apple gives you an upgrade that you didn't expect when you bought the damn computer and you complain about it costing a buck ninety nine?

You have got to be kidding me.

It's like saying you bought a regular Honda Civic and later the dealership tells you that they shipped you a turbo version without you knowing and you'd have to pay $100 to unlock the power and still you complain.

If you don't want it don't get it. Nothing will have changed the computer you bought as Apple advertised it.
If you're smart you're just gonna fork over the $2 and be happy that you got such a great upgrade almost for free.

Get a grip people.

morespce54
Jan 19, 2007, 04:18 PM
Ok, so I have an Intel Core 2 Duo iMac with 802.11n draft.

If I download the $1.99 software when it comes out, is that enough to bump my speed, or do I need to replace my Netgear wireless router (3 yrs old) with a newer version (new hardware or new software or both) as well?

You most likely do need to replaced it. Unless your 3y old NetGear was already up to the 'n' protocol. Chances are that you 'Gear was 'b' and 'g' compliant (and not 'n' compliant)

Eraserhead
Jan 19, 2007, 04:40 PM
Ok, so I have an Intel Core 2 Duo iMac with 802.11n draft.

If I download the $1.99 software when it comes out, is that enough to bump my speed, or do I need to replace my Netgear wireless router (3 yrs old) with a newer version (new hardware or new software or both) as well?

You will need to replace the router with a Draft N one too.

revman
Jan 19, 2007, 05:23 PM
Hi,

I've read through this discussion, and I'm still not convinced about this really being necessary for accounting. Value wise I agree it's insignificant, however the accounting geek in me finds this quite interesting. If somebody can explain why my interpretation below is wrong, please do.

As I understand the relevant US GAAP rules on revenue recognition, a company may only recognise revenue once *obligations* related to the sales transaction are met. (I believe older rules allowed full revenue recognition with an estimated accrual for future costs).

To me it is the word *obligations* which is crucial. Apple is under no obligation to update the firmware to enable .11n. They have already met all obligations under the sales contract by supplying the relevant hardware, and so are already entitled to recognise all the revenue. There is no restatement issue that I can see with issuing this upgrade. There is therefore no reason I can think of why, from an accounting perspective, it is necessary to charge.

Incidentally, a point to those who said that without charging for the upgrade Apple would be saying that they shipped a product that previously they had 'hidden', and that the paperwork trail would not tie up. This makes no sense. Apple will not be recording inventory as '802.11g' cards. They will be recording by assigned product numbers - irrespective of the capabilities of that product. Check your last Apple invoice - it lists product numbers next to a brief description. The paperwork trail ties up perfectly for having sold a pre-n spec card in the new macs, even if it wasn't fully activated at time of sale.

I should mention that I am only an exam-qualified accountant, with another 7 months of time experience to get before full qualification. Furthermore my training was under IFRS rather than US GAAP. I am however aware of some US GAAP.

By allowing the fact that n chips were in the computer to become public knowledge, then it became clear that additional software was required to turn on this feature. Since this software was not available at the tim eof the same put appl in a tough position. If they had provided it for free it would have been classified as an "unspecified software upgrade."

As such it would fall under SOP 97-2 and SOP 98-9. With no market value on this it would have required total deferral.

They can now sell it for $1.99 thus avoiding the fact is was free software upgrade impied at the time of the sale.

US GAAP in play. IFRS differs considerably in this area.

Hope this helps

matticus008
Jan 19, 2007, 11:47 PM
This is a really important point. The same card that Apple is shipping was being shipped by other vendors when Apple started using it. The other vendors included the draft-n firmware whereas Apple included the firmware that prevented recognition of draft-n capabilities. So in a very real sense, fustercluck is right, it was crippled ("disabled").
That's a mischaracterization. Other vendors had finished, feature-complete drivers to ship with their hardware. Apple didn't. Until it finished the drivers, there's no way they could have sold that product in its n-capable state.

If Apple had had the drivers ready, it would have been released as an n-ready device, the accounting would have been squared off (paid for and delivered), and no one would be charged for anything. It would be business as usual. This is the first case where Apple has shipped hardware without a complete set of drivers. The Mac mini part numbers clearly identified what went into the "stealth upgrades"--in accounting, the specs were accurate and up-to-date. The advertising and marketing materials were not, but there's no rule about under-advertising (only over-advertising), so there were no potential penalties to face.

Unfortunately, that's not what happened here. Since it didn't have drivers, it had an unfinished product. Would you have preferred that Apple had gone back and replaced its hardware order with lesser chipsets (knowing full well that the retail price would stay the same) so that it didn't have to worry about this issue at all? It could have shipped a fully finished product and had zero accounting woes. You'd have paid for and received a b/g wireless Mac. And two months from now, it would still be that b/g wireless Mac.

Instead, for $1.99, they're giving you something extra, if you want it, rather than making you buy a whole new Airport card because their drivers people were behind schedule. Anti-consumer this is not.

SMM
Jan 20, 2007, 12:41 AM
As I have been reading through this $1.99 thread, I have been shaking my head. At first, I was wondering what exactly I was missing. Surely, this could not be about a ~$2 charge to activate the advanced features of wireless card. "No, that is impossible. Apple was hammered for not including it awhile back, and posters were excited they may see this offered soon". And besides, who would make a fuss over $2, after Apple explained why they had to levy a nominal charge. What was I missing?

Then it flashed - this is FOX news smelling blood in the water. Take something totally benign and make it a major 'golly, gee-whiz' story. Now, I suspect there are some of you ultra-tightwads who are just bashing because that is what you do. But, this is really a troll-rich thread. Trolls, go back to MS and tell them the monopoly days are coming to an end. And, if you do not start making better product, and soon, Apple is going to hand you your head.

zoziw
Jan 20, 2007, 02:07 AM
Other people are starting to question Apple's reasoning on this.

http://www.macnn.com/articles/07/01/19/apples.80211n.fee.redux/

"GAAP doesn't require you to charge squat," says Lynn Turner, managing director of research at Glass Lewis & Co. and a former chief accountant of the Securities and Exchange Commission told The Wall Street Journal. "You charge whatever you want. GAAP doesn't even remotely address whether or not you charge for a significant functionality change. GAAP establishes what the proper accounting is, based on what you did or didn't charge for it."

"Accounting doesn't require any charge for anything," says Edward Trott, a member of the Financial Accounting Standards Board, which writes the accounting rules. "No, GAAP doesn't tell you to do anything. You need to work out your transaction with your customer, and GAAP will tell you how to reflect your transaction with that customer."

As I suspected, this is all a bunch of nonsense.

ReanimationLP
Jan 20, 2007, 03:02 AM
If you are really crying about a 2 dollar download, thats pretty sad. What is that, like half the price of a cup of coffee from Starbucks or something? Its nothing. You probably have that much just sitting in your couch cushions.

HyperX
Jan 20, 2007, 06:14 AM
Is the networking hardware inside the computers capable of 802.11a or is it just the AirPort Extreme box?

It's probably not a good idea to find the update on the web. You never know if it's been changed.

As far as I know the card is a/b/g/n capable but OSX only uses the B/G part. If they are unlocking N I wonder if they are unlocking the A too?

yamabushi
Jan 20, 2007, 06:51 AM
Devices operating with different versions of 802.11 may interfere with each other and cause slowdowns and disruptions. Limiting the number of versions commonly available in their products might be Apple's way of attempting to avoid such problems. That may be why 802.11a is missing.

As stated many times before, the fee makes perfect sense from an accounting standpoint. This fee actually can save their customers money in the long run by avoiding the risk of being forced to correct accounting irregularities which cost the company money that would then be passed on to the customer in future products. Conservative accounting practices will keep Apple out of hot water which is good for everyone.

iW00t
Jan 20, 2007, 07:08 AM
Be prepared to pay for point updates. Apple didn't advertise their products to be certified 100% bug free, when we purchase a Mac or OS X it is implied that these products have bugs and we hand over our credit cards on account of that. Bug fixes constitute added value to said software product, profits on which should not have been realised at time of sale blah blah blah....

In short, fanbois, take off your panties.

Chupa Chupa
Jan 20, 2007, 07:32 AM
Other people are starting to question Apple's reasoning on this.

http://www.macnn.com/articles/07/01/19/apples.80211n.fee.redux/





As I suspected, this is all a bunch of nonsense.


Worse than that. I think Apple is the new M$. Albeitit cooler and hipper, but just as money grubbing. I'm a hard nosed capitalist, and have quite a bit of AAPL, but this kind of nickel and diming Apple has started with (first with having to pay $49 just to have an Intel FCP compatible version and now this) is insulting and irritating. But then when Apple tries to cover up their unmitigated gall with LIES about how GAAP and/or SOX REQUIRES them to charge for the "n" firmware it really just brings Apple down a notch.

I don't own a C2D machine, but to have to fork over $1.99 after already pushing $1000+ Apple's way is just ubsurd, especially when the same C2D machines shipping in Feb will have the "n" feature enabled.

Sadly Apple fans have become passive in the past couple of years and are happily bending over for this, encouraging Apple to do more of the same in the future.

So while the OS X is more user friendly OS than Windows, Apple IS NOT a more consumer friendly company than M$. I suppose we should start referring to Apple as Apple$.

matticus008
Jan 20, 2007, 08:33 AM
Be prepared to pay for point updates. Apple didn't advertise their products to be certified 100% bug free, when we purchase a Mac or OS X it is implied that these products have bugs and we hand over our credit cards on account of that. Bug fixes constitute added value to said software product, profits on which should not have been realised at time of sale blah blah blah....

In short, fanbois, take off your panties.
Would you quit with this tripe? Software updates to software products are unaffected. There is no further revenue to recognize and no possibility to screw up. If you ship 1 copy of iLife, you've collected a report for the boxes, the discs, and the little pamphlets. Unless you want to send out a second round of discs at some later date and try to pretend that set never happened in the books, you won't end up in the same boat. It's really not that hard to understand.

Hardware bugs, on the other hand, are handled by a whole different set of procedures, but if it's not a recall-worthy bug, then you already had to pay to fix it, and then only if there ever was a fix made.

I've had about enough of the "bend over" metaphors. They're crude, inappropriate, and convey no useful information. If you want to be righteously indignant when you've got no reason to be, that's your choice. It doesn't mean anyone is taking anything up the ass just because you think something should be free. Here's a tip: they don't owe you anything. They're not "good guys." They're a corporation. Expect them to act as such and maybe you'd appreciate when they do something helpful when they could have done nothing. They could double everyone's RAM tomorrow, because OS X is a little slow on those computers with 512MB, but it doesn't mean they should, nor does it mean anyone can reasonably expect them to.

revman
Jan 20, 2007, 08:35 AM
Other people are starting to question Apple's reasoning on this.

http://www.macnn.com/articles/07/01/19/apples.80211n.fee.redux/





As I suspected, this is all a bunch of nonsense.

Hmmm, well you have to read this carefully:

"You charge whatever you want. GAAP doesn't even remotely address whether or not you charge for a significant functionality change. GAAP establishes what the proper accounting is, based on what you did or didn't charge for it."

Absolutely correct! GAAP does not tell you whether to charge or what to charge! As long as the correct accounting is followed when you decide what todo.

Neither of these references address what the accounting is in this case.

Also remember when most of the .com accounting issues :-)

They asked each of these guys the wrong question.

Jay42
Jan 20, 2007, 08:38 AM
I apologize if this has been asked before....

Is Apple expected to make a stand alone 802.11n int. card? Can I put one in my powerbook?

revman
Jan 20, 2007, 09:06 AM
Here is a thought.

So let's start from the beginning here.

1. Apple sells an iPod for $300. No future implications. They book $300 in revenue (let's exclude any warranty accruals here, okay!)

2. Apple sells an iPod for $300 ,and says it will support wi-fi downloads in 2008 via a software update. (internal accounting has no VSOE for this enahnacement). No brainer, every revenue accountant in the world will defer ALL this revenue until the wifi download enhancement is available. Under 97-2 100% deferral. NOT A PENNY OF REVENUE.OUCH!

3. Apple sells an iPod for $300 ,and says it will support wi-fi downloads in 2008 via a software update and will charge $1.99.
Okay, this is a grey area, but let's just say that this $1.99 is the first time they have done this. Probably requires full deferral until VSOE is established. Could go either way here!

4. Apple sells an ipod for $300, and then later says it will support wifi downlaod for $1.99. BINGO. They are establishing standalone value for the driver. They book $300 at the time of sale and $1.99 at the time of the download.

NOW HERE is my hypothesis.

5. Apple sells an iPhone for $499, and says "It will support 3G." But not in June???? Oh, ****! But the internal accountants are going to say that the 3G upgrade will be available as a software download and based on precendent the value of that download is $1.99 based on similar history. They can still give it away for free, but will defer $1.99 and recognize $498.01 on the phone sale. Microsoft has done this FOR years.

I would say that is a fair accounting treatment....

OK, CPA's what do you think? Thought of this in the shower this AM :-)

macmax77
Jan 20, 2007, 09:23 AM
is there some problem here? i think your statement is a bit out of hand. $1.99 isn't exactly much worth complaining about.

you know what?
I have sold more Macs than Apple itself, i am a Macgeek, MacHead, whatever you want to call me, to the degree that my friends say that Apple should hire me, even my Thesis was about Apple computers.

But SJ has his head up his arse now and i think that that shouldn't be paid.

revman
Jan 20, 2007, 09:44 AM
"i am a Macgeek, MacHead, whatever you want to call me, to the degree that my friends say that Apple should hire me"

With all due respect, my friend, I think that 99% of the people on this list would qualify for this statement

MacinDoc
Jan 20, 2007, 10:21 AM
I'm getting fed up with the rude, offensive comments on this thread. It you don't like the nominal $1.99 fee, on which Apple will realize no profit, then go ahead and complain, but keep the crude references out of it.

Until now, Macs were sold as G-capable machines only. Apple was explicit about this in the published specs. To complain that it will cost $1.99 for the upgrade to pre-N for use with a third party pre-N router (you don't need to buy this if you use the new Airport Extreme or ?TV), when it entitles you to Apple technical support for use with that third party router, is silly.

Anyway, why don't you complain to the router manufacturer that it didn't provide Apple drivers? After all, it's their product, not Apple's. Remember, Apple's pre-N routers come with the necessary software, so isn't it other router manufacturers' responsibility to do the same?

tyroja00
Jan 20, 2007, 11:20 AM
"Accounting doesn't require any charge for anything," says Edward Trott, a member of the Financial Accounting Standards Board, which writes the accounting rules. "No, GAAP doesn't tell you to do anything. You need to work out your transaction with your customer, and GAAP will tell you how to reflect your transaction with that customer."



Sorry guys, this is what I have been trying to tell you. Apple is not required to charge us. It may be benificial in the future for them if they do so, as to not defer revenue or restate their quarterly. And if you don't know, FASB is the authority here not Apple's revenue department. Let me put it this way, in my limited 7 years of auditing, with several clients larger than Apple, I have never had to require that my client charge their customers. I have consulted (not when auditing) that it would be benificial to charge more, but I did not tell them to charge; it was their prerogative.

Actually, if I told Apple to charge their customers (as an auditor), I would be breaking my separation of duties and be in trouble myself, because this would be construed as business consulting which is not allowed by the auditors.

As for Apple not making anything on $1.99, I guess you are arguing that that they make nothing on iTunes downloads either.

Oh, YES, I will be getting the update because it is WELL WORTH THE FEE. I wasn't promised N (eventhough I knew it was there) so I am happy for the forethought by Apple.

I just don't like their excuse.

bousozoku
Jan 20, 2007, 11:31 AM
I apologize if this has been asked before....

Is Apple expected to make a stand alone 802.11n int. card? Can I put one in my powerbook?

That's not the usual way Apple works but a third party will make either a PC Card or a USB-attached version. If the chipset is compatible with Apple's, like certain current Belkin cards using the Broadcom 802.11g chipset, the cards would work.

tyroja00
Jan 20, 2007, 12:05 PM
NOW HERE is my hypothesis.

5. Apple sells an iPhone for $499, and says "It will support 3G." But not in June???? Oh, ****! But the internal accountants are going to say that the 3G upgrade will be available as a software download and based on precendent the value of that download is $1.99 based on similar history. They can still give it away for free, but will defer $1.99 and recognize $498.01 on the phone sale. Microsoft has done this FOR years.

I would say that is a fair accounting treatment....

OK, CPA's what do you think? Thought of this in the shower this AM :-)

If I was their auditor, I would say give us more money so I can test the value of this and go to the nicest restaurant in Cupertino and drink some Dom, just joking.

Seriously, I would not accept this. First, since they announced that the iPhone would support 3G, that establishes a "right of return" under EITF 00-21, whereas there is no such right for the current issue (I can't return my Macbook and say it doesn't do draft-N). Secondly, the value of having 3G will differ than the value of having draft-N. And as such, I would look like an idiot when my files were reviewed and I didn't do some sort of valuation test or ask other colleagues as to their valuation with their respective clients who use 3G.

zoziw
Jan 20, 2007, 12:28 PM
Just to clarify my position on this, I believe, as per the link and quotes in my previous post, that Apple's reasoning behind charging $1.99 for n functionality is incorrect.

Having said that, if Apple wants to charge $1.99 to enable this feature and their customers are happy to pay that fee, I don't have a terribly big problem with it.

I just don't think that from an accounting perspective it is necessary.

brendaem
Jan 20, 2007, 02:55 PM
I am in the market for a notebook computer.

Seeing Apple do something like charge their customers for unimpinging a current driver makes me angry.

I'm asking myself: Is Apple'$ future more dirty that Microsoft's? Do I want to endorse a company that would do this?

If Apple does this with a 10% market share, what are they going to do if they had a 80% market share?

Is Apple acting in good faith?

bousozoku
Jan 20, 2007, 03:14 PM
Just to clarify my position on this, I believe, as per the link and quotes in my previous post, that Apple's reasoning behind charging $1.99 for n functionality is incorrect.

Having said that, if Apple wants to charge $1.99 to enable this feature and their customers are happy to pay that fee, I don't have a terribly big problem with it.

I just don't think that from an accounting perspective it is necessary.

I don't believe the accounting line. I've worked as an adjunct to accounting at times and don't see any reason, other to justify the cost of the upgrade.

I am in the market for a notebook computer.

Seeing Apple do something like charge their customers for unimpinging a current driver makes me angry.

I'm asking myself: Is Apple's future more dirty that Microsoft's? Do I want to endorse a company that would do this?

If Apple does this with a 10% market share, what are they going to do if they had a 80% market share?

Is Apple acting in good faith?

I don't see a huge problem here. They're charging for an upgrade that the Core Duo people won't be able to get at all.

U.S. Robotics put out modems with hardware that was well in advance of a standard, just to claim big speed increases. When most of the modems couldn't be upgraded, what did people do? They were either SOL and used their modems at a lower speed when the standard was implemented or they bought another modem.

I'd expect that some of the current pre-N hardware won't work with simple upgrades. Imagine spending $130 on a router and finding that you need to buy a new router because the company guessed wrong.

Apple isn't charging a fortune, but the excuse is the problem, not the fee.

revman
Jan 20, 2007, 04:00 PM
If I was their auditor, I would say give us more money so I can test the value of this and go to the nicest restaurant in Cupertino and drink some Dom, just joking.

Seriously, I would not accept this. First, since they announced that the iPhone would support 3G, that establishes a "right of return" under EITF 00-21, whereas there is no such right for the current issue (I can't return my Macbook and say it doesn't do draft-N). Secondly, the value of having 3G will differ than the value of having draft-N. And as such, I would look like an idiot when my files were reviewed and I didn't do some sort of valuation test or ask other colleagues as to their valuation with their respective clients who use 3G.

I actually do not think they established a right of return with the language from the keynote.

Agreed no right of return issues on the macbook

My point here is that they are trying to establish standalone value of a software driver upgrade. Apple no little to now history of this.

revman
Jan 20, 2007, 04:11 PM
I actually do not think they established a right of return with the language from the keynote.

Agreed no right of return issues on the macbook

My point here is that they are trying to establish standalone value of a software driver upgrade. Apple no little to now history of this.

Also they have not officially announced it, that is you cannot buy it. Hence no right of return has been established.

But I guarantee the hardware will include 3G capability on shipment, hence the similarity to th n-issue.

aswitcher
Jan 20, 2007, 04:33 PM
I am sure this will be the last time Apple "upset" customers with this upgrade.

As far as I can see almost anyone with a N capable Mac wont see a neeed for N unless they also purchase a new Airport Extreme or AppleTV anyway. And the N upgrade is free if you get one of these.

TIGERmac
Jan 20, 2007, 04:41 PM
Two things have become readily apparent to me while sifting through the 9 pages of this topic.

1. Many people have a very difficult time understanding accounting and GAAP
2. Educated and respectful reasons for the charge have fallen on deaf ears

The reasons sighted for the charge (namely, revenue recognition pertaining to GAAP) are absolutely reasonable and correct. By enabling this substantial capability that was NOT advertised or implied, they admit that the product that was delivered was incomplete. According to GAAP, the revenue should be deferred until the product is complete. Apple obviously didn't do this. Companies and shareholders hate restatements. So charge a nominal fee and be done with it.

Apple did not do anything dishonest or out of the ordinary. Apple is complying with GAAP.

I completely agree with those who have stated that Apple would rather not have to charge it's customers for this. Apple is breaking even on this transaction at best.

I cannot understand the argument that Apple should charge and then issue a rebate. Please tell me why Apple should incur a cost to enable a substantial feature upgrade that you DID NOT PAY FOR. You paid for a computer with b/g capabilities and that is EXACTLY what was delivered to you. You are not being forced to upgrade, and this upgrade in no way reduces the capabilities that were promised to you for the fee that you paid.

Furthermore, Apple's conduct would not be considered unusual even if the company wasn't compelled by accounting standards to charge. Automobile manufacturers frequently increase the performance capabilities of their automobiles after several years to offer consumers new features and/or a more compelling reason to upgrade. These power increases are often achieved through programing changes in the engine's electronic control module (ECM). Was the prior model year capable of this better performance? Sure, but maybe the software changes (and required EPA testing) weren't quite ready for the prior model. Do automobile manufacturers make this "upgrade" available to customers who purchased an older model? NO.

Apple could have never released this upgrade and you would have been forced to do one of two things: create the drivers yourself (your time is worth money, believe it or not), or buy an add-on card--both of which would likely cost you more than $2. This was the more generous (and pro-consumer) approach. Apple is a business, Apple is not your friend. People need to realize this. This is not to say that consumers should not be outraged when a company engages in blantant anti-consumer behavior--it's just that this doesn't qualify as one of those instances.

Now to the quotes from the accountant and FASB member. You are aware that the question asked influences the response given, correct? Accounting is based on guidelines, precedent, and conservatism (not necessarily in that order). Generally Accepted Accounting Principles are just that--generally accepted. They provide businesses with recommended guidelines and approaches (though public companies are required to conform to GAAP). They do not provide a textbook explanation of every possible business scenario. As such, they are open to interpretation. Enter precedent. Were we ever in a similar situation? If so, how did we approach it? If not illegal or unethical, handle this situation in the same or similar manner. Never been in this situation before? Tread lightly. The principle of conservatism (accounting-wise, not political - haha) dictates that given two or more approaches, select the option to provides the least amount of risk. Is this option more cautious than necessary? Perhaps. Dealing with an SEC investigation isn't exactly a pleasant experience, however. Apple has had a recent run-in with the SEC. When you're under the microscope, you tend to be more cautious.

Sorry for the long post. Responding to 9 pages of comments takes a while.

tyroja00
Jan 20, 2007, 04:59 PM
Two things have become readily apparent to me while sifting through the 9 pages of this topic.

1. Many people have a very difficult time understanding accounting and GAAP
2. Educated and respectful reasons for the charge have fallen on deaf ears


I know why they are doing it and they are right to do it. But, that is not the excuse they are telling people:

"The nominal distribution fee for the 802.11n software is required in order for Apple to comply with generally accepted accounting principles for revenue recognition, which generally require that we charge for significant feature enhancements, such as 802.11n, when added to previously purchased products," Fox said

That which is in bold is what I object to. That is NOT true. GAAP does not require them to charge. That is a fact reinerated by the FASB board member.

Apple doesn't want to restate, fine. Just say that.

MattDell
Jan 20, 2007, 07:06 PM
Anyone who paid attention at all in business school should realize why this fee exists.

TIGERmac
Jan 20, 2007, 07:25 PM
That which is in bold is what I object to. That is NOT true. GAAP does not require them to charge. That is a fact reinerated by the FASB board member.

Apple doesn't want to restate, fine. Just say that.

I understand your view, but it's not as clear cut as it seems. As with any business decision, there are multiple approaches to get the desired outcome.

Apple recognized the revenue from the computer models in question. Taking the conservative approach, that action gives Apple two main choices: update free of charge and restate, or charge a nominal fee and leave the record earnings in tact. Selecting the restatement option would be a terrible decision--particularly in a record quarter. Even mentioning the word "restatement of earnings" sends shivers down investors' spines. All companies avoid the word when possible.

So while I agree with you that GAAP doesn't require that they charge a fee, it is one of the options available to maintain compliance with GAAP. From an accounting standpoint, Apple didn't provide a very thorough explanation. Though most people wouldn't truly understand (or care to know, for that matter) the accounting explanation. They're not being untruthful. They're just being a bit overly simplistic.

netdog
Jan 20, 2007, 07:29 PM
I am surprised that this subject has garnered so many posts.

matticus008
Jan 20, 2007, 07:31 PM
Apple doesn't want to restate, fine. Just say that.
A restatement doesn't give them any actual protection. It's just a good measure to take when you screw up and don't have any other way to correct it. For most retroactive statements, you can pursue prosecution, but it's customary not to (you don't usually want to punish people for being honest, because otherwise what's the incentive not to try to hide it?). But it's like announcing that you'll be filing, say, an AOB late; that's all well and good, but it's late and if they choose not to accept it or to punish you, an announcement of error isn't going to stop them.

What you're suggesting is basically the same as saying "Paul didn't want to speed in order to get there on time." He had good cause (maybe his wife was having a baby), and maybe he wouldn't even get caught, but if he did, he has no actual protection--only the whims of the police officer.

The bottom line is that there is always a choice, but sometimes staying in the clear only has one certain option. The law can't actually "require" you to obey it (you must choose to), but we use that expression because of the fundamental assumptions upon which the justice system is based.

They obviously don't want to go into detail in a public statement about what's going on, but long story short, you can't expect them to say "we're going to charge for this because we made some oversight in the beginning and now we have to correct it."

If they didn't correct it and they were eventually fined, that charge would eventually be passed on to customers as well. Let the customers pay who find it reasonable and appropriate to do so. Would you rather be asked to pay $2 now to upgrade your own computer or forced to pay $0.50 later because someone else's computer was upgraded?

bousozoku
Jan 20, 2007, 07:45 PM
I am sure this will be the last time Apple "upset" customers with this upgrade.

As far as I can see almost anyone with a N capable Mac wont see a neeed for N unless they also purchase a new Airport Extreme or AppleTV anyway. And the N upgrade is free if you get one of these.

Mostly true.

Eventually, wireless hotspots might offer N-speed service, once the dust has settled on the standard.

tyroja00
Jan 20, 2007, 08:33 PM
Well, the last I am going to say about this situation is,

1) I am happy about the upgrade.

2) It is worth $1.99.

3) Apple is NOT forced to charge us by GAAP, FASB, EITF's, SOP's, Steve's grandmother, or anyone else.

And,

4) We are all nerds for giving a hoot.

So, please excuse me while I go get a life.

aswitcher
Jan 20, 2007, 08:44 PM
Mostly true.

Eventually, wireless hotspots might offer N-speed service, once the dust has settled on the standard.

I will be pleasently surprised...actually, astounded, if you get bandwidth from a wireless 'hotspot' that requires you to have more than G speeds. Point taken in respect that N might provide some range benefits. Still for 2007 at least I dont see this as an issue.

bousozoku
Jan 20, 2007, 09:03 PM
I will be pleasently surprised...actually, astounded, if you get bandwidth from a wireless 'hotspot' that requires you to have more than G speeds. Point taken in respect that N might provide some range benefits. Still for 2007 at least I dont see this as an issue.

If the upgrade helps with range as N is supposed to do, it will be quite a boon to the alumi machines.

You're right about 2007 because it's been enough just to find hotspots, let alone fast and reliable spots for the price.

revman
Jan 20, 2007, 10:00 PM
I know why they are doing it and they are right to do it. But, that is not the excuse they are telling people:



That which is in bold is what I object to. That is NOT true. GAAP does not require them to charge. That is a fact reinerated by the FASB board member.

Apple doesn't want to restate, fine. Just say that.


Do not confuse amounts paid with revenue recogntion. This is the core of the accounting, and the key to the GAAP interpretation.

ryboflavo
Jan 21, 2007, 03:57 AM
Let us not forget that Microsoft would never implement a technology ahead of time, and then only charge a $1.99 to make it available - they would implement a technology 4 years old and then charge two times as much, 2 years after the announced it.

Apple built-in the technology beforehand and is now making it available for $1.99, instead of having us wait for next line to make 802.11n available. The way I see it, I don't have to buy another computer to have this technology available to me or add external upgrades, etc.

At times, Apple spoils us and our reactions to annoucements like these stand as proof. I think paying $1.99 is worth the price of loyalty. Call me blind, call me fanboy, but at least I'm paying for the "future." Regardless of legality, Apple was thinking of how to make it easier for me to have this technology without waiting for future lines (e.g. MacBook) and for that I say thanks, with my $1.99!

oncost
Jan 21, 2007, 01:24 PM
An Apple service document obtained by MacRumors had previously indicated that the fee would be $4.99

anyone else as happy as me about saving $3? Yay!

other
Jan 21, 2007, 02:12 PM
Why didn't Apple have to charge customers who received the better speced Mac Mini? (1.5 GHz G4 etc.) I mean, it had a better CPU, GPU and probably something else. They didn't officially sell that hardware?

SeaFox
Jan 21, 2007, 02:30 PM
Why didn't Apple have to charge customers who received the better speced Mac Mini? (1.5 GHz G4 etc.) I mean, it had a better CPU, GPU and probably something else. They didn't officially sell that hardware?

No, they didn't. That was a lucky draw. They didn't make any marketing or packaging change between the old spec and new spec hardware immediately, you bought a "Mac Mini" and may or may not get a newer version. You bought assuming you got the lower spec, which is what Apple was advertising it as being. You found out when you got home. That's why these people claiming they should get the update for free are wrong. Apple never advertised these as being 802.11n capable, so they never bought the 802.11n ability to start with. There is no entitlement here.

In this case Airport case you had the lower hardware spec and were using it, and now Apple is offering something that add a new feature after purchase. I think the distinction is Apple is providing the enabler here, the features are changing from what the hardware was capable of out of the box. Apple was never obligated to ship an update to allow the 802.11n capability. They could have just continued to sell these chipsets as 802.11g and let the -n ability be completely unused.

With the Mac Mini, the hardware has the same abilities as it left the factory with. Nobody is getting anything extra six months later.

CJD2112
Jan 21, 2007, 04:14 PM
Two things have become readily apparent to me while sifting through the 9 pages of this topic.

1. Many people have a very difficult time understanding accounting and GAAP
2. Educated and respectful reasons for the charge have fallen on deaf ears

The reasons sighted for the charge (namely, revenue recognition pertaining to GAAP) are absolutely reasonable and correct. By enabling this substantial capability that was NOT advertised or implied, they admit that the product that was delivered was incomplete. According to GAAP, the revenue should be deferred until the product is complete. Apple obviously didn't do this. Companies and shareholders hate restatements. So charge a nominal fee and be done with it.

Apple did not do anything dishonest or out of the ordinary. Apple is complying with GAAP.

I completely agree with those who have stated that Apple would rather not have to charge it's customers for this. Apple is breaking even on this transaction at best.

I cannot understand the argument that Apple should charge and then issue a rebate. Please tell me why Apple should incur a cost to enable a substantial feature upgrade that you DID NOT PAY FOR. You paid for a computer with b/g capabilities and that is EXACTLY what was delivered to you. You are not being forced to upgrade, and this upgrade in no way reduces the capabilities that were promised to you for the fee that you paid.

Furthermore, Apple's conduct would not be considered unusual even if the company wasn't compelled by accounting standards to charge. Automobile manufacturers frequently increase the performance capabilities of their automobiles after several years to offer consumers new features and/or a more compelling reason to upgrade. These power increases are often achieved through programing changes in the engine's electronic control module (ECM). Was the prior model year capable of this better performance? Sure, but maybe the software changes (and required EPA testing) weren't quite ready for the prior model. Do automobile manufacturers make this "upgrade" available to customers who purchased an older model? NO.

Apple could have never released this upgrade and you would have been forced to do one of two things: create the drivers yourself (your time is worth money, believe it or not), or buy an add-on card--both of which would likely cost you more than $2. This was the more generous (and pro-consumer) approach. Apple is a business, Apple is not your friend. People need to realize this. This is not to say that consumers should not be outraged when a company engages in blantant anti-consumer behavior--it's just that this doesn't qualify as one of those instances.

Now to the quotes from the accountant and FASB member. You are aware that the question asked influences the response given, correct? Accounting is based on guidelines, precedent, and conservatism (not necessarily in that order). Generally Accepted Accounting Principles are just that--generally accepted. They provide businesses with recommended guidelines and approaches (though public companies are required to conform to GAAP). They do not provide a textbook explanation of every possible business scenario. As such, they are open to interpretation. Enter precedent. Were we ever in a similar situation? If so, how did we approach it? If not illegal or unethical, handle this situation in the same or similar manner. Never been in this situation before? Tread lightly. The principle of conservatism (accounting-wise, not political - haha) dictates that given two or more approaches, select the option to provides the least amount of risk. Is this option more cautious than necessary? Perhaps. Dealing with an SEC investigation isn't exactly a pleasant experience, however. Apple has had a recent run-in with the SEC. When you're under the microscope, you tend to be more cautious.

Sorry for the long post. Responding to 9 pages of comments takes a while.

Perfectly put =). I wish more people thought with reason instead of emotion...

SeaFox
Jan 21, 2007, 04:43 PM
Mostly true.

Eventually, wireless hotspots might offer N-speed service, once the dust has settled on the standard.

True, but its worth noting that Apple is not selling IEEE-standard N, as it doesn't exist yet. So even if you bought the -n capable card, and paid the upgrade fee, you still would not be able to connect to an -n hotspot at full speed, as that hot spot would not match Apple's spec.

So you still will have to get another software update later on, maybe even a hardware update to be -n standard.

Which makes this whining even more stupid, since technically Apple still does not offer -n standard ability, nobody does, as the spec is not finished yet.

I expect Leopard to have Apple's -n spec update included, and the full IEEE standard if it's finished at the time. If not, we may be having this same thread later this year when Apple makes the upgrade to the actual 802.11n standard available for a nominal fee. After all, you will be able to connect to other makers -n routers, whereas before it was just Apple's. That might be considered an upgrade by accounting standards.

obeygiant
Jan 21, 2007, 04:52 PM
Any word on when the "n" standard will be included with the new products?

SeaFox
Jan 21, 2007, 05:02 PM
Any word on when the "n" standard will be included with the new products?

Well, since we don't know when the standard itself will be done, that's impossible to say. It's been delayed a couple times. :rolleyes:

The problem is this is a hotly anticipated standard, there's a lot of pend up consumer demand for this, and many vendors have started shipping their own special versions of -n bandwidth wireless equipment. Meanwhile the industry group working on the standard has many hardware manufacturers on it. So they all want their own respective company's version of what 802.11n should be to become the standard so they have a leg up on the competition on hardware sales. I wouldn't be surprised if they use it as marketing fuel too ("The Linksys Speedbooster technology was chosen to be the new industry standard due to Cisco's innovative technology..." [gag])

But once its released, products that meet the hardware requirements should be firmware upgradeable to the standard. :D Products that don't will be replaced as soon as manufacturing ramp-up can be done, as nobody is going to want the non-standard hardware once the standard has been set.

EricNau
Jan 21, 2007, 05:16 PM
True, but its worth noting that Apple is not selling IEEE-standard N, as it doesn't exist yet. So even if you bought the -n capable card, and paid the upgrade fee, you still would not be able to connect to an -n hotspot at full speed, as that hot spot would not match Apple's spec.

So you still will have to get another software update later on, maybe even a hardware update to be -n standard.

Which makes this whining even more stupid, since technically Apple still does not offer -n standard ability, nobody does, as the spec is not finished yet.

I expect Leopard to have Apple's -n spec update included, and the full IEEE standard if it's finished at the time. If not, we may be having this same thread later this year when Apple makes the upgrade to the actual 802.11n standard available for a nominal fee. After all, you will be able to connect to other makers -n routers, whereas before it was just Apple's. That might be considered an upgrade by accounting standards.
OK, now you've lost me.

I realize that the standard hasn't been finalized (yet), but how is Apple's draft-n different from the 802.11n draft standard and other manufacturer's pre-n hardware?

...And how do you know that Apple's n spec won't match the IEEE 802.11n standard if it hasn't been finalized yet?

SeaFox
Jan 21, 2007, 05:35 PM
I realize that the standard hasn't been finalized (yet), but how is Apple's draft-n different from the 802.11n draft standard and other manufacturer's pre-n hardware?
Different manufacturers have different ways of implementing their solutions. One vendor may use multiple streams of small frequencies broadcast simultaneously, one may use a single stream of a vary large frequency range.

Have you noticed that some Pre-N routers have three antennae and some only have one? There's you hardware incompatibility right there.

If you're looking for past examples, look to Bluetooth 2.0, or the v.90 modem spec (K56Flex vs X2).

...And how do you know that Apple's n spec won't match the IEEE 802.11n standard if it hasn't been finalized yet?

We don't, but generally standards take the best parts out of multiple proprietary implementations. A standard a rarely the exact same as one company's own version (I like to think that's because no company knows how to do something 100% right) the reason is probably they would never get all members of the committee to agree to use a solution that is 100% one company's version (because of the marketing reasons I mentioned in my last post).

There were two HD-DVD starards at one time (no, I don't mean HD-DVD vs. BluRay, I mean just for HD-DVD). One version (I think Toshiba was the creator) offered more data capacity on a single layer of the disc, but a disc could only be one layer. Another offered multiple layers and a higher capacity for the entire disc. The final spec was only two layers but used Toshiba's formatting for the actual layers from what I remember (that was a while ago).

Edit: I think we've come along far enough that most manufacturers (including Apple) are using the draft N standard, so hardware issues are unlikely, but I'll bet you everyone has to institute a software patch of some sort later. If one company actually got their special spec approved, they wouldn't really need to issue a patch for their own equipment.

matticus008
Jan 21, 2007, 06:00 PM
I expect Leopard to have Apple's -n spec update included, and the full IEEE standard if it's finished at the time. If not, we may be having this same thread later this year when Apple makes the upgrade to the actual 802.11n standard available for a nominal fee.
Well no, because now that the functionality exists, any updates to it would be standard driver updates, which would not incur fees of any kind. The jump from a prerelease standard to a released standard, or to an extended/appended/revised standard does not constitute a material change. If the hardware turns out to be incompatible, however, Apple and a lot of other draft-n manufacturers are going to be royally screwed.

bousozoku
Jan 21, 2007, 06:36 PM
True, but its worth noting that Apple is not selling IEEE-standard N, as it doesn't exist yet. So even if you bought the -n capable card, and paid the upgrade fee, you still would not be able to connect to an -n hotspot at full speed, as that hot spot would not match Apple's spec.

So you still will have to get another software update later on, maybe even a hardware update to be -n standard.

Which makes this whining even more stupid, since technically Apple still does not offer -n standard ability, nobody does, as the spec is not finished yet.

I expect Leopard to have Apple's -n spec update included, and the full IEEE standard if it's finished at the time. If not, we may be having this same thread later this year when Apple makes the upgrade to the actual 802.11n standard available for a nominal fee. After all, you will be able to connect to other makers -n routers, whereas before it was just Apple's. That might be considered an upgrade by accounting standards.

I'm not disputing that it's going to be a while. It took long enough just to get a V.34 standard, a V.90 standard, and it took a very long time to for the dust to settle on 802.11b/g vs. 802.11a. Thankfully, we might see something toward the end of 2007.

As far as I'm concerned, the upgrade fee is a non-issue. I rarely use the wireless capabilities anyway but it's basically 3 chocolate bars. People waste a lot of money, why is this so terrible?

I still haven't figured out why Apple has to be a philanthropic organisation.

panoz7
Jan 21, 2007, 06:38 PM
Well no, because now that the functionality exists, any updates to it would be standard driver updates, which would not incur fees of any kind. The jump from a prerelease standard to a released standard, or to an extended/appended/revised standard does not constitute a material change. If the hardware turns out to be incompatible, however, Apple and a lot of other draft-n manufacturers are going to be royally screwed.

Every time I think I've finally figured this stuff out I read another post and my understanding goes out the windows. By the way, to all those accountants and lawyers who've patiently explained this 10000 times... thanks for humoring us.

I finally get why apple has to charge for the N updater this time around. I don't understand why apple won't have to charge for the next one. How does one know where the line between software update and "material change" is drawn?

As I figured it we are paying this fee since 802.11N is an entirely new standard that operates differently then previously implemented wireless standards. Can't the same be said for the final N standard when compared to the draft N standard that apple is selling us?

After reading most of this thread (and a few others that have appeared on the subject) I still feel as if apple royally screwed up on this. As I said previously, I understand why apple now has to charge this $1.99. IMHO, apple should have foreseen this, done the accounting differently, and avoided this whole PR mess entirely.

I'm not an accountant, and that's precisely the problem... most people who buy these computers (as certainly has been shown in this thread) aren't either, and have little understanding of accounting law. To me, and the general public I'd imagine, it doesn't matter whether accounting wise I payed for 802.11N or not... and even though I've learned it's not the case, it still seams like I did. The hardware's in my computer so someone had to pay for it, and seems as if we did, whether we knew it or not.