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View Full Version : Prominent Accountants Blast Apple's $1.99 802.11n Upgrade Reasoning




MacRumors
Jan 25, 2007, 09:06 AM
http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)

Some sites have been picking up on a recent Wall Street Journal article (http://online.wsj.com/article/SB116925153861582055.html?mod=home_whats_news_us) (paid subscription required) that quoted prominent accountants disregarding Apple's stated reasons for charging $1.99 for enabling 802.11n capability on Core 2 Duo based Macs and the Mac Pro.

A statement from Apple (http://www.macrumors.com/2007/01/18/802-11n-upgrade-fee-confirmed-at-1-99/) had previously blamed the charge on "generally accepted accounting principles", or GAAP. However, the Journal's interviewees do not agree.

"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. "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."

[...]

Still, Apple's language surprised officials who oversee accounting rules. "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."

The reaction from the Mac community appears to be mixed since the formal announcement from Apple. While many were happy to see the final price drop more than half from its previously rumored $4.99 pricetag, many others were frustrated at having to pay anything for hardware capability already in their systems.



0tim0
Jan 25, 2007, 09:11 AM
$1.99. Who cares? If you think that is so expensive, live without "n". You'll be just fine.

--t

AidenShaw
Jan 25, 2007, 09:12 AM
$1.99. Who cares? If you think that is so expensive, live without "n". You'll be just fine.
Isn't it the case that until you get rid of all your b/g kit, you'll be "living without n" anyway?

longofest
Jan 25, 2007, 09:12 AM
Note, its not the fact that Apple is charging that the accountants are blasting, but Apple's stated reasoning.

Us in the mac community seem to have two different beefs...

a) we don't like the fact that they are doing it at all
b) we don't like the reason they gave for it

(or none of the above)

combatcolin
Jan 25, 2007, 09:16 AM
Seems there disagreement over whether apple need to do this, so Apple are playing safe and charging.

Of course, you would think the obvious solution would be for Apple to talk to the regulatory body and simply ask them.

If the defense lawyers are confused then so must be the prosecution council.

Gasu E.
Jan 25, 2007, 09:21 AM
I didn't read the detailed criticisms, just the clipped quotes. But these indicate Apple is being criticized for the wrong reasons. Apple didn't say "GAAP requires us to charge something." Apple said, in effect, "if we don't charge something, GAAP may require us to consider the original product to be a partial shipment, which may require us to restate earnings." Even if Apple is right (and it is certainly a matter of opinion if they are), there is no "requirement that they charge something." Apple in any case has the option to restate earnings.

hob
Jan 25, 2007, 09:21 AM
I really really really want some news agency to use the word dubious to describe Apple in this :p

It does sound strange. Why charge $1.99? Why charge at all? $1.99 is such a token amount...

That's like £1. I sneeze £1. And I'm a student!

synth3tik
Jan 25, 2007, 09:23 AM
If I pau the $1.99 will depend on if I get the Airport, at which point 2 bucks is no big deal

Gasu E.
Jan 25, 2007, 09:25 AM
Of course, you would think the obvious solution would be for Apple to talk to the regulatory body and simply ask them.

Which regulatory body would that be? And what would they ask?

hob
Jan 25, 2007, 09:25 AM
Oh, and one further point. This only affects people that bought the very very latest Mac's, and the latest Airport base station, right? I don't understand the big deal - because surely it only affects a handful of people.

That being said, it is a little... dubious...

Phil A.
Jan 25, 2007, 09:27 AM
If I pau the $1.99 will depend on if I get the Airport, at which point 2 bucks is no big deal

If you get the new Airport base-station, you don't need to pay for the upgrade anyway because it's included in the box

Gasu E.
Jan 25, 2007, 09:28 AM
I really really really want some news agency to use the word dubious to describe Apple in this :p

It does sound strange. Why charge $1.99? Why charge at all? $1.99 is such a token amount...

That's like £1. I sneeze £1. And I'm a student!

Obviously because Apple thinks there is some principle involved. $1.99 just about covers their handling costs. It's preposterous to think that Apple is lying to cover up some profit-generating scheme, because there ain't no profit in this.

Copland
Jan 25, 2007, 09:28 AM
If I pau the $1.99 will depend on if I get the Airport, at which point 2 bucks is no big deal
Well, if you get the airport, you don't have to pay for the upgrade. (Edit: Woops, beat to it)

I'm of the opinion that it's fine. I'm currently quite in the red, but I could probably find $2 on the ground if I had/wanted to.

cherrypop
Jan 25, 2007, 09:28 AM
This draft n upgrade story is doing a great job of taking the focus off of the options story. Calculated?

vitrector
Jan 25, 2007, 09:29 AM
I really don't understand how this even is an issue. People buy a computer with certain capabilities, and presumably are happy with it. Then they get the opportunity to upgrade the software of the wireless chip for $1.99, less than most espresso drinks, and they get upset. This is just so blown out of proportion. I would have gladly paid the $4.99.
People are writing about this because AAPL is so popular right now, and there are all the knuckle-heads that think Apple, Inc. is abusing them by 2 bucks.
I think it is great to get n without having to buy another linksys or Apple base station right away.

brisully
Jan 25, 2007, 09:29 AM
That's like half a Starbucks latte. Big deal.

Diatribe
Jan 25, 2007, 09:31 AM
Why enable 802.11n at all?

We wouldn't have this discussion if Apple decided to just not enable it.
Would you feel better then?

Twenty1
Jan 25, 2007, 09:32 AM
Having sat through more accounting classes than I care to remember, the accountants are technically right about GAAP. Like any good Accountants, they are really nitpicking what Apple is doing (which is why I really hate accounting.)

If you remember the line from Pirates of the Carribean, GAAP is "more like guidelines."

Yes, GAAP doesn't require you do to many things - it's not a law per say. However, businesses constantly use the guidelines to recognize revenue in a way that is positive for them. You hear about it all the time if you follow any financial news.

Abstract
Jan 25, 2007, 09:32 AM
I wasn't sure what to vote this story on MR's front page. :o

Dagless
Jan 25, 2007, 09:33 AM
I'd rather it be free, but seeing I won't be getting an N wireless router I couldn't care less :)

Panu
Jan 25, 2007, 09:35 AM
$1.99 won't even buy a cup of coffee these days, so what's the big deal?

If someone says, "It's the principle of the thing," then I'd say, "You need to learn how to choose your fights."

twoodcc
Jan 25, 2007, 09:37 AM
I'd rather it be free, but seeing I won't be getting an N wireless router I couldn't care less :)

i'd rather it be free also.....i might eventually get the N wirless router.....mainly b/c of the usb drive ......but then i won't have to pay the fee, correct?

dejo
Jan 25, 2007, 09:38 AM
$1.99 won't even buy a cup of coffee these days, so what's the big deal?
You need to shop elsewhere besides Starbucks. ;)

RGunner
Jan 25, 2007, 09:39 AM
Big business just getting bigger... all about the bottom $$.

pale9
Jan 25, 2007, 09:40 AM
i would not have a problem at all if apple would have simply said they will charge $x.xx for the update. not that i want to pay, but they are running a business and they can charge whatever they want (even though almost nobody charges for firmware updates).

*however*, i hate being sold for a fool, and that is exactly what apple did by coming up with a totally bogus and stupid reason why 'they had to' charge for the update... yes, accounting rules made us do it! no, it is SOX!!!! wait, homeland security forced us to!

sccaldwell
Jan 25, 2007, 09:42 AM
My view:

Most people bought their existing systems without any clue that it might support 802.11n with a flash upgrade, so they DID NOT PAY expecting that functionality. Apple was under no obligation to ever provide 802.11n in those systems, either free or at a charge.

The fact that Apple has chosen to release a flash upgrade that WILL support it is a bonus. Nice of them to offer that upgrade for older systems. Sure, it would have been even nicer if it was completely free, but if you can afford a $1000 computer, then $1.99 is nothing to you. But if $1.99 isn't worth it to you for 802.11n, then don't pay it.

kalisphoenix
Jan 25, 2007, 09:44 AM
I'm glad to see that this idiotic argument can be sustained a little bit longer.

mkrishnan
Jan 25, 2007, 09:49 AM
You need to shop elsewhere besides Starbucks. ;)

True, but if you want good coffee, it still won't cost less than $2. :D

byamabe
Jan 25, 2007, 09:50 AM
I'm not an accountant, but I've been at enough small companies to know that revenue recognition is a sticky situation. If you deliver a product with incomplete functionality you can't recongnize the full revenue until the product is completely shipped. My assumption was that this was a CYA because Apple already recognized the full revenue for each of the affected systems. If they didn't charge the nominal fee, they would have to restate past earnings because they had shipped "incomplete" systems. The nominal fee lets them say this is "added" functionality.

UPDATED: I shouldn't say "have to restate past earnings", but some regulatory agency or busy-body shareholder group might bring action against them because of this technicality.

mdntcallr
Jan 25, 2007, 09:54 AM
it's silly to charge for a firmware update.

no other company does such. why apple?

also... i guess i wont be charged cause im getting the new base station. guess alot of people are.

shelterpaw
Jan 25, 2007, 09:57 AM
$1.99 won't even buy a cup of coffee these days, so what's the big deal?

If someone says, "It's the principle of the thing," then I'd say, "You need to learn how to choose your fights."
I understand your point as it's cheap, but it's the nickel and diming that makes me and others upset. You paid for the hardware already. This is just a firmware or driver update, so there's no reason to charge other than greed. Why not just charge the price for admission when you bought the computer?

I don't have a computer that'll effect me with the $1.99 (though I have a non-Apple wireless solution), but I don't think it's right. I still say it's nickely and diming.

Rocketman
Jan 25, 2007, 09:57 AM
Seems there disagreement over whether apple need to do this, so Apple are playing safe and charging.

Of course, you would think the obvious solution would be for Apple to talk to the regulatory body and simply ask them.

If the defense lawyers are confused then so must be the prosecution council.

I have direct experience trying to do that in a different industry. They are not at all helpful. Just like the IRS they give inaccurate information and then punish you when you follow their advise.

It is not like going to the local police station and getting a ruling or a verbal permit. Regulators justify their existance through fines and actions and make the rules as complicated and conflicting as possible to maximize "selective enforcement". Regulators make the rules unilaterally, yes they publish for public comment, but their reply to public comment 95% of the time is, forget you. I know I have done it.

It is under this enviroment Apple acted with an abundance of caution and made sure to make it as public and clear as possible they were doing it.

Rocketman

kalisphoenix
Jan 25, 2007, 09:58 AM
True, but if you want good coffee, it still won't cost less than $2. :D

I seem to have a hazy recollection of these things called "coffee machines." But then, I've always been delusional about things like this.

Lucky736
Jan 25, 2007, 10:01 AM
You don't think it costs Apple $$$$ to go back to the FCC to get this new capability certified and approved? You bought something that on the spec sheet states b & g. That's what you got. Pay the 2 bucks and you get n, otherwise you get exactly what you paid for in the first place.

Matthew Yohe
Jan 25, 2007, 10:01 AM
GAAP? Wasn't this an issue with the Sarbanes-Oxley Act?

shelterpaw
Jan 25, 2007, 10:02 AM
True, but if you want good coffee, it still won't cost less than $2. :D I make good coffee every morning. I buy San Francisco Coffee beans and I use my peculator or coffee press. Starbucks tastes awful. Peet's Coffee is worth paying for and you can get a nice cup for $1.35. Not the place for fru fru coffee drinkers. :p

aljlin
Jan 25, 2007, 10:03 AM
Big business just getting bigger... all about the bottom $$.
*shrug* big business is getting bigger, but not much bigger, and really apple isn't getting much bigger because of this. Thinking about it, How many of us are actually going to go get a Wireless-N Router right now just because we bought the 1.99 upgrade. Not sure what the big deal. ok if it was $5 or $10 I can see the frustration, but $1.99? Geez, is everyone that cheap? I mean it's only 2 dollars.. It's nothing compared to the wireless-n router that you are going to have to purchase! And realistically yes they never said that they were forced to, but it was just their choice to go this route rather than restating earnings. Just think about this, if they were to restate their earnings, as a business it would cost a LOT more for them to do that than doing this $2 dollar charge. It's BUSINESS. They're not here to lose money, and they could have tried to jip customers by forcing us to pay more for that since they could. . . I mean think about it, if people wanted it badly, they'd pay for it. as long as it's reasonable. $2 dollars, they're more likely to get a widespread purchase vs a $10 dollar price which will get a smaller amount or something like that. Just thinking of it business wise, for them to go through their earnings and re-state their earnings for the previous quarter, and also, having to distribute the cd's or stuff like that . . . (though i guess it could just be a software update in that case . . .) is likely to cost them significantly more to do that than to just pass this $2 dollar fee. It just seems to me to be more cost effective for them as a company to pass it on to us . . . sure it's 2 dollars out of our pockets, but ... *shrug* they're keeping it reasonable at least. If they were truly out to be profitable they'd ask for more ... just my opinion.

mkrishnan
Jan 25, 2007, 10:06 AM
I make good coffee every morning. I buy San Francisco Coffee beans and I use my peculator or coffee press. Starbucks tastes awful. Peet's Coffee is worth paying for and you can get a nice cup for $1.35. Not the place for fru fru coffee drinkers. :p

Well at home, yeah. Of course the great coffee I make at home costs less than $2. But that's a different matter. :D And I account for it differently. Although if you drink half my cup and intend to come back asking for a refill, I'm charging your ass $1.99 in order to comply with SOX. :D

FoxyKaye
Jan 25, 2007, 10:08 AM
I'll wager that within 10 minutes of the release of the "n" updater, a complete disk image or set of images will be posted on every peer-to-peer network in existence.

Honestly, I think Apple's reasoning on this is pretty idiotic as well, but there will also come a time when all new Macs will ship with 802.11n enabled. And in the meantime, if you're that set against buying the upgrade you can either live perfectly fine with your current b/g network for many years to come (knowing that if you buy a new Airport station it will ship with the "n" updater), or steal the updater from peer-to-peer networks.

Yes, it is the principle of the $2. However, everyone also pitched a fit when Apple started selling iLife as well, but here we all are mostly running the latest version.

phasornc
Jan 25, 2007, 10:08 AM
Remember when software companies routinely added new features in service packs? MS added the Windows Firewall, Greatly improved wireless configurator and several other useful features in XP Service Pack 2. However when the 7.01 update for Macromedia Studio came out, I remember reading on Macromedias site about how they brought back the timeline from MX, but they couldn't change the way it worked because that would have been adding new features which they implied would have been illegal.

So this is great, no companies are using post Enron laws as an excuse to give less value for your money. I think all US citizens should write to their representatives about this. I know our elected officials use software just like we do, and many are actually kind of geeky, and would love to take and issue like this that they could probably get bi-partisan consensus on, and have a brief moment in the sun with it.

MrSmith
Jan 25, 2007, 10:10 AM
Why is everyone quoting a cup of coffee as the measure of whether or not this is an acceptable payment? Some people don't drink coffee. And those that do are crazy to pay for what they have at home for a minute fraction of the price if they can only be patient enough to wait until they get there. Next you'll be buying air and trying to excuse it. Is this another example of the American Dream: The right to be shafted?

paradillon
Jan 25, 2007, 10:12 AM
Apple charged you as the consumer for the cost of the draft n card when you purchased the computer, I hardly believe they looked at the current price of a b/g wireless card and only charged for that portion of the component. Otherwise you would have to believe that Apple hasn't yet charged you for what they have already purchased from their supplier in the hopes you will pay them for it later.
Kind of double dipping. How would you do the accounting on that?

But ehhh... 2 bucks, there are bigger things to worry about. :rolleyes:

akac
Jan 25, 2007, 10:19 AM
i would not have a problem at all if apple would have simply said they will charge $x.xx for the update. not that i want to pay, but they are running a business and they can charge whatever they want (even though almost nobody charges for firmware updates).

*however*, i hate being sold for a fool, and that is exactly what apple did by coming up with a totally bogus and stupid reason why 'they had to' charge for the update... yes, accounting rules made us do it! no, it is SOX!!!! wait, homeland security forced us to!

Then i think you're being a bit self-centered. Apple is not playing you for a fool - they simply are trying to cover their bases and be very very careful with all the options stuff. From what I understand, its not GAAP but SOX they are concerned about.

Diatribe
Jan 25, 2007, 10:20 AM
Next you'll be buying air and trying to excuse it. Is this another example of the American Dream: The right to be shafted?

You are not paying for something you already have. Is that so hard to grasp?
You bought the computer without the n specification according to what Apple advertised.
Now if Apple upgrades the thing it is their choice to charge for it and yours to pay it.

Nothing will have changed the computer as you bought it.

Nobody requires you to pay. Nobody required Apple to offer the upgrade at all.
Just be happy that they did, I don't understand why this is so hard. :confused:

dernhelm
Jan 25, 2007, 10:21 AM
This smells like Apple wanting desperately to avoid some phantom accounting scandal that would simply never materialize. They were probably directed by some corporate lawyer that they better charge for it now, since they did not originally charge for 'n' functionality when they rolled out their systems. If they didn't the fear is that they would have to endure increased accounting scrutiny because they might be in violation of some crazy law or another. And as well all know the last thing Apple needs is increased accounting scrutiny.

This feels like a move made out of corporate paranoia, as opposed to a move made out of corporate greed. You'd have a hard time convincing me that Apple would feel it necessary or beneficial to squeeze their current customers for $1.99 just for '802.11n' functionality.

jebarne
Jan 25, 2007, 10:22 AM
It doesn't require you to change how you charge, but if you don't establish a price for the feature, the SOX requirements could cause the entire release revenue to be deferred until the features are fully activated or "fair value" is established for the feature.

By Charging $1.99, they're establishing fair value.

so both sides are accurate...the accounting guys are way too defensive on this.

jb

sblasl
Jan 25, 2007, 10:22 AM
We are burning our bridges.

Apple will definitely think twice before adding a feature that can be enabled in the future. With all of this whining and negative press what motivation would there be to do it?

Instead of receiving thanks & recognition, they are being clobbered.

Anyway, from my perspective - Thanks Apple, I do appreciate the forward thinking on your part and providing me with the latest & greatest wifi abilities.:cool:

Diatribe
Jan 25, 2007, 10:24 AM
We are burning our bridges.

Apple will definitely think twice before adding a feature that can be enabled in the future. With all of this whining and negative press what motivation would there be to do it?

Instead of receiving thanks & recognition, they are being clobbered.

Anyway, from my perspective - Thanks Apple, I do appreciate the forward thinking on your part and providing me with the latest & greatest wifi abilities.:cool:

At least some sane people in this thread.

eenu
Jan 25, 2007, 10:30 AM
Isn't it the case that until you get rid of all your b/g kit, you'll be "living without n" anyway?

No it is b/g compatible AFAIK.

I have said this across several of these threads and no one has listened to me....won't a clean leopard install enable this for us? And if not someone will hack it.

Thing i wonder is why not charge $0.01 why $1.99. When i have dealt with companies that want to give me something but have to charge so its shown on the books as being official etc they charge me £0.01p

valkraider
Jan 25, 2007, 10:30 AM
Everyone is missing the whole point. (although several people posted almost the same thing since I hit "reply" and finished typing my comment. So not EVERYONE is missing the point. (smile))

Apple does not HAVE to charge. They simply ARE charging to avoid a POTENTIAL issue with earning statements, which could be prudednt considering the scrutiny that Apple is under right now. Would people rather Apple have to submit to costly investigations and/or possibly pay fines?

Also, people are overstating who will need this.

1. You must have a Core 2 Duo MacBook or MacBook Pro sold before February 2007.
2. You must have a NON-APPLE 802.11n base station (or potential to have one in the future).

If you don't fall into BOTH of those - you don't need the update. That is a pretty small number of people who will be affected. MOST of the people who bought Core 2 Duo mac laptops will not even know about 802.11n - or care. For a LONG time we are going to be using b/g simply because of the prevalance of public acccess points..

If you buy the Apple base-station it COMES WITH THE UPDATE. So it really is almost a complete non-issue.

And I am getting an Apple base-station but I do not have any of the 802.11n ready cards, so if anyone wants to buy my update disk I will sell it for 99 cents US. HALF PRICE!!!!

:)

guzhogi
Jan 25, 2007, 10:30 AM
I don't like this. We already paid for the 'n' when we bought the computer. Now we have to pay for it again? Good thing this isn't Microsoft b/c I could see them say "Oh, let's not announce any of our new computer's features when we announce the computer, but still charge $1500 for it. After everybody has the computer, announce the features and make them pay an additional $1500 to use them!" I could see Apple (or anybody) charging for an add-in card that you buy after the computer, but not if it comes w/ the computer and then charging again for us to be able to use it. I know Apple has to do this w/ a certain law or something, but that law should change so that the consumers aren't paying for what people like the Enron execs did.

DaveTheGrey
Jan 25, 2007, 10:31 AM
1.
- 2$ isn't much
- nobody knew that the mac they bought would support N
- it's N for 2 bucks (aiport extreme card is 49,99$)
- you don't have to upgrade

2.
- it's hardware I already bought (even without knowing, I paid for the n card)
- it's not the apple way
- where can I buy this, do I need an apple store account, I don't have a credit card, no Apple Store around here...
- what about the future macs, will this become a regular method?


it's ok and it's not :confused: ;) :rolleyes:

Dave

Stella
Jan 25, 2007, 10:32 AM
Obviously because Apple thinks there is some principle involved. $1.99 just about covers their handling costs. It's preposterous to think that Apple is lying to cover up some profit-generating scheme, because there ain't no profit in this.

Let users download it free.

Apple allow other software to be loaded free i.e. iTunes.

kentrox99
Jan 25, 2007, 10:34 AM
It doesn't require you to change how you charge, but if you don't establish a price for the feature, the SOX requirements could cause the entire release revenue to be deferred until the features are fully activated or "fair value" is established for the feature.

By Charging $1.99, they're establishing fair value.

so both sides are accurate...the accounting guys are way too defensive on this.

jb

I think most people are missing the point here. There are no GAAP rules on what or how much you charge a customer for anything. It is strickly how Apple accounts for it. They did not have to charge anything as long as they accounted for it correctly. Apple is blaming the fee on accounting rules, but the rules have nothing to do with what they charge.

durvivor
Jan 25, 2007, 10:35 AM
GAAP? Wasn't this an issue with the Sarbanes-Oxley Act?

Yes, thank you... Yes, GAAP is not SOX.

Unless I mis-read last weeks reasoning that Apple is charging the fee due to SOX then today's article is comparing Umm, Oranges to Watermelons.

GAAP = Old, fundamental accounting rules.
SOX = New, lets prevent Enron from happening again.

Don't tell me that the new ford gets 20 miles to the gallon of gasoline and then come up with a feature article the next week that says, No, thats wrong, if you fill it with Diesel it will get 45 miles to the gallon. That car don't run on Deisel, you can't make the argument...

fatfish
Jan 25, 2007, 10:35 AM
I'm wondering how many people will actually end up paying this anyway. If you regularly use your laptap on public networks, well maybe once there are enough public networks using n. For most of us there will be little point in enabling n on your macs if you don't have a newer airport in which case you won't be paying for the upgrade anyway.

It stikes me there is a whole train load of people out there making far more money out of the story than apple ever will out of the upgrade

valkraider
Jan 25, 2007, 10:35 AM
I don't like this. We already paid for the 'n' when we bought the computer.

No, you didn't. If you can show me your receipt dated BEFORE 2007 with 802.11n listed in the specs - I will send you my unneeded update disk.

Your computer was sold to you with 802.11b/g.

Now we have to pay for it again?

No, you don't. Your Airport Extreme card will work as it has since day one without any additional purchases.

peharri
Jan 25, 2007, 10:36 AM
Seems there disagreement over whether apple need to do this, so Apple are playing safe and charging.


Quite. There's a huge amount of disagreement, why, Apple believe one thing, and the entire rest of the world including the actual people who administer the regulations believe a completely different thing!

First "We must announce iPhone six months in advance because otherwise the FCC will leak all the specs to Thinksecret", now "We must charge $1.99 for new functionality in existing products or else the Feds will imprison Jobs for stock fraud."

Looks like someone left the RDF generator on in Apple's legal department.

Stella
Jan 25, 2007, 10:39 AM
Since Apple have announced the 'N' spec'd cards, all capable Macs that are being shipped now, do they contain the drivers?

If so, why not , if not - does that not seem strange - for users to have to pay for drivers for hardware that has been announced?

Xyl
Jan 25, 2007, 10:41 AM
For those that saying it's for greed, you're wrong.
Apple sold 1.6 million Macs last quarter.
If every one of those bought the "N" upgrade, this would amount to 0.045% (yes, with the % sign) of their last quarter's revenue. :eek:

timber
Jan 25, 2007, 10:45 AM
802.11n wireless is a feature that requires hardware, firmware and software.

So, Apple aren't "forced" to offer it for free. Everybody bought 802.11g computers and Apple provided just that.

Lots of stuff comes with pieces of future features. I'm certain that my car with it's turbo diesel engine (I'm european...) is already prepared for (some fo) the next version higher horsepower output. But I'm not expecting that they improve my engine for free when the next evolution comes out.

They can charge for the upgrade. But they shouldn't base that on some wierd (and just not true) reason. They should be honest.

They are selling a feature. And that usually has a price like anything else.

But I think they should offer the stuff in the next Mac upgrade. Charging for something like this only helps to annoy their existing users. They have more to loose than to gain.

eenu
Jan 25, 2007, 10:47 AM
Since Apple have announced the 'N' spec'd cards, all capable Macs that are being shipped now, do they contain the drivers?

If so, why not , if not - does that not seem strange - for users to have to pay for drivers for hardware that has been announced?

I don't know if they ship with drivers but the machines are still in the tech specs as being .g not .n which like you say is strange!

jettredmont
Jan 25, 2007, 10:48 AM
1. Apple is making nothing off this. Seriously. $1.99 per n-shipped Mac, even if they got it, barely (if indeed it does) covers the cost of administering the deal. It certainly doesn't cover the "bad blood" relationship poisoning due to the program (which Apple knew full well would come about; you can't charge money for something without someone getting ticket off, even if none of that money actually makes it to your bank account).

2. It's the cheapest 'n' hardware you'll ever get. $2 to upgrade your computer from 'g' to 'n'? I'd gladly pay that, although I'm afraid my old non-Intel book isn't gonna make it.

3. The complication here is that Apple shipped hardware that cost extra, was disabled, and was unadvertised but discoverable. This is why we are in an accounting gray area. This is not a standard software update, nor is it a standard firmware update. It is enabling hardware that they never "sold", that cost them money to ship, and that one could argue drove some number of sales of its computers (because in some circles, like here, the 'n' capability was widely known). The argument they are guarding against is that of someone who bought with the understanding that 'n' capability was being shipped with the machines, with the knowledge that Apple had no reason to ship 'n' hardware unless it expected to use it. Then, that person didn't 'receive' their logically expected hardware until this quarter, well past when Apple reported the revenue. This is a no-no in GAAP, and explicitly illegal under SOx (for those wondering why they first said SOx and now say GAAP).

4. These general accountants, I am sorry, do not share any of the culpability Apple has if it does this wrong. Apple's being conservative here to avoid issues down the road. They've got enough current issues to deal with (which are due to following "standard" practices that many, many accountants tacitly approved in the previous ten years) that they don't need to risk more press time being spent on another "scandal" instead of their products.

Dont Hurt Me
Jan 25, 2007, 10:51 AM
Big business just getting bigger... all about the bottom $$.
Apple is king at squeezing every dollar out of its tech and its users. No doubt about it. No wonder they have a billion in cash in the bank.

eenu
Jan 25, 2007, 10:51 AM
lets put it this way. I won't need .n for a long time i may even have a new mac before then! But look at it this way, is it not nice that Apple were forward thinking enough to give me the hardware in my machine that will be nice and future proof? Not only that i bought it thinking it was .g ands now i find out for a measly £1-£2 i can future proof it! Awesome

xli_ne
Jan 25, 2007, 10:52 AM
if they offer the upgrade for free on all new macs purchased (which doesn't seem likely) I think its fair for c2d users to get it for free.

Most likely they will offer the 2 dollar upgrade as a custom option on their website and in the apple stores.

But I dont know if this falls into the same category to when they started offering glossy screens on their macbook pros either

Stella
Jan 25, 2007, 11:00 AM
Apple is king at squeezing every dollar out of its tech and its users. No doubt about it. No wonder they have a billion in cash in the bank.
Agreed. This sets a bad precendent for the future, perhaps.

For example:
Apple ship the iPhone.. and then demands more money to unlock hardware functionality from the user that the user has
already paid for.

"We gave the iPhone 3G hardware but didn't tell you. Now if you want to use it, pay us $50 to enable the 3G".

ChrisA
Jan 25, 2007, 11:01 AM
Does this even effect ANYONE?

OK so you have to pay $1.99 to enable "n". but why would you enable it unless you have a router then can also do "n". But if you buy the Apple router you get the enabler for free and don't have to pay $1.99

The only case where you would want to pay $1.99 is if you have an newer Mac and you plan to buy a non-Apple router. There are not many of these non-Apple routers around. I think we are talking about a very small number of users

Stella
Jan 25, 2007, 11:03 AM
Does this even effect ANYONE?

OK so you have to pay $1.99 to enable "n". but why would you enable it unless you have a router then can also do "n". But if you buy the Apple router you get the enabler for free and don't have to pay $1.99

The only case where you would want to pay $1.99 is if you have an newer Mac and you plan to buy a non-Apple router. There are not many of these non-Apple routers around. I think we are talking about a very small number of users

There are enough around - and cheaper too!

eenu
Jan 25, 2007, 11:06 AM
There are enough around - and cheaper too!

Got to agree with you there, the apple one is stupidly expensive!

Peace
Jan 25, 2007, 11:09 AM
Since Apple have announced the 'N' spec'd cards, all capable Macs that are being shipped now, do they contain the drivers?

If so, why not , if not - does that not seem strange - for users to have to pay for drivers for hardware that has been announced?

Stella the only hardware Apple is selling and advertising now with the draft-n spec is the :apple: TV and the Airport Extreme Base Station.

I'm guessing as soon as the first :apple: TV or Airport ships any draft-n spec'd Mac will have the N updated.Until Feb. 1st no Apple product ships with the N updated.

On a side note I make my own espresso's :)

valkraider
Jan 25, 2007, 11:12 AM
if they offer the upgrade for free on all new macs purchased (which doesn't seem likely) I think its fair for c2d users to get it for free.

Most likely they will offer the 2 dollar upgrade as a custom option on their website and in the apple stores.

But I dont know if this falls into the same category to when they started offering glossy screens on their macbook pros either

No. The cost of the new computer will reflect the 802.11n installed within it.

Look. Here is the problem in simple english.

Apple sold computers that it ADVERTISED with 11b/g specs in one quarter. For their financial statements they said "we made $x amount selling computers with 11b/g specs in this quarter". That statement impacts their stock values.

Now, if they were to go back and say "Oh actually, we sold computers last quarter that *really* had 11n cards, but you can't use them till this quarter" then THEORETICALLY they could be required to restate earnings from those computers and move them into this quarter, which would play all kinds of havoc with stock values - AND, most importantly, open them up for more investigation.

So, to play it safe - they are not taking any chances. They get to say "we made $x on the computers last quarter, and we made $x this quarter upgrading them to 11n". No restatements needed, everything is above ground.

From here on out, the computers will come with 11n and that "capability" will be represented in their earning statements.

But every time a person says "they suck, I want this for free" you are telling Apple - "hey, don't bother with future hardware upgrades because no matter what you do we will bitch about it".

I would rather Apple charge for the few upgrades than have to raise prices acrosss the board to cover fees and fines if they get called on it and investigated or whatever...

Rocketman
Jan 25, 2007, 11:14 AM
1. Apple is making nothing off this. Seriously. $1.99 per n-shipped Mac, even if they got it, barely (if indeed it does) covers the cost of administering the deal. It certainly doesn't cover the "bad blood" relationship poisoning due to the program (which Apple knew full well would come about; you can't charge money for something without someone getting ticket off, even if none of that money actually makes it to your bank account).

2. It's the cheapest 'n' hardware you'll ever get. $2 to upgrade your computer from 'g' to 'n'? I'd gladly pay that, although I'm afraid my old non-Intel book isn't gonna make it.

3. The complication here is that Apple shipped hardware that cost extra, was disabled, and was unadvertised but discoverable. This is why we are in an accounting gray area. This is not a standard software update, nor is it a standard firmware update. It is enabling hardware that they never "sold", that cost them money to ship, and that one could argue drove some number of sales of its computers (because in some circles, like here, the 'n' capability was widely known). The argument they are guarding against is that of someone who bought with the understanding that 'n' capability was being shipped with the machines, with the knowledge that Apple had no reason to ship 'n' hardware unless it expected to use it. Then, that person didn't 'receive' their logically expected hardware until this quarter, well past when Apple reported the revenue. This is a no-no in GAAP, and explicitly illegal under SOx (for those wondering why they first said SOx and now say GAAP).

4. These general accountants, I am sorry, do not share any of the culpability Apple has if it does this wrong. Apple's being conservative here to avoid issues down the road. They've got enough current issues to deal with (which are due to following "standard" practices that many, many accountants tacitly approved in the previous ten years) that they don't need to risk more press time being spent on another "scandal" instead of their products.

This post is a keeper.

iomar
Jan 25, 2007, 11:17 AM
Well, I have the macbook pro Intel. I don't think I have the capability on my computer, but if I have to pay $1.95 I will still pay to get better connection.

nospleen
Jan 25, 2007, 11:20 AM
Wah, wah.... We paid for G, but were lucky enough to get an 'n' card. It is 2 freaking bucks... I don't see the big deal... I say kuddos to Apple for sending them out with 'n' cards in the first place.

eliotw
Jan 25, 2007, 11:22 AM
Whaaaaaaaaaa!:eek:

Stridder44
Jan 25, 2007, 11:23 AM
I don't like this. We already paid for the 'n' when we bought the computer. Now we have to pay for it again? Good thing this isn't Microsoft b/c I could see them say "Oh, let's not announce any of our new computer's features when we announce the computer, but still charge $1500 for it. After everybody has the computer, announce the features and make them pay an additional $1500 to use them!" I could see Apple (or anybody) charging for an add-in card that you buy after the computer, but not if it comes w/ the computer and then charging again for us to be able to use it. I know Apple has to do this w/ a certain law or something, but that law should change so that the consumers aren't paying for what people like the Enron execs did.


No kidding! I paid for @#$% 802.11n when I bought the damn computer. I shouldn't have to told one day "oh, by the way, that price tag you paid? That was only for part of the computer. To get the other half, we charge a fee...". It's not the $1.99. That's pocket change. It's the fact that Apple lied that a computer didn't have a certain feature when it actually did all along. Being asked to pay for it is ridiculous!

In the end it doesn't matter I guess, someone's gonna make a hack that enables it anyway.

eenu
Jan 25, 2007, 11:26 AM
I shouldn't have to told one day "oh, by the way, that price tag you paid? That was only for part of the computer. To get the other half, we charge a fee..."



GET REAL! You bought it advertised as g.

timon
Jan 25, 2007, 11:28 AM
You did pay for the hardware but you DID NOT pay for the firmware.

As other have said here Apple is protecting themselves from any legal action by charging for the firmware to run "N". That's fine by be as I really don't need the share price of my stock to go down because of some fool taking legal action because Apple had to restate earnings or Apple being required to waste money restating earnings.

So stop you crying!



I don't like this. We already paid for the 'n' when we bought the computer. Now we have to pay for it again? Good thing this isn't Microsoft b/c I could see them say "Oh, let's not announce any of our new computer's features when we announce the computer, but still charge $1500 for it. After everybody has the computer, announce the features and make them pay an additional $1500 to use them!" I could see Apple (or anybody) charging for an add-in card that you buy after the computer, but not if it comes w/ the computer and then charging again for us to be able to use it. I know Apple has to do this w/ a certain law or something, but that law should change so that the consumers aren't paying for what people like the Enron execs did.

TheBobcat
Jan 25, 2007, 11:35 AM
These general accountants aren't the ones under the microscope and the ones who will be blasted if the SEC or whoever finds a reason to decide to investigate this. Apple is taking enough heat already, I would say its in the best interest of AAPL to play it safe. The last thing we need is someone coming after Apple about this since we already know how popular it is to go after them.

And if you really can't afford it, go halfsies with a friend, or eight friends, or millions of friends on LimeWire. I doubt this will require activation or confirmation of your Genuine OS X. In fact, if you sadly are in poverty of third world proportions to the point where you can't spend two dollars on something you really don't even need, buy an AirPort Base Station, install the software, then take it back. Obviously Apple will understand if such a large base of its customers are that poor.

And shame on the people who are all upset at Apple for its explanation. They don't owe us an explanation at all, and then they try and everyone gets mad.

You're basically getting your "n" for free, when you (say it with me) DID NOT PAY FOR 802.11n FUNCTIONALITY.

timon
Jan 25, 2007, 11:35 AM
For a change someone ask a really good question.

I thing not yet as they have not yet update the specification on the web site.

Communications
Built-in 54-Mbps AirPort Extreme Card (802.11g standard) (3)
Built-in Bluetooth 2.0+EDR (Enhanced Data Rate) module (1)
Built-in 10/100/1000 BASE-T Gigabit Ethernet (RJ-45 connector)
Works with 56K V.92 Apple USB Modem (sold separately)

Once they do then the answer would be yet. I don't think they will change the specifications until "N" is signed off by the standards board.


Since Apple have announced the 'N' spec'd cards, all capable Macs that are being shipped now, do they contain the drivers?

If so, why not , if not - does that not seem strange - for users to have to pay for drivers for hardware that has been announced?

Stridder44
Jan 25, 2007, 11:35 AM
Since Apple have announced the 'N' spec'd cards, all capable Macs that are being shipped now, do they contain the drivers?

If so, why not , if not - does that not seem strange - for users to have to pay for drivers for hardware that has been announced?

That's a good point. Now that they've announced that Macs have the "n" spec, they shouldn't be charging. And if they are still, then they should be required to have in big bold letters ($1.99 fee to use "n")

Stridder44
Jan 25, 2007, 11:38 AM
GET REAL! You bought it advertised as g.

Get real? The only reality here my friend is that Apple lied and sold us a computer with different specs than were shown. You don't sell a car and tell people it has 300hp only to tell the person as they're signing for it that it actually has 340hp, but the extra 40hp is gonna cost ya...

And now that this is in the open there is no reason at all for Apple to charge for "n" on any new Macs. We all know it has "n", so they need to stop lying and saying it doesn't.

eenu
Jan 25, 2007, 11:44 AM
Get real? The only reality here my friend is that Apple lied and sold us a computer with different specs than were shown. You don't sell a car and tell people it has 300hp only to tell the person as they're signing for it that it actually has 340hp, but the extra 40hp is gonna cost ya...

Really? did you not know that pretty much every car on the road is limited to a top speed? Take the bugger to a garage and make a few adjustments and you can squeeze more out of it. Add a new air filter and get an extra 20bhp etc etc

Cars are limited in so many ways. Apple has given you a gift on a plate. You bought it thinking it was .g and for a measly $2 you can have the future .n.

If i was Apple and reading this i would think you know what **** them all we won't release the $2 unlock and if they care that much we will take their lappys and machines in free of charge and put a .g card in for them. You would rather apple took your machine in for free and did that for you?

EDIT: You would have moaned had it had a .g card in and then .n was released and you had to buy a new card and have it fitted! I can't understand people who can't see they are actually lucky apple thought a head for you!

macnews
Jan 25, 2007, 11:47 AM
You did pay for the hardware but you DID NOT pay for the firmware.

As other have said here Apple is protecting themselves from any legal action by charging for the firmware to run "N". That's fine by be as I really don't need the share price of my stock to go down because of some fool taking legal action because Apple had to restate earnings or Apple being required to waste money restating earnings.

So stop you crying!

I don't care what was or wasn't paid for. What I do care is it appears Apple lied - or at least that is what the accountants are saying, even if not directly, let's call a spade a spade.

IF that is the case, yes, I am pissed. If Apple has just taken a conservative route based on all the stock options, re-stating earnings companies have been doing in wake of corporate scandals than fine.

I only see four options for this excuse:

1. The WSJ accountants are wrong, and Apple was right.

2. Apple took advice from it's accountants and they were wrong (meaning someone should be fired).

3. Apple wasn't clear (and their accounting dept) on the rules and played it safe (most likely someone should be reprimanded at least if not fired given how it makes Apple look incompetent)

4. Apple out and out lied.

That leaves me 1 out of 4 reasons to trust Apple. Not great odds. Apple doesn't come out looking rosy on this regardless of the price or what it is for.

timon
Jan 25, 2007, 11:53 AM
It's very common for hardware to have features that are never turn on by the manufacture. That does not mean that they lied about the specifications. If the manufacture wants to turn on the feature at a later date they have the right to charge for it.

As for charging current shipments, yes there is until the "N" specification is signed off, which should happen soon, and Apple changes the published specifications. If someone is worried about the $1.99 then wait until it's released.

What can I say other than PEBCAC.




Get real? The only reality here my friend is that Apple lied and sold us a computer with different specs than were shown. You don't sell a car and tell people it has 300hp only to tell the person as they're signing for it that it actually has 340hp, but the extra 40hp is gonna cost ya...

And now that this is in the open there is no reason at all for Apple to charge for "n" on any new Macs. We all know it has "n", so they need to stop lying and saying it doesn't.

whatever
Jan 25, 2007, 12:08 PM
What I find really funny about this is that Apple has not officially announced anything. Until there is an official announcement on the Apple website or they actually make this available in the Apple Store isn't all of this just speculation and rumor. Kind of like the Octo Core Mac and the G5 Powerbook.

And here we are with yet another thread about this. Talk about a slow news day. This should be a 2nd page thread at most.

Let's think about this for a second. The rumor is that Apple may or may not offer a patch to add support for 802.11n to their latest Airport Extreme Cards and they may or may not charge between $1.99 and $4.99 for such a patch.

Stella
Jan 25, 2007, 12:17 PM
What!?

But commenting on speculation and rumor is fun :-D
What I find really funny about this is that Apple has not officially announced anything. Until there is an official announcement on the Apple website or they actually make this available in the Apple Store isn't all of this just speculation and rumor. Kind of like the Octo Core Mac and the G5 Powerbook.

And here we are with yet another thread about this. Talk about a slow news day. This should be a 2nd page thread at most.

Let's think about this for a second. The rumor is that Apple may or may not offer a patch to add support for 802.11n to their latest Airport Extreme Cards and they may or may not charge between $1.99 and $4.99 for such a patch.

jettredmont
Jan 25, 2007, 12:17 PM
Agreed. This sets a bad precendent for the future, perhaps.

For example:
Apple ship the iPhone.. and then demands more money to unlock hardware functionality from the user that the user has
already paid for.

"We gave the iPhone 3G hardware but didn't tell you. Now if you want to use it, pay us $50 to enable the 3G".

Given that Apple is asking only $2 for 'n' functionality, I think the hypothetical would be more like $5 for 3G.

Still, even at $50, I know several people that would jump at the opportunity, and many many others who just wouldn't care (use what they bought).

globalhemp
Jan 25, 2007, 12:19 PM
President Clinton allowed GPS hardware to "automagically" be 10 times more capable (wow! imagine that sort of upgrade) -- and at no charge to consumers! This didn't require new hardware, nor soft- or firmware upgrades in this case. Once again, it didn't cost anything which is pretty amazing when you figure the federal government is involved...

WIRED magazine, "Clinton Unscrambles GPS Signals" (http://www.wired.com/news/politics/0,1283,36021,00.html), May, 01, 2000

[Excerpted]

President Clinton on Monday gave the go-ahead for letting boaters, motorists, and hikers use a satellite-navigation system with the same pinpoint accuracy as the military has long enjoyed.

Clinton ordered that at 8 p.m., EDT on Monday night, the U.S. military stop intentionally scrambling the satellite signals used by civilians to improve the accuracy of Global Position System receivers tenfold.

Consumers who have bought GPS receivers for boats, cars, or recreation will find that they are 10 times more accurate when the military ceases disruption of the signal beamed down from orbiting GPS satellites. The White House said it should generate greater acceptance of the system.

freediverdude
Jan 25, 2007, 12:20 PM
Well the whole thing doesn't really make sense. It's not the $2, it's that the story doesn't make sense.

On the one hand, they're saying that SOX is telling them that the computers might be considered "not complete" as shipped, with this new firmware upgrade to the wireless card, and then consequently they would have to restate earnings.

On the other hand, they're now saying that they're going to sell the firmware upgrade as a paid upgrade costing $1.99.

Well they can't have it both ways. Either the upgrade "completes the computer as shipped" or it doesn't. One or the other. Regardless of whether people are paying for the upgrade. Just making people pay for the upgrade doesn't make the upgrade a separate purchase, if the computer wasn't considered complete at the time of shipment.

Looking at it from the opposite direction, if the computers were considered complete at the time of shipment, and the upgrade is considered a separate upgrade purchase, then Apple shouldn't have to charge for it or restate earnings, if they give it away for free, because the computer was complete at the time of shipment. So, sorry SOX, but you can't have it both ways.

Stella
Jan 25, 2007, 12:20 PM
Given that Apple is asking only $2 for 'n' functionality, I think the hypothetical would be more like $5 for 3G.

Still, even at $50, I know several people that would jump at the opportunity, and many many others who just wouldn't care (use what they bought).

True, but personally, IMO, its the principle. Apple shouldn't charge users for the drivers for the hardware they already have, especially when others suggest that Apple's logic is at fault.

kentrox99
Jan 25, 2007, 12:24 PM
These general accountants aren't the ones under the microscope and the ones who will be blasted if the SEC or whoever finds a reason to decide to investigate this. Apple is taking enough heat already, I would say its in the best interest of AAPL to play it safe. The last thing we need is someone coming after Apple about this since we already know how popular it is to go after them.

That's the best one I've heard all day. Ever heard of the PCAOB?
http://www.pcaobus.org

Play it safe from what? How is charging a fee playing it safe? GAAP could care less about how much or if you charge a fee at all. That is up to Apple to work out with its customers. GAAP simply requires it to be accounted for properly. "Revenue Recognition" DOES NOT EQUAL "Fees Charged".
Play it safe? They don't have to charge a dime as long as they account for it correctly. It was Apple's decision to charge a fee. There are no rules or laws requiring a fee, just proper accounting.

eenu
Jan 25, 2007, 12:28 PM
True, but personally, IMO, its the principle. Apple shouldn't charge users for the drivers for the hardware they already have, especially when others suggest that Apple's logic is at fault.

But isn't the whole reason they have to due to accounting reasons? Whether it 1 cent or 1 million dollars....

bearbo
Jan 25, 2007, 12:31 PM
What I find really funny about this is that Apple has not officially announced anything. Until there is an official announcement on the Apple website or they actually make this available in the Apple Store isn't all of this just speculation and rumor. Kind of like the Octo Core Mac and the G5 Powerbook.

And here we are with yet another thread about this. Talk about a slow news day. This should be a 2nd page thread at most.

Let's think about this for a second. The rumor is that Apple may or may not offer a patch to add support for 802.11n to their latest Airport Extreme Cards and they may or may not charge between $1.99 and $4.99 for such a patch.

i believe it's confirmed, by their own spokesperson

revman
Jan 25, 2007, 12:35 PM
No kidding! I paid for @#$% 802.11n when I bought the damn computer. I shouldn't have to told one day "oh, by the way, that price tag you paid? That was only for part of the computer. To get the other half, we charge a fee...". It's not the $1.99. That's pocket change. It's the fact that Apple lied that a computer didn't have a certain feature when it actually did all along. Being asked to pay for it is ridiculous!

In the end it doesn't matter I guess, someone's gonna make a hack that enables it anyway.

WOW! So you are EXACTLY the reason they are charging! You think that n was implied when you bought it. SO THE ACCOUNTING RULES WOULD FORCE THEM TO DEFER ALL REVENUE UNTIL THIS WAS DELIVERED.

:-) Welcome to the world according to GAAP

tyroja00
Jan 25, 2007, 12:38 PM
4. These general accountants, I am sorry, do not share any of the culpability Apple has if it does this wrong. Apple's being conservative here to avoid issues down the road. They've got enough current issues to deal with (which are due to following "standard" practices that many, many accountants tacitly approved in the previous ten years) that they don't need to risk more press time being spent on another "scandal" instead of their products.

What you guys don't understand is that Apple has essentially passed the buck off on the accountants and their profession. So of course they aren't too happy. Remember, it is the auditors who get sued first. Ask the partners of Arthur Andersen. Oh what, they don't exist anymore after Enron.

This is so simple.

1) Apple was faced with a threat of a restatement.

2) They did not want to restate for obvious reasons.

3) They find a loop-hole by charging.

4) They don't want their customers to view them as the bad guys.

5) They take the calculated risk that their fanbase knows nothing about the accounting profession and will pretty much stand behind them no matter what.

6) They blame the accountants. They don't use Macs anyway. A lot of accountants would have appreciated Apple's attempts if they weren't getting lied about. Call it what you like, but Apple has not clarified their statement.

That's it. Actually, I think that this will backfire on Apple, as the SEC will now look at them more closely to try and make Apple look bad to the rest of the ~90% computer users.

kentrox99
Jan 25, 2007, 12:42 PM
6) They blame the accountants. They don't use Macs anyway.

That's it.

Hey. I take offense :rolleyes:
I'm an accountant and use 2 macs

tyroja00
Jan 25, 2007, 12:46 PM
Hey. I take offense :rolleyes:
I'm an accountant and use 2 macs

My bad, that was a generalization. I used to be an auditor myself. I use mac. But resent how naive Apple thinks I am.

I am happy to pay for the update though.

merlin
Jan 25, 2007, 12:50 PM
I can't believe this discussion is even happening.

jbernie
Jan 25, 2007, 01:01 PM
Why not call it a service pack and charge nothing for it?

It is only $2 to you but it could a lot of $$$ to Apple if enough people upgrade.

Sell it via iTunes?

HumanJHawkins
Jan 25, 2007, 01:03 PM
Of course, you would think the obvious solution would be for Apple to talk to the regulatory body and simply ask them.

You would think so, but have you ever tried that? They can't answer that kind of question for a number of reasons... 1) If this were allowed, they would get so many requests for answers to questions that they couldn't do anything else... That's why lawyers can charge the big bucks. And 2) Because that is legal advice. And if they got anything wrong, another agency could interpret the issue differently and charge or sue Apple. Then they would be responsible because Apple was just acting on their advice.

It's kinda like when I had a building inspection... Just some simple steps outside of a door. The guy could tell me that I was out of compliance as far as the material I had used for the landing, but could not answer any questions about what material I would need to use to make it compliant!

nagromme
Jan 25, 2007, 01:03 PM
I don't mind $2, especially since I won't pay it until and unless I have anything to connect TO regularly that uses n speeds. Which may be a long time coming. Meanwhile I'm glad my machine has a surprise additional capability that I didn't know I was getting when I bought the machine!

The whole thing is weird, though, and .25 would make more sense for a token charge. Maybe it's caused only INdirectly by accounting, along the lines of "this makes it easier" rather than "this is required with no legal alternative." So they are doing this to prevent other effects on their accounting, and are not actually lying. If, on the other, Apple IS lying, why not go for the full $4.99? :p It's also possible someone simply spoke out of turn about something they didn't understand--something that has been discussed but not decided. Is the $1.99 figure on Apple.com yet?

I've also kind of assumed that this "added functionality" thing--if true--applied to hardware (which fits this case) and not software (which fits all the free Software Updates from Apple). I'm only speculating. I suspect this has been mentioned in posts I skipped over though :)

(Interesting how more peope voted that this is OK without explanation than WITH :D )

bcrawf
Jan 25, 2007, 01:06 PM
Apple did a good thing by building-in (in recent Macs) the ability to update to "n." If charging a couple bucks for that now instead of just putting it on Software Update will keep the legal opportunists from dragging it into court, that's great.
Bob

pr43
Jan 25, 2007, 01:10 PM
GAAP? Wasn't this an issue with the Sarbanes-Oxley Act?

To answer a number of issues:

1. This is not a SOx issue. SOx is about the reliability of internal controls and published financial statements.

2. SOx does require thorough documentation of business policies and procedures and I suspect proper functioning of SOx compliance within Apple probably "caught" this issue. Why this issue was raised now and not at the time the "n" chipset equipped MBP were shipped is a substantive issue.

3. The statement from members of the accounting rulemaking bodies (FASB and SEC) that GAAP does NOT tell the company what to charge is living in denial. Rules dictate behavior. Companies set their pricing policies and sales terms to achieve a desired result -- generate revenue that can be reported. This is Darwinism applied to accounting -- adaptation to changing regulatory environment. To suggest accounting rules do not dictate how or what a company charges for it products/services may be accurate in the vacuum of accounting theory; but that statement is wholly void of any sound business reality of judgment.

4. Apple blaming the accountants is ridiculous. They are a big company and should have a staff of qualified, technically-literate accountants, who should have long ago identified this issue. The accounting profession is being arrogant to suggest the FASB and SEC rules do not affect corporate behvior. What should have occurred was the accounting profession loudly stating the obvious -- these revenue rules were promulgated in 1997 -- more than seven years ago! This should not be a surprise to Apple and they blew it themselves. "They made me do it" was never an excuse to be tolerated from a ten year old. Why should Apple think they can you that excuse now.

whatever
Jan 25, 2007, 01:19 PM
i believe it's confirmed, by their own spokesperson
Like I said, it's not on their website or officially announced by Apple.

Who is Lynn Fox? Did CNET say that this was from an official Apple Press Report?

Is it common for Apple to announce things concerning pricing with only a Spokesperson, without putting anything up on their website or an official Press Release?

Please think about this for a moment. The statement was quoted a week ago and still not official word from Apple.

This is 100% false.

dejo
Jan 25, 2007, 01:25 PM
Who is Lynn Fox? Did CNET say that this was from an official Apple Press Report?
Yeah, who IS Lynn Fox? :confused: All I know is that Teresa Brewer, Apple’s Mac hardware public relations manager was quoted in a MacWorld article (http://www.macworld.com/news/2007/01/18/80211nfee/index.php) as saying:
“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”
And I've no reason to believe that MacWorld would make this up.

benpatient
Jan 25, 2007, 01:26 PM
Funny how apple didn't retroactively have to "account for" the UNPUBLISHED increase in mac mini speeds last year.

If they were really interested in making this "consumer friendly" and just trying to watch their behind, they could easily charge 99 cents for it instead of 1.99, and include in the software a code for a free song download "coupon" from the iTMS.

benpatient
Jan 25, 2007, 01:29 PM
and also, how can apple justify not charging for the update to Aperture 1.5?

it has features that weren't advertised or present in shipping copies of Aperture 1.0....

(such as the feature where it works)

mdawson
Jan 25, 2007, 01:34 PM
For a change someone ask a really good question.

I thing not yet as they have not yet update the specification on the web site.

Communications
Built-in 54-Mbps AirPort Extreme Card (802.11g standard) (3)
Built-in Bluetooth 2.0+EDR (Enhanced Data Rate) module (1)
Built-in 10/100/1000 BASE-T Gigabit Ethernet (RJ-45 connector)
Works with 56K V.92 Apple USB Modem (sold separately)

Once they do then the answer would be yet. I don't think they will change the specifications until "N" is signed off by the standards board.

The thing is... the standard won't be signed off on until 2008.

mdawson
Jan 25, 2007, 01:37 PM
I can't believe this discussion is even happening.

The problem isn't the $2, it's the fact that this sets a dangerous precedent for charging for future firmware updates.

We all love our Apple products, or else we wouldn't be here. That doesn't mean we have to love all Apple's decisions.

CJD2112
Jan 25, 2007, 01:42 PM
If this is just a firmware update, what are the chances of the firmware update "floating around" cyber space and into the hands of Mac users?

kentrox99
Jan 25, 2007, 01:46 PM
3. The statement from members of the accounting rulemaking bodies (FASB and SEC) that GAAP does NOT tell the company what to charge is living in denial. Rules dictate behavior. Companies set their pricing policies and sales terms to achieve a desired result -- generate revenue that can be reported. This is Darwinism applied to accounting -- adaptation to changing regulatory environment. To suggest accounting rules do not dictate how or what a company charges for it products/services may be accurate in the vacuum of accounting theory; but that statement is wholly void of any sound business reality of judgment.

Wow. I almost spit out my coffee on that one.
Please show me where the FASB or SEC requires that a company make "sound business judgements". They could care less if a company "achieves a desired reslut". Apple is not required to stay in business. Anything under the sun can have an affect on prices, but do they require you to set them a certain way? No. Apple knows what the rules are and it is up to them to make sound business judgements.

guzhogi
Jan 25, 2007, 01:49 PM
No, you didn't. If you can show me your receipt dated BEFORE 2007 with 802.11n listed in the specs - I will send you my unneeded update disk.

Your computer was sold to you with 802.11b/g.



No, you don't. Your Airport Extreme card will work as it has since day one without any additional purchases.

Actually, I did pay for it, whether it was listed in the specs or not. If someone sold you a rose but it was advertised just as a flower, does that mean that it's not a rose? And after you buy it, the guy you bought it from says "Oh, this is a rose, so you'll have to pay $1 more to call it a rose." Just because it's not advertised as 'n' doesn't mean it isn't one.

While I admit some software you should pay for like film editing, word processing, etc. b/c it's for a feature you don't have and your computer isn't made specifically for that purpose. But with the C2D computers, they already have 'n', even though Apple didn't advertise it. Plus, these cards were specifically designed to run n as well as b & g. What I'm saying is that we paid for 'n' cards, whether we knew it or not. The $1.99 is indeed cheep, but this is about the principal of having to pay anything at all.

kingtj
Jan 25, 2007, 01:57 PM
First of all, my reaction to this whole thing was that Apple was trying to poke a stick in the eye of govt. that created accounting rules like SOX. (They get investigated for violating federal laws on handling their stocks, so they "return fire" by trying to piss off their customers with new charges for firmware updates - claiming it's all due to this type of government legislation.)

Second, Apple has a long history of charging for some updates/upgrades while giving the others away free. (Hell, you can't even get a copy of Quicktime bundled with ANY version of MacOS without paying Apple $20 or so to eliminate all the built-in advertising, telling you to "Go Pro!" with a fully functional version.) Personally, I'm just fine with it if Apple feels I should pay them $1.99 or whatever, any time I want a flash upgrade to a piece of their hardware that adds a new capability it didn't have originally. (90% of the time, firmware upgrades fix bugs or incompatibilities with things ... They rarely add significant new features. Back in the early days of 56K modems, I remember lots of companies charging you some fee to exchange your k.flex modem for a true v.90 standards-compliant 56K model. I had to pay $25 or something like that to get an external Zoom modem upgraded.)


The problem isn't the $2, it's the fact that this sets a dangerous precedent for charging for future firmware updates.

We all love our Apple products, or else we wouldn't be here. That doesn't mean we have to love all Apple's decisions.

AidenShaw
Jan 25, 2007, 02:13 PM
All you cats who are dual-booting Windows and OSX on the MacIntels - how much did you pay for the firmware update that enabled support for operating systems that use BIOS instead of EFI?

Apple is behaving in a dubious manner here...

ITASOR
Jan 25, 2007, 02:17 PM
Is the N upgrader just a program? If it's a program that just runs on anything, you can bet it will be widely available on the internet to download, and Apple probably won't even care.

jettredmont
Jan 25, 2007, 02:20 PM
Actually, I did pay for it, whether it was listed in the specs or not. If someone sold you a rose but it was advertised just as a flower, does that mean that it's not a rose? And after you buy it, the guy you bought it from says "Oh, this is a rose, so you'll have to pay $1 more to call it a rose." Just because it's not advertised as 'n' doesn't mean it isn't one.


Very poor analogy.

1. You buy flowers after looking at them. It is obvious that the flower is a rose to the average person. You bought your computer based on a spec sheet and perhaps in-person testing. During that testing, of course, the wireless speeds were limited to those of b and g, not n. The average person would not know that there is 'n' hardware in the box.

2. Apple doesn't care what you call your airport. Call it 'n', call it 'w', call it 'guzhogi's super wifi airport MAX'. The fact is, you bought 'g' hardware, and the 'n' capabilities were undisclosed and unactivated. Apple doesn't get in trouble if you call it 'n'. Apple gets in trouble if they activate a significant portion of the hardware now, many months after they shipped it.

guzhogi
Jan 25, 2007, 02:22 PM
Very poor analogy.

1. You buy flowers after looking at them. It is obvious that the flower is a rose to the average person. You bought your computer based on a spec sheet and perhaps in-person testing. During that testing, of course, the wireless speeds were limited to those of b and g, not n. The average person would not know that there is 'n' hardware in the box.

2. Apple doesn't care what you call your airport. Call it 'n', call it 'w', call it 'guzhogi's super wifi airport MAX'. The fact is, you bought 'g' hardware, and the 'n' capabilities were undisclosed and unactivated. Apple doesn't get in trouble if you call it 'n'. Apple gets in trouble if they activate a significant portion of the hardware now, many months after they shipped it.

You're right, it was a poor analogy, but you got n whether you knew it or not.

benbondu
Jan 25, 2007, 02:28 PM
Actually, I did pay for it, whether it was listed in the specs or not. If someone sold you a rose but it was advertised just as a flower, does that mean that it's not a rose? Just because it's not advertised as 'n' doesn't mean it isn't one.

You did not pay for a 802.11n card that functions like a 802.11n card. Hense, you do not have a 802.11n card that functions like a 802.11n card. What you paid for was a 802.11n card that functions like a 802.11g card, and that's exactly what you have now. And it's exactly what you'll continue to have unless you pony up 2 bucks.

Would you have preferred the MacBooks to ship with a true 802.11g card and with the option to later upgrade it for $50 or more? (accounting for additional hardware and labor costs)

I honestly don't understand why people feel like they've been cheated on this.

Rocksaurus
Jan 25, 2007, 02:29 PM
All you cats who are dual-booting Windows and OSX on the MacIntels - how much did you pay for the firmware update that enabled support for operating systems that use BIOS instead of EFI?

Apple is behaving in a dubious manner here...

BAM. I want you to know that I love you, AidenShaw.

A brief review...

Apple purchased the N cards and included them in the Macs. Since they paid N card prices (as the hardware is N capable) they included the extra cost to them for an N card vs. a G card. Then, like any business, they passed this extra cost along to the consumer. You already paid for it.

The firmware update makes it so OS X can use the capabilities you already paid for.

The only cost here to Apple is to produce the firmware update. I'd say Bootcamp, which is free, cost them more than this N card firmware update. And don't make the argument that it's "beta" because that shouldn't exclude it from these accounting things, and quite frankly Bootcamp is a finished product. Yes, they will be charging Tiger users for it in the future, but if the "beta" status makes it exempt from this accounting fluff, then I would encourage Apple to label their "N" drivers as "beta" and just give them to us.

Dubious indeed.

jettredmont
Jan 25, 2007, 02:32 PM
All you cats who are dual-booting Windows and OSX on the MacIntels - how much did you pay for the firmware update that enabled support for operating systems that use BIOS instead of EFI?

Apple is behaving in a dubious manner here...

Aw, crap, Aiden. Yup, you figured Apple out.

Apple's goal here is to finally have more cash on hand than Microsoft by charging $2 for an unnecessary update, that only a small number of recently-shipped computers can use, of which a significantly smaller portion of those computers can take advantage (connecting to pre-n routers which are compatible with Apple's pre-n implementation), and which only a small portion of owners care to have in the first place.

Note, of course, that your argument about BIOS/EFI is dubious at best. Was there a hardware BIOS chip that Apple bought and shipped without telling us? I didn't think so.

ShnikeJSB
Jan 25, 2007, 02:42 PM
Geez, if you are too cheap to pay $1.99 -- less than a friggin' value meal, and DEFINITELY less than a couple bottles of Evian -- then just wait a couple days. By then it will be all over Bittorrent, P2P networks like Gnutella, among other places... It isn't a big deal... And if you are complaining that you can't afford $1.99, then you have other problems -- you shouldn't have an expensive relatively new computer in the first place.

Just my 2 Pfennigs

AidenShaw
Jan 25, 2007, 02:45 PM
Note, of course, that your argument about BIOS/EFI is dubious at best. Was there a hardware BIOS chip that Apple bought and shipped without telling us? I didn't think so.
Yes, the silicon logic and firmware controlling the CPU startup (be it OpenBoot, BIOS, EFI or whatever) was purchased and shipped by Apple.

That silicon had the capability of booting BIOS systems, but Apple disabled that feature in the firmware that it shipped.

Apple later restored the feature that it had disabled.
_________________________________

To me, that description fits both the BIOS boot and the pre-N feature.

jettredmont
Jan 25, 2007, 02:54 PM
A brief review...

Apple purchased the N cards and included them in the Macs. Since they paid N card prices (as the hardware is N capable) they included the extra cost to them for an N card vs. a G card. Then, like any business, they passed this extra cost along to the consumer. You already paid for it.

The firmware update makes it so OS X can use the capabilities you already paid for.


You are not a very good businessman if you charge for your product based on your cost and not what the market can bear. Apple did not charge us for 'n' hardware. They shipped more than what was purchased, with the extra functionality disabled.

Apple is in a competitive market where price matters (ie, they are not a monopoly). 'n' hardware is more expensive than 'g' hardware. If they were charging for 'n' hardware and delivering 'g' performance, two factors come into play:

1. their price for a 'g' computer is too high. Fewer people buy.
2. they lower the price of the hardware to be in line with 'g' competitors. People buy, but per-unit profit is less than had they simply shipped the advertised 'g' hardware.

Either way, from an accounting perspective, Apple has lost the difference in price between 'n' and 'g' hardware (obvious in the second extreme; take the first extreme, and compare the profit there with Apple shipping 'g' hardware instead and you see the same is true in the first extreme as well).

You did not pay for 'n' hardware. You paid for 'g' hardware. Apple didn't 'lose' money on the overall computer sale, but they made less money than they should have been making were they shipping the advertised hardware instead of the 'n' hardware.

Again, posit the scenario where Apple shipped 'g' hardware with all those boxes instead. You would still have exactly what was advertised, still would have paid exactly the same price, still would have just as much company amongst Mac buyers, etc. Your behavior wouldn't have changed, because nothing you knew about changed. However, now, you'd be in a much worse position, having to replace your Airport Extreme card for $50-90 to get 'n', at best, or not able to get 'n' speeds without buying an additional external dongle or a whole new computer, at worst.

The ONLY argument that can be made is that you bought Mac boxes expecting 'n' hardware to be present, based on evidence presented on web sites. Which is a straw-thin argument, as (1) such web sites don't speak for Apple, (2) specific components can and do change throughout a manufacturing run so the fact that some people could see 'n' hardware in their box didn't mean you would get the same, and (3) the existence of hardware in a box does not imply the utilization of hardware.

So, you either bought 'g' hardware the best you knew, and are getting one hell of a deal to upgrade to 'n', or you took a risk acting on hearsay and rumor and it didn't pay off for you.

valkraider
Jan 25, 2007, 03:09 PM
nevermind, like three people beat me to it. first half of post deleted.

The $1.99 is indeed cheep, but this is about the principal of having to pay anything at all.

You don't HAVE to pay anything at all. You are free to keep using your .g card.

Rocksaurus
Jan 25, 2007, 03:20 PM
You are not a very good businessman if you charge for your product based on your cost and not what the market can bear. Apple did not charge us for 'n' hardware. They shipped more than what was purchased, with the extra functionality disabled.

Apple is in a competitive market where price matters (ie, they are not a monopoly). 'n' hardware is more expensive than 'g' hardware. If they were charging for 'n' hardware and delivering 'g' performance, two factors come into play:

1. their price for a 'g' computer is too high. Fewer people buy.
2. they lower the price of the hardware to be in line with 'g' competitors. People buy, but per-unit profit is less than had they simply shipped the advertised 'g' hardware.

........



You're assuming that Apple prices its computers at marginal cost. It does not. In fact, Apple makes a tidy profit (See: $1 Billion dollars last quarter). N is only disabled on OS X. If I recall, people had N working on Windows in Bootcamp with proper (FREE) drivers.

When Apple went shopping for wireless networking cards for their Macs, they paid extra to get the N capable hardware. Then, since they sell all their Macs well above marginal cost, regardless of whether they told you, YOU PAID FOR IT.

Example 1: Since they're not selling at (or even very close to) marginal cost, technically, if you want to get all economical here, the price of their "g" computers IS too high. You could (at the time) get similarly specced N computers for less. According to your logic, no one bought these Macs.

Example 2 just didn't happen. Apple doesn't lower their prices to be in line with competitors. They don't really HAVE competitors. OS X would have to be installable on any PC for Apple to have the level of competition to make your example work.

In fact, you lead me to a good point. If Apple had the level of competition other PC manufacturers do, then we wouldn't be in this mess. It would have been advertised as N from the get-go.

Historically, firmware updates have added new functionality and have been FREE. See: previous Apple firmware updates (Bootcamp was mentioned earlier, you chose to ignore it), generic PC firmware updates, iPod firmware updates (which have added a LOT of functionality - my iPod gets better battery life than was advertised when I bought it - I guess I owe Apple $2!), internet router firmware updates... To name a few. We're not even talking about free software updates yet.

Dubious.

stephenmckeague
Jan 25, 2007, 03:49 PM
We are burning our bridges.
Apple will definitely think twice before adding a feature that can be enabled in the future.


LOL post this made me laugh. Better not complain guys or Jobs might spite us by not keeping up with the competition, thereby crippling Apple and costing the company millions. Idiots (like this one) who think apple are in business for the good of the consumer should be shot.


With all of this whining and negative press what motivation would there be to do it?

HOW ABOUT MONEY YOU IDIOT. The sole motivating factor for Apple Inc doing anything. Bloody hell.


Instead of receiving thanks & recognition, they are being clobbered.

Thank you kindly Apple incorporated for the giving me the opportunity to pay you for an upgrade.

guzhogi
Jan 25, 2007, 03:56 PM
Ok, I'm getting really tired of seeing half the posts here saying "it wasn't advertised as 'n' so we should pay more to use it as such" and the other hald being "it may not have been advertised, but it's n nonetheless so we shouldn't pay."

Can we all agree that it was not advertised as n?

Can we all agree that those people who bought C2D Macs got n, whether it was advertised or not? That the n didn't magically appear once it was announced, but was there the whole time?

I get how, okay, the cards were advertised as g, but have n capability that's disabled. Can we please all agree on this?

iEdd
Jan 25, 2007, 04:00 PM
How do you get 1000 idiotic mac nerds running?

Roll a $2 coin down the street :D

Somebody had to say it :o :p

Gasu E.
Jan 25, 2007, 04:10 PM
Then i think you're being a bit self-centered. Apple is not playing you for a fool


True, Apple is not playing him for a fool. But The Wall Street Journal is.

Canerican
Jan 25, 2007, 04:12 PM
Let's see if Apple meets the same end as Enron, Rite Aid, and Tyco.

Steve Jobs committed accounting fraud and should go to jail.

This is misleading the consumer by saying it is an accounting issue... let's see, I like Mac's product, but the law is the law.

As a lawyer I hope to see Stve Jobs meet the same end as Ken Lay (not death, just a certain life sentance to prison...)

Fraud is fraud regardless of how good a CEO you are, or how rich you are.

Benton
Jan 25, 2007, 04:17 PM
Q: Who are Apple's independent auditors?
A: KPMG LLP

Q: Why?
A: Because KPMG LLP SAYS SO!

Q: Why?
A: Because KPMG LLP will not certify reports submitted to SEC unless Apple does it their way!

Gasu E.
Jan 25, 2007, 04:17 PM
They could care less if a company "achieves a desired reslut".

I don't think that is an appropriate use of stockholder's money.

Llywelyn
Jan 25, 2007, 04:26 PM
My guess is Apple judged that the risks of restating earnings were less than the risk of being wrong. Given that, they decided that the costs and risks of charging in terms of damage to reputation were smaller than charging $2.

If they are wrong about the requirements and they do this charging, they lose perhaps, maybe, in some slight way, respect from an utterly small portion of the population. More people would probably notice an earnings restatement than would ever even think about getting this support at this point in time without getting an 802.11n base station.

Canerican:

Got proof of that fraud?

If you are referring to the "backdating scandal," then I'll simply refer you to what Holman W. Jenkins Jr of the WSJ said, which I picked up from Beaumont Vance's blog (http://www.prmia.org/Weblogs/General/Beaumont_Vance/2007/01/the_options_bac.html):


When Apple filed its latest mea culpa on Friday along with a board expression of confidence in Steve Jobs's leadership, the company's shares jumped four bucks. Message: The market doesn't give a hoot about backdating. It gives a hoot whether Mr. Jobs might be run out of his job. This ought to cast a light on whether the drop in market prices of companies in the backdating scandal reflects the shock and horror of investors at the details of backdating -- or shock and horror at the meal that trial lawyers, prosecutors and the media are making of companies caught up in this episode. …Backdating, let's recall, was simply an artifice to allow companies to issue 'in the money' options (the terms of which were accurately reported to shareholders) without taking an accounting expense. That's all backdating is. Does it matter in the teensiest whether options are expensed? No, expensing has no probative value whatsoever for evaluating a company's shares or its compensation policies. Expensing creates a junk number, of zero analytical value.


There may, under all of this, be some legal complications or ramifications. If there are, I certainly don't have any evidence of wrongdoing on the part of Steve Jobs at this point in time, and so accusing him of fraud for this is a little ridiculous, don't you think? Unless you are privy to some information that has not been made public yet?

Gasu E.
Jan 25, 2007, 04:28 PM
Let's see if Apple meets the same end as Enron, Rite Aid, and Tyco.

Steve Jobs committed accounting fraud and should go to jail.

This is misleading the consumer by saying it is an accounting issue... let's see, I like Mac's product, but the law is the law.

As a lawyer I hope to see Stve Jobs meet the same end as Ken Lay (not death, just a certain life sentance to prison...)

Fraud is fraud regardless of how good a CEO you are, or how rich you are.


As a "lawyer", does your "office" have rubber walls?

Watermonkey
Jan 25, 2007, 04:57 PM
Why are people saying that I paid for b/g when in fact I paid for b/g/n? Do you think that (the presumably more expensive) n didn't cost Apple any more to put in my computer? Think they were just giving me that functionality? They paid Intel for the chipset with this feature and passed any additional costs on to me after marking it up and taking a profit if they're like any other business. I'd be shocked if they didn't mark it up before selling it to me. Therefore, I've already paid for n which I knew from this website would be included in the notebook because I bought mine a few weeks after people were getting theirs and verifying the n functionality. Since I knowingly paid for the n-capable chip, knowing that the feature would be unlocked at some point in the future, never suspecting it would actually add to the cost of the computer, I'm just a little upset. I'm not going to write a letter to the editor or boycott Apple or anything like that, but that doesn't mean I'm just going to take it without feeling a little cheated and saying so in this thread.

A Question slightly off-topic: My wife has a Sony Vaio with a C2D chipset. Does that mean she's also got the n functionality built in just waiting for MS or Sony to charge her to use it? BTW: Yes, we've got a pre-n router so this is an upgrade I'd want to get when it becomes available.

Dont Hurt Me
Jan 25, 2007, 05:15 PM
Its the old story, Apple screws its customers and its customers say that felt good give me more. to charge $2.00 for a tiny software upgrade is silly. Il bet the engineer who wrote the program isnt getting any of it. I bet those Ceo's are going to get Millions. Its all about the CEo's isnt it because they never can have enough. GREED is GREED.

karlfranz
Jan 25, 2007, 05:30 PM
Get real? The only reality here my friend is that Apple lied and sold us a computer with different specs than were shown. You don't sell a car and tell people it has 300hp only to tell the person as they're signing for it that it actually has 340hp, but the extra 40hp is gonna cost ya...

And now that this is in the open there is no reason at all for Apple to charge for "n" on any new Macs. We all know it has "n", so they need to stop lying and saying it doesn't.

Your ignorance regarding your example is overwhelming. Case in point: Every year from 1996 to 2004, Lotus made available to owners of the Esprit V8 a "Hi-Torque" upgrade for $600. If you opted to buy this option, you could, at any time, take your car to the dealer, pay the upgrade fee, and they would download a software patch to the program in the car's ECU to give you more torque at lower RPM. No changes to any of the "hardware" of the car was done.

Another example: How many software packages out there have you seen (including Windows Vista, Quicken, and countless others) that include all software versions on the same retail disc? Say you only want the limited "Home Edition", you pay for that and install it on your computer. Later you decide to upgrade to the "Premium Edition" so you pay them again to get an "unlock code" that will enable the premium features. The features were in your computer all along, but until you pay for them, you don't have access to them. Why is this any different to you folks?

Apple is doing this to protect themselves from all the idiots who are going to get Joe Lawyer to file a class action suit on the grounds that Apple purposely crippled the capabilities of their computers.

Canerican
Jan 25, 2007, 05:59 PM
As a "lawyer", does your "office" have rubber walls?

That doesn't sound like a rebuttal, more like an ad homonem attack...

The fact is even though this may not be illegal, Apple has alot to answer for. Yet somehow they do not play by the same rules as other corporations play by.

Somehow I have a feeling that you have very little to say about this, heck, you probably needed to press ctrl + :apple: + d to find out what a rebuttal is.

Can you honestly say that Apple (nay, Steve Jobs) should not play by the same rules as other companies? Can you support a proven corporate criminal? If it wasn't someone as "big" as Steve Jobs who was backdating stock options, he would be fired, and then likely prosecuted...

Obviously you and I have vastly different views on what honesty and morals are. Much more you seem to take a very liberal (i.e. absent) approach to the law.

hagjohn
Jan 25, 2007, 06:22 PM
Wah, wah.... We paid for G, but were lucky enough to get an 'n' card. It is 2 freaking bucks... I don't see the big deal... I say kuddos to Apple for sending them out with 'n' cards in the first place.

It's 2 bucks today.. but what about tomorrow? What about next company that does the same thing?

Not to mention the fact that you already purchased the laptop (at top dollar, I may add) and now are asked to pony up even more money. I'll bet anything that a lawsuit will happen on this one.

hagjohn
Jan 25, 2007, 06:28 PM
LOL post this made me laugh. Better not complain guys or Jobs might spite us by not keeping up with the competition, thereby crippling Apple and costing the company millions. Idiots (like this one) who think apple are in business for the good of the consumer should be shot.

HOW ABOUT MONEY YOU IDIOT. The sole motivating factor for Apple Inc doing anything. Bloody hell.

Thank you kindly Apple incorporated for the giving me the opportunity to pay you for an upgrade.


Apple didn't make a dime off their sale to you, did they! Wether or not you like it, its a huge PR blunder, If you ask me.

Canerican
Jan 25, 2007, 06:48 PM
Any of you remember Janet Reno going after Microsoft under anti-trust etc. laws?

Apple has a corner on their market, perhaps too much. The goal of anti-monoploy laws is to stop this exact thing from happening.

jettredmont
Jan 25, 2007, 06:51 PM
You're assuming that Apple prices its computers at marginal cost. It does not. In fact, Apple makes a tidy profit (See: $1 Billion dollars last quarter). N is only disabled on OS X. If I recall, people had N working on Windows in Bootcamp with proper (FREE) drivers.

When Apple went shopping for wireless networking cards for their Macs, they paid extra to get the N capable hardware. Then, since they sell all their Macs well above marginal cost, regardless of whether they told you, YOU PAID FOR IT.


Right there's where your logic is failing you.

You bought a machine that said it was b/g compatible, not n. That machine was whatever price it was. De facto, then, the sold price was fair for a computer with b/g capabilities.

Were it advertised with 'n' capability you would have paid $X extra. That's $X more Apple could have charged, but did not. Ergo, like it or not, Apple is "out" $X.

Alternatively, if Apple had provided "b/g" hardware instead of 'n' hardware, it could have saved $Y. Ergo, like it or not, Apple is "out" $Y.

No matter which way you look at it, unless $Y is negative, there is a cost that Apple ate.


Example 1: Since they're not selling at (or even very close to) marginal cost, technically, if you want to get all economical here, the price of their "g" computers IS too high. You could (at the time) get similarly specced N computers for less. According to your logic, no one bought these Macs.


Completely incorrect (last sentence, not the rest). Reread what I posted. Because the b/g price is higher than some comparable 'n' device, Apple sold fewer Macs. For those that bought b/g Macs, they saw the value of the b/g equipped Mac as greater than the value of the hypothetical 'n' equipped PC. There's obviously more to the buying decision than the particular wireless connection, else an eMachine with an 'n' PCI card would own 100% of the PC market.

Listen: you can, with a lot of work, draw a nice, pretty curve of price versus demand. This is high school economics territory, and one of the few basic principles taught there that really holds up under heavy scrutiny. If X people will buy a b/g Mac for $Y, then X+n people would buy a b/g/n Mac for the same price (assuming additional features increase value, which is a safe assumption here). If X people will buy a b/g Mac for $Y, then X+n people will buy a b/g Mac for $Y-m.


Example 2 just didn't happen. Apple doesn't lower their prices to be in line with competitors. They don't really HAVE competitors. OS X would have to be installable on any PC for Apple to have the level of competition to make your example work.


Apple holds a micro-monopoly, aka lock-in. I think we can all agree about that.

At a larger level, however, they are not in a monopoly or even industry control position. Even within the micro-monopoly, people will buy fewer of a product that they don't necessarily need when the value is less. While some people may truly need a new Mac right now, the vast majority will wait for a few more months or years before buying if the value is not seen as significant. Again, the fact that Macs were advertised as supporting only b/g and other makers were selling 'n' hardware, meant that Apple sold fewer computers, either as a result of a buying delay or as the result of a wholesale switch. If I buy a new computer on average once every three years, and this time I wait for three and a half years to buy a computer, Apple has lost 1/6th of a computer sale from me. That may not seem like much, but it's significantly more than the cost of 'n' hardware.

Again, I'm not sure why we're arguing about basic high school economics here. Modifying the value of a computer will affect either its sales (if you leave price constant) or its price (if you aim to keep sales constant). Unless you are a monopoly on a utility-style required service, that is pretty much always true (and even in utility monopolies there is some price/demand response).


In fact, you lead me to a good point. If Apple had the level of competition other PC manufacturers do, then we wouldn't be in this mess. It would have been advertised as N from the get-go.


As I've shown several times, Apple had major financial incentives to advertise their pre-n hardware. The reasons they did not are another topic, but IMHO center around a focused market message and the risk of shipping networking hardware that for a long time looked like it might be made obsolete when the final standard came out.


Historically, firmware updates have added new functionality and have been FREE. See: previous Apple firmware updates (Bootcamp was mentioned earlier, you chose to ignore it), generic PC firmware updates, iPod firmware updates (which have added a LOT of functionality - my iPod gets better battery life than was advertised when I bought it - I guess I owe Apple $2!), internet router firmware updates... To name a few.


Which was my original point. Firmware updates being sent out for free are all well and good, but there are two differences here:

1. This is activating hardware that offers significant functionality and was not used before, and cost Apple to provide versus the alternatives.

2. The regulatory climate (SOx as well as Apple's current life under a microscope) has changed over the lst year and especially over the past month. I think that's well-accepted, although no one much likes it.

The first point is the one people seem to be missing altogether. This is NOT (as I did address, although apparently not thoroughly enough) like supporting BIOS calls via firmware. There was no BIOS chip shipped that Apple chose to enable via firmware; they amended the firmware code to include BIOS emulation on the current, well-used, advertised, and sold, hardware. Similarly Dell BIOS upgrades are software-only. Similarly the iPod update is software-only.

This is a hardware update. The fact that the hardware is already sitting in your machine unconnected is irrelevant (meaning, it could be seen as such in a court of law ... like I said, this is gray area). It is a hardware upgrade which Apple paid for in a previous quarter, which Apple never recognized as sold, which Apple is now providing to you. If they "sell" you this hardware upgrade now, all is on the up-and-up. If they say that the hardware shipped previously, then they have to restate their earnings for previous quarters and deal with shareholder lawsuits. That's how Apple sees it.


We're not even talking about free software updates yet.


If you understand what I said about firmware versus dormant hardware above, then perhaps you'll also understand why "talking about free software updates" would be a very short conversation. If hardware versus firmware is oranges versus tangerines, this would be oranges versus papayas. There's no comparison to be made.

stephenmckeague
Jan 25, 2007, 06:53 PM
Imo IF apple's sole motivating factor in charging this fee was to ensure they were following all applicable laws then why oh why did they not charge 1 cent. I know this may be seen to some as being pedantic but it would sure as hell dispell all the MANY MANY claims on this board that there is more to this issue than apple would have you believe. These people are some of apple's most loyal customers and even they're finding this crap hard to swallow.

And finally a preemptive strike on whoever thinks people would be less inclined to download the update if it only cost 1 cent rather than 2 dollars:
You are an idiot

jettredmont
Jan 25, 2007, 06:59 PM
It's 2 bucks today.. but what about tomorrow? What about next company that does the same thing?


Even if it was $200, I don't see anything wrong with it. Apple sold b/g notebooks. They're still b/g notebooks. If you want 'n' hardware there are many ways to do this (external dongles, buy a new machine, etc).

What about the next company that sells me a product with X features and wants to charge ACTUAL MONEY for feature X+1? <shrug>


Not to mention the fact that you already purchased the laptop (at top dollar, I may add) and now are asked to pony up even more money. I'll bet anything that a lawsuit will happen on this one.

I hereby predict that either:
1. No lawyer will take up the case (a longshot; you can find a lawyer to take any case if you work on it).
2. The case will be laughed out of court. Not thrown out. Laughed out. The arguments given here are simply that preposterous, and I don't see any that you folks are missing.

jettredmont
Jan 25, 2007, 07:14 PM
The fact is even though this may not be illegal, Apple has alot to answer for. Yet somehow they do not play by the same rules as other corporations play by.


...


Can you honestly say that Apple (nay, Steve Jobs) should not play by the same rules as other companies? Can you support a proven corporate criminal [emphasis mine - Jet]? If it wasn't someone as "big" as Steve Jobs who was backdating stock options, he would be fired, and then likely prosecuted...

Obviously you and I have vastly different views on what honesty and morals are. Much more you seem to take a very liberal (i.e. absent) approach to the law.

As a lawyer, I'm sure you understand that there are actual definitions behind words like "proven corporate criminal". As even a layperson might suspect, they imply that the person so cited is, in fact, a "corporate criminal" (not sure on the definition of that one, sorry) and that such has been "proven", preferably by some authoritative body or in a court of law.

We're in the "possibly" stage right now. Until/unless the SEC concludes its investigation and refers Mr Jobs to criminal authorities, or criminal authorities step in of their own accord (I don't believe the SEC jurisdiction is absolute here) and prosecute him, we aren't even in the "alleged" stage. If that happens, and the trial concludes with a strong verdict, then we are dealing with a "proven criminal".

Not before.

Now, that having been said: sometimes the hint of allegation is enough to cause one's moral compass to point elsewhere. If you are one of those, and you own Apple stock, feel free to vote for Steve's ouster at the next stockholders' meeting. If matters continue along the course you are presupposing, then I suspect you will be joined by many others and, yes, he will be ousted for that wrongdoing.

IMHO, my moral compass apparently isn't as sensitive as yours. I'd like to see at least what the SEC comes up with prior to demanding my pound of flesh from Mr. Jobs.

As an aside, you, being a lawyer, might also be aware of the consequences of libel, such as asserting that someone has been proven to have committed something when no such thing has been proven. The law's a bit lax here on these intertubes, but I'd expect better from a lawyer.

kentrox99
Jan 25, 2007, 07:14 PM
I don't think that is an appropriate use of stockholder's money.

WHAT???
Please tell me when a company is audited just because the stockholders think it is appropriate.
When my auditors roll in this year, I'll make sure to tell them we need to achieve our desired results or esle we don't want to do it.

Good Call buddy. It will save us millions.

jettredmont
Jan 25, 2007, 07:23 PM
Imo IF apple's sole motivating factor in charging this fee was to ensure they were following all applicable laws then why oh why did they not charge 1 cent. I know this may be seen to some as being pedantic but it would sure as hell dispell all the MANY MANY claims on this board that there is more to this issue than apple would have you believe. These people are some of apple's most loyal customers and even they're finding this crap hard to swallow.

And finally a preemptive strike on whoever thinks people would be less inclined to download the update if it only cost 1 cent rather than 2 dollars:
You are an idiot

1. "Fair value" claims could come up if Apple "dumped" 'n' hardware for a penny. First possibility that comes to mind.
2. Credit card transactions below around $0.50 are negative. Charging a penny would cost significantly more to administer than they gained, just by the credit card transaction costs.
3. Shipping AND Handling! There are real administrative costs to consider here.
4. Say the 'n' hardware cost (on average) $1 more than the b/g hardware, and the administrative costs of the program are projected at about $0.50 per unit shipped, and the credit card costs are projected at about $0.50 per unit shipped. Selling this for less than $2 could get them into the same trouble down the road as item 1 above.
5. And, dude, no one would buy something for a penny. Pennys suck. I never buy anything unless it's at least 99 cents!

(post mostly in jest, for the humor-challenged. I'm a bit dumbfounded as to why Apple chose to sell this for more than 99 cents. A penny really would be an administrative nightmare, but 99 cents is something they could easily manage ...)

gwangung
Jan 25, 2007, 07:37 PM
Any of you remember Janet Reno going after Microsoft under anti-trust etc. laws?

Apple has a corner on their market, perhaps too much. The goal of anti-monoploy laws is to stop this exact thing from happening.

No, it isn't.

Your grasp of anti-trust law is appalling.

It may be safe to say that your grasp of accounting is similarly appalling.

Similarly for the blather about "micro-monopolies." I'd like to see the case law where THAT'S been found to be illegal.

Canerican
Jan 25, 2007, 07:38 PM
Maybe Apple should charge $1.99 for security updates and $5.99 for firmware updates (isn't a firmware update quite a bit more significant than a wireless card driver?).

Blame it on various departments...

I have only given Apple about $2600 in the past year, I would to have them take a little more. I'm a rich man, I can afford it.

Grakkle
Jan 25, 2007, 07:48 PM
Maybe Apple should charge $1.99 for security updates and $5.99 for firmware updates (isn't a firmware update quite a bit more significant than a wireless card driver?).

Blame it on various departments...

I have only given Apple about $2600 in the past year, I would to have them take a little more. I'm a rich man, I can afford it.

That's true, you know. They're basically charging for this particular firmware update - let alone every other firmware update they post is available for free.

It's ridiculous. Yes, the cost is nominal, but it shouldn't have to be something you pay for anymore than a software update should.

And I agree: if Apple wants to make any sense or logic about it, they'll just have to start charging for every firmware and software update they post.

Rocksaurus
Jan 25, 2007, 08:07 PM
Right there's where your logic is failing you.

You bought a machine that said it was b/g compatible, not n. That machine was whatever price it was. De facto, then, the sold price was fair for a computer with b/g capabilities.

Were it advertised with 'n' capability you would have paid $X extra. That's $X more Apple could have charged, but did not. Ergo, like it or not, Apple is "out" $X.

Alternatively, if Apple had provided "b/g" hardware instead of 'n' hardware, it could have saved $Y. Ergo, like it or not, Apple is "out" $Y.

No matter which way you look at it, unless $Y is negative, there is a cost that Apple ate.



Completely incorrect (last sentence, not the rest). Reread what I posted. Because the b/g price is higher than some comparable 'n' device, Apple sold fewer Macs. For those that bought b/g Macs, they saw the value of the b/g equipped Mac as greater than the value of the hypothetical 'n' equipped PC. There's obviously more to the buying decision than the particular wireless connection, else an eMachine with an 'n' PCI card would own 100% of the PC market.

Listen: you can, with a lot of work, draw a nice, pretty curve of price versus demand. This is high school economics territory, and one of the few basic principles taught there that really holds up under heavy scrutiny. If X people will buy a b/g Mac for $Y, then X+n people would buy a b/g/n Mac for the same price (assuming additional features increase value, which is a safe assumption here). If X people will buy a b/g Mac for $Y, then X+n people will buy a b/g Mac for $Y-m.



Apple holds a micro-monopoly, aka lock-in. I think we can all agree about that.

At a larger level, however, they are not in a monopoly or even industry control position. Even within the micro-monopoly, people will buy fewer of a product that they don't necessarily need when the value is less. While some people may truly need a new Mac right now, the vast majority will wait for a few more months or years before buying if the value is not seen as significant. Again, the fact that Macs were advertised as supporting only b/g and other makers were selling 'n' hardware, meant that Apple sold fewer computers, either as a result of a buying delay or as the result of a wholesale switch. If I buy a new computer on average once every three years, and this time I wait for three and a half years to buy a computer, Apple has lost 1/6th of a computer sale from me. That may not seem like much, but it's significantly more than the cost of 'n' hardware.

Again, I'm not sure why we're arguing about basic high school economics here. Modifying the value of a computer will affect either its sales (if you leave price constant) or its price (if you aim to keep sales constant). Unless you are a monopoly on a utility-style required service, that is pretty much always true (and even in utility monopolies there is some price/demand response).



As I've shown several times, Apple had major financial incentives to advertise their pre-n hardware. The reasons they did not are another topic, but IMHO center around a focused market message and the risk of shipping networking hardware that for a long time looked like it might be made obsolete when the final standard came out.


Okay, this post makes what you were trying to say a lot clearer. If you had been this clear/I had better understood what you meant in your original post I'd have had not even mentioned economics.


Which was my original point. Firmware updates being sent out for free are all well and good, but there are two differences here:

1. This is activating hardware that offers significant functionality and was not used before, and cost Apple to provide versus the alternatives.

2. The regulatory climate (SOx as well as Apple's current life under a microscope) has changed over the lst year and especially over the past month. I think that's well-accepted, although no one much likes it.

The first point is the one people seem to be missing altogether. This is NOT (as I did address, although apparently not thoroughly enough) like supporting BIOS calls via firmware. There was no BIOS chip shipped that Apple chose to enable via firmware; they amended the firmware code to include BIOS emulation on the current, well-used, advertised, and sold, hardware. Similarly Dell BIOS upgrades are software-only. Similarly the iPod update is software-only.

This is a hardware update. The fact that the hardware is already sitting in your machine unconnected is irrelevant (meaning, it could be seen as such in a court of law ... like I said, this is gray area). It is a hardware upgrade which Apple paid for in a previous quarter, which Apple never recognized as sold, which Apple is now providing to you. If they "sell" you this hardware upgrade now, all is on the up-and-up. If they say that the hardware shipped previously, then they have to restate their earnings for previous quarters and deal with shareholder lawsuits. That's how Apple sees it.


If you understand what I said about firmware versus dormant hardware above, then perhaps you'll also understand why "talking about free software updates" would be a very short conversation. If hardware versus firmware is oranges versus tangerines, this would be oranges versus papayas. There's no comparison to be made.


It operates at n speeds when you use Vista in Bootcamp. This is not unconnected hardware. Basically, this is an OS X update, regardless of how they label it. As of now OS X doesn't take full advantage of it, after the update, it will. Software.

I understand what you mean that they sold something they didn't advertise, but let's go back to my iPod firmware/software update example. Many iPod firmware updates I installed in the past on my 3rd gen made the battery life better. Apple sold me a battery that was advertised to to be capable of x hours of life. Now, they're effectively GIVING me a battery that is capable of x+n hours of life. Same goes for this - Apple advertised that this card would be capable of g range and g speeds with their software. Now, with an update, the card is capable of n speeds and n range, which is just g+x extra Mbps and g+x extra feet of operating range. This update extends the funcionality of what they advertised. Much like the functionality of my battery was extended.

Also, the whole point of this article is that accountants are examining what Apple's doing and saying they don't need to be doing it. I know Apple's under extra scrutiny right now, but c'mon. If the accountants think it's stupid and the customers think it's stupid, it's stupid. If the SEC went after them for releasing this update for free, the SEC would set a precedent that could screw over pretty much any other company that's ever released a free update.

usarioclave
Jan 25, 2007, 08:17 PM
Technically GAAP doesn't require charging anything. However, while the quoted accountants are technically correct, they are missing the point.

If Apple does not charge for the upgrade, will Apple have to restate the revenue that was already recognized? How would that work for laptops that have not yet upgraded?

Will there be substantial costs incurred if the first question and second questions are answered in the affirmative? Wil those costs be higher than just charging for the upgrade?

Those are the questions that the WSJ writers failed to ask, or failed to print. Asking the accountants those questions would give a totally different answer, because it's a totally different question. Does GAAP mandate a charge? No. If there is no charge, what are the accounting consequences of that? [no answer].

jettredmont
Jan 25, 2007, 08:23 PM
Similarly for the blather about "micro-monopolies." I'd like to see the case law where THAT'S been found to be illegal.

I think I'm the only one who used that term here, and I don't think I ever implied it was illegal.

Not that monopolies are illegal either, but micro-monopolies don't carry the legal ramifications (about using one's weight to enter other markets, for instance) that true monopolies do.

Canerican
Jan 25, 2007, 08:30 PM
Similarly for the blather about "micro-monopolies." I'd like to see the case law where THAT'S been found to be illegal.



Baby Bell... Local utility companies... not illegal per se... but they need to be broken up...

jettredmont
Jan 25, 2007, 08:34 PM
It operates at n speeds when you use Vista in Bootcamp. This is not unconnected hardware. Basically, this is an OS X update, regardless of how they label it. As of now OS X doesn't take full advantage of it, after the update, it will. Software.


I didn't know it worked as 'n' hardware under Boot Camp. Seems like that does complicate matters (only slightly less so because Boot Camp and the use of Windows are not officially released features). My understanding was that Windows just reported the model as supporting pre-n, not actually taking advantage of it. Did you need to install a third-party driver under Windows?


Also, the whole point of this article is that accountants are examining what Apple's doing and saying they don't need to be doing it. I know Apple's under extra scrutiny right now, but c'mon. If the accountants think it's stupid and the customers think it's stupid, it's stupid. If the SEC went after them for releasing this update for free, the SEC would set a precedent that could screw over pretty much any other company that's ever released a free update.

Are these accountants willing to take responsibility for the mess if they're wrong? And were they asked the right question (ie, can Apple not charge AND not restate earnings)? This is (obviously) not a very common situation, which is why there is so much discussion around it. I think the SEC could easily come down on Apple for this without affecting a single other company.

EagerDragon
Jan 25, 2007, 08:43 PM
Is $1.99 for 5 times the speed and 2 times the distance, ummmm what is my ROI?
I don't care, I get a lot more out of the deal and besides you can always get a copy from a friend or download from someone it if you are that broke.

Maybe they are charging you the difference in price between the two chips (g vs. n).

Kingsly
Jan 25, 2007, 08:44 PM
Note, its not the fact that Apple is charging that the accountants are blasting, but Apple's stated reasoning.

Us in the mac community seem to have two different beefs...

a) we don't like the fact that they are doing it at all
b) we don't like the reason they gave for it

(or none of the above)

c) Who the heck cares. It's $2. GET OVER IT ALREADY.

Rocksaurus
Jan 25, 2007, 09:28 PM
Did you need to install a third-party driver under Windows?



Yes, third party (software) drivers are needed for Windows (Link for MBP Wireless N Windows drivers (http://drivers.softpedia.com/get/NETWORK-CARD/OTHER-NETWORK-CARDS/ATHEROS-ZIDAS-AR5008-Driver-60275.shtml)). No firmware flashing needed.

Are these accountants willing to take responsibility for the mess if they're wrong? And were they asked the right question (ie, can Apple not charge AND not restate earnings)? This is (obviously) not a very common situation, which is why there is so much discussion around it. I think the SEC could easily come down on Apple for this without affecting a single other company.

I guess the SEC can do whatever it wants. People everywhere have been able to read about this topic for days now, so I guess I just assumed the accountants were in the know, maybe they are maybe they aren't. Obviously it's not their responsibility if they're wrong, however the article labels them as "prominent" accountants... Whatever that means... They probably know more about the nitty gritty than we do, and if they're wrong it does hurt their reputation/credibility.

I guess given what I just said above, I can't say that I *know* that Apple can give these away and not somehow get in some sort of trouble, though none of us truly *know*. What I think though, is that many previous OS X updates have quietly included drivers/driver fixes, and given that I'm used to free drivers/updates, in my opinion, this is unncessary. It's my opinion that Apple should stick to its retail motto and "Surprise and Delight" current owners of N chips with a free speed boost.

It is also my opinion that these forums would be singing a much different tune if Dell/HP/Whatever were charging for this. And that annoys me.

tyroja00
Jan 25, 2007, 09:39 PM
Q: Who are Apple's independent auditors?
A: KPMG LLP

Q: Why?
A: Because KPMG LLP SAYS SO!

Q: Why?
A: Because KPMG LLP will not certify reports submitted to SEC unless Apple does it their way!

Sorry that is not totally accurate in real world situations. There is a give and take. Remember the auditor is getting paid well and doesn't want to lose the client. Look at it as insurance. The auditor will never certify anything that they feel will get them sued.

Which brings me back to the point of all the Apple supporters screaming that it is not a lot of people that are affected and that we are talking about a small amount. They may be right. But, then that means it is not material on an accounting standpoint. So why the fuss?

Because it is material in theory. Enough so, to restate. They are trying to use loopholes. I wonder what everyone thinks about Apple trying to use loopholes to avoid having to restate? Would you feel different if Microsoft did it?

ClimbingTheLog
Jan 26, 2007, 01:03 AM
No, you didn't. If you can show me your receipt dated BEFORE 2007 with 802.11n listed in the specs - I will send you my unneeded update disk.

I don't think my receipt says 802.11-anything on it, just Airport. Anyway, the machines with the pre-n cards came with a manual that talks all about the pre-n capabilities.

Type 'man apple80211' if you're interested.

The fact of the matter is draft-n capability was delayed until January to coincide with the AppleTV product - that's for Apple's marketing convenience only, so if they need to ascribe $2 rebates to marketing costs, fine, do it.

ClimbingTheLog
Jan 26, 2007, 01:08 AM
Apple will definitely think twice before adding a feature that can be enabled in the future. With all of this whining and negative press what motivation would there be to do it?

Because free updates and upgrades have always been and continue to be a great selling point of Macs.

Instead of receiving thanks & recognition, they are being clobbered.

Because they appear dishonest in this manner, and the folks at the Wall Street Journal seem to concur. I'm prejudiced to agree with them, granted, but honestly they have more credibility than those who have been posting here anonymously and claiming to be CPA's, and one hopes the WSJ found unbiased sources (they're usually pretty fair). They might be wrong, sure, but they're the best available source of information to date on this issue.

ClimbingTheLog
Jan 26, 2007, 01:20 AM
You don't HAVE to pay anything at all. You are free to keep using your .g card.

It's an n card. If it weren't it wouldn't operate at n speeds under Windows. Currently OSX can only drive it at g speeds. Apple intends to charge $2 to enable it under OSX.

ClimbingTheLog
Jan 26, 2007, 01:22 AM
It's 2 bucks today.. but what about tomorrow?

Remember, we're just talking about a draft-n upgrade here. When the final n spec is available they'll need to charge again. And then again for each and every extension to n they chose to implement.

I think they're painting themselves into a corner here.

C00rDiNaT0r
Jan 26, 2007, 03:08 AM
http://www.apple.com/support/downloads/airportextremeupdate2007001.html

About AirPort Extreme Update 2007-001
This update is recommended for all Intel-based Macintosh computers and provides compatibility with AirPort Extreme base stations and networks.

Is this the same update that we were complaining about, that was supposed to cost $2? Somehow it just pop-ed up in my MBP's Software Update 3 minutes ago, and I didn't pay anything for it. Would be funny if this is indeed the very same update that everyone's talking about right now.

matticus008
Jan 26, 2007, 06:44 AM
This news item title is more than a little disingenuous. Nowhere in the article does anyone blast Apple's reasoning. What's been attacked is their blasé and simplistic explanation, which provides a source and a destination, but not a path. No credible professional in any field would dismiss a conclusion based on a two-sentence leap of logic.

If I said, "without Reagan, the price of coffee would have gone up," I wouldn't make much sense, either. What's missing from that equation is that Reagan ramped up the "war on drugs" and cut back the more profitable coca crop, leaving more space for coffee fields, and more volume reduces price. Of course, this too is overly simplistic.

As I've said before, if federal regulators release them from consequence, the charge will be dropped. The very announcement of this story could be an end run around the problem. Consider this: by announcing a seemingly nonsensical policy, it becomes clear in the industry and public that if it were true, it would make something of a laughing stock of a significant piece of legislation. Therefore, the announcement and the public response would make it unfavorable to enforce and prosecute, despite being a valid course. Apple would then be in a better position to seek assurances that a free release would not cause legal problems. Believe it or not, the press is used as a weapon in law and politics to pull off clever fake-outs all the time.

If the governmental, industry, and public response didn't give Apple cover to put this out for free, they could go through with their announced plan. So even if the plan didn't work, the plan inside the plan would.

Gasu E.
Jan 26, 2007, 08:01 AM
Also, the whole point of this article is that accountants are examining what Apple's doing and saying they don't need to be doing it. I know Apple's under extra scrutiny right now, but c'mon. If the accountants think it's stupid and the customers think it's stupid, it's stupid. If the SEC went after them for releasing this update for free, the SEC would set a precedent that could screw over pretty much any other company that's ever released a free update.

I would have to disagree with you there. The article did not quote accountants "examining what Apple's doing and saying" but merely sought a quick reaction from some accountants to a few words culled from a press release in order to generate a sensational article. There's no indication any of the accountants cited spent more than 20 seconds considering what Apple is trying to do. Additionally, the SEC is not the only fear, or even the biggest fear; stockholder suits are much more likely than an SEC action. Who really wants to face a class-action suit these days?

Please don't tell me you think a stockholder suit against Apple is an unlikely event! ;)

Gasu E.
Jan 26, 2007, 08:02 AM
This news item title is more than a little disingenuous. Nowhere in the article does anyone blast Apple's reasoning. What's been attacked is their blasé and simplistic explanation, which provides a source and a destination, but not a path. No credible professional in any field would dismiss a conclusion based on a two-sentence leap of logic.

If I said, "without Reagan, the price of coffee would have gone up," I wouldn't make much sense, either. What's missing from that equation is that Reagan ramped up the "war on drugs" and cut back the more profitable coca crop, leaving more space for coffee fields, and more volume reduces price. Of course, this too is overly simplistic.

As I've said before, if federal regulators release them from consequence, the charge will be dropped. The very announcement of this story could be an end run around the problem. Consider this: by announcing a seemingly nonsensical policy, it becomes clear in the industry and public that if it were true, it would make something of a laughing stock of a significant piece of legislation. Therefore, the announcement and the public response would make it unfavorable to enforce and prosecute, despite being a valid course. Apple would then be in a better position to seek assurances that a free release would not cause legal problems. Believe it or not, the press is used as a weapon in law and politics to pull off clever fake-outs all the time.

If the governmental, industry, and public response didn't give Apple cover to put this out for free, they could go through with their announced plan. So even if the plan didn't work, the plan inside the plan would.

Good comment.

Gasu E.
Jan 26, 2007, 08:07 AM
It is also my opinion that these forums would be singing a much different tune if Dell/HP/Whatever were charging for this. And that annoys me.

I doubt it. I've never heard "these forums" accuse Dell of overcharging.
Dell ships crap; Apple overcharges.

mkrishnan
Jan 26, 2007, 08:47 AM
I doubt it. I've never heard "these forums" accuse Dell of overcharging.
Dell ships crap; Apple overcharges.

Besides, even on this poll in this thread, only 40% of people right now have cast their vote in the direction of having a problem with this.

Oh, and I've seen the bitching on a dissatisfied Dell forum (Aximsite... relating to upgrading devices to Windows Mobile 5 as well as issues with the first crop of WM5 devices). Oh, I've seen it.

WildPalms
Jan 26, 2007, 08:55 AM
You need to shop elsewhere besides Starbucks. ;)

Why? Whats your problem with Starbucks? Whats your problem with his decision to buy coffee from Starbucks?

WildPalms
Jan 26, 2007, 08:57 AM
It doesn't require you to change how you charge, but if you don't establish a price for the feature, the SOX requirements could cause the entire release revenue to be deferred until the features are fully activated or "fair value" is established for the feature.

By Charging $1.99, they're establishing fair value.

so both sides are accurate...the accounting guys are way too defensive on this.

jb

This is the most accurate and balanced comment made so far.

WildPalms
Jan 26, 2007, 08:58 AM
Everyone is missing the whole point. (although several people posted almost the same thing since I hit "reply" and finished typing my comment. So not EVERYONE is missing the point. (smile))

Apple does not HAVE to charge. They simply ARE charging to avoid a POTENTIAL issue with earning statements, which could be prudednt considering the scrutiny that Apple is under right now. Would people rather Apple have to submit to costly investigations and/or possibly pay fines?

Also, people are overstating who will need this.

1. You must have a Core 2 Duo MacBook or MacBook Pro sold before February 2007.
2. You must have a NON-APPLE 802.11n base station (or potential to have one in the future).

If you don't fall into BOTH of those - you don't need the update. That is a pretty small number of people who will be affected. MOST of the people who bought Core 2 Duo mac laptops will not even know about 802.11n - or care. For a LONG time we are going to be using b/g simply because of the prevalance of public acccess points..

If you buy the Apple base-station it COMES WITH THE UPDATE. So it really is almost a complete non-issue.

And I am getting an Apple base-station but I do not have any of the 802.11n ready cards, so if anyone wants to buy my update disk I will sell it for 99 cents US. HALF PRICE!!!!

:)

....and yet people still seem to miss the point. Maybe Darwin was wrong? :p

hagjohn
Jan 26, 2007, 09:07 AM
http://www.apple.com/support/downloads/airportextremeupdate2007001.html



Is this the same update that we were complaining about, that was supposed to cost $2? Somehow it just pop-ed up in my MBP's Software Update 3 minutes ago, and I didn't pay anything for it. Would be funny if this is indeed the very same update that everyone's talking about right now.

According to news.com (http://news.com.com/Apple+closes+Wi-Fi+hole/2100-1002_3-6153631.html?tag=nefd.top), it plugs a Wi-Fi hole.

dejo
Jan 26, 2007, 09:08 AM
Why? Whats your problem with Starbucks? Whats your problem with his decision to buy coffee from Starbucks?
"Settle down, Kanye, settle down". - Carlos Mencia

I was just poking fun at the reputation Starbucks has for overpriced coffee. :)

Sherlock Holmes
Jan 26, 2007, 02:52 PM
Clearly, accounting regluations have nothing to do with this. Also, $2 is an insignificant source of revenue for Apple. There's only one reason for Apple to do this: metrics.

Apple wants to know how many of its customers are actually USING 802.11n. What cities they live in, age demographics etc.

As pointed out, $2 is a FANTASTIC deal for someone to upgrade service. For an early adopter, $2 is nothing. They will pay the $2 online and get immediate functionality. Because the users are paying online, Apple will immediately know exactly who is using the service.

If you AREN'T going to use the upgrade, it's pointless to log in and pay the $2. Maybe if it were free...you would activate it for fun. But why pay even $2 for a service you never plan to use?

Apple wants to develop the streaming video on demand market. Knowing which of it's users have an 802.11n router indicates potential market size and demand. That's key before Apple can move forward. They need to know who might really be able to use the service before creating a new service!

whatever
Jan 26, 2007, 03:16 PM
According to news.com (http://news.com.com/Apple+closes+Wi-Fi+hole/2100-1002_3-6153631.html?tag=nefd.top), it plugs a Wi-Fi hole.

And it is also the 802.11n support that Apple never officially said they were going to charge for.

http://www.notebookreview.com/default.asp?newsid=3475

I'm not sure what's going on here at MacRumors, but it seems like these stories just aren't being caught.

It seems like all of the good information this week landed on Page 2.

fustercluck
Jan 26, 2007, 08:00 PM
And it is also the 802.11n support that Apple never officially said they were going to charge for.

http://www.notebookreview.com/default.asp?newsid=3475

I'm not sure what's going on here at MacRumors, but it seems like these stories just aren't being caught.

It seems like all of the good information this week landed on Page 2.

I just downloaded it. My firmware version is now 1.0.46. Hope that means it's n-enabled. Or draft-n-enabled at least.

I congratulate Apple on being responsive to the user community. Makes me feel good about my recent $2,700 purchase.

Rocksaurus
Jan 26, 2007, 10:47 PM
I doubt it. I've never heard "these forums" accuse Dell of overcharging.
Dell ships crap; Apple overcharges.

Charging for a driver upgrade for something you already bought is a little silly, is the point. It's not as much about overcharging as it is that this $2 upgrade just comes across as unnecessary and stupid.

And to the other guy who said that people wouldn't be singing a different tune, yikes. There would be a few in Dell's corner, but the numbers would be different. If you disagree, go see what non-Mac forums have to say about this. They're laughing at us.

islandman
Jan 26, 2007, 11:39 PM
Since I'll be getting it free with my Airport, it doesn't bother me anyway.

Counter
Jan 27, 2007, 10:11 AM
$2 is not worth the time involved to discuss the matter.

fustercluck
Jan 27, 2007, 03:01 PM
On Apple's download url which is here:

http://www.apple.com/downloads/macosx/apple/firmware_hardware/airportextremeupdate2007001.html#

The writeup states:

"About AirPort Extreme Update 2007-001
The perfect wireless solution for home, school, and business. As it blankets your space with a blazing-fast, secure wireless network, it opens up a world of possibilities for home entertainment, backups, printing, and more. With the AirPort Extreme Base Station, you and up to 50 of your friends, colleagues, or family members can enjoy a robust wireless network offering up to five times the performance and up to twice the range of networks created with the earlier 802.11g standard."

(bold typeface, mine).

That seems to be a very strange disclaimer. Has any other standard had these kinds of limitations? Just curious...

Amdahl
Jan 27, 2007, 03:07 PM
$1.99 won't even buy a cup of coffee these days, so what's the big deal?

If someone says, "It's the principle of the thing," then I'd say, "You need to learn how to choose your fights."

Apple is the one that needs to learn to pick a fight.

They are flat-out lying about why they wanted to charge $5.

The WSJ article quotes former chief accountant of the Securities and Exchange Commission and a member of the Financial Accounting Standards Board, which writes the accounting rules.

If you believe Apple has any credibility on this issue over them, you've obviously got something of Jobs stuck up your rear.

MacinDoc
Jan 27, 2007, 03:30 PM
On Apple's download url which is here:

http://www.apple.com/downloads/macosx/apple/firmware_hardware/airportextremeupdate2007001.html#

The writeup states:

"About AirPort Extreme Update 2007-001
The perfect wireless solution for home, school, and business. As it blankets your space with a blazing-fast, secure wireless network, it opens up a world of possibilities for home entertainment, backups, printing, and more. With the AirPort Extreme Base Station, you and up to 50 of your friends, colleagues, or family members can enjoy a robust wireless network offering up to five times the performance and up to twice the range of networks created with the earlier 802.11g standard."

(bold typeface, mine).

That seems to be a very strange disclaimer. Has any other standard had these kinds of limitations? Just curious...
In other words, AirPort Extreme can only handle 50 simultaneous connections.

Kingsly
Jan 27, 2007, 08:50 PM
$2 is not worth the time involved to discuss the matter.
One gigantic DITTO. :D
And it is also the 802.11n support that Apple never officially said they were going to charge for.

http://www.notebookreview.com/default.asp?newsid=3475

I'm not sure what's going on here at MacRumors, but it seems like these stories just aren't being caught.

It seems like all of the good information this week landed on Page 2.

I'm not sure weather to laugh hysterically or cry. I can't believe all the commotion that a non-existant $2 caused. :rolleyes:

matticus008
Jan 27, 2007, 08:52 PM
They are flat-out lying about why they wanted to charge $5.
Just because it turns out not to be true doesn't make it a lie. It has nothing to do with Apple's involvement--all companies act based on their beliefs about requirements and standards. Sometimes they turn out to have gotten it wrong. It's happened to media conglomerates, websites, and corporations large and small. Sometimes when it does happen, the consequences cost the company hugely; if they were cautious, they avoid losing anything.

If it's a flagrant lie, please offer your explanation as to why Apple would charge such a small amount to such a small number of its user base for a one-time charge which only a small percentage will use to begin with.

First and foremost, only a few hundred thousand computers are affected. Second, anyone who buys Leopard or an Airport Extreme base station gets this for free. Of those few hundred thousand customers (we'll round up and say it's one million), how many of them have a pre-n router right now and more than one n-capable computer? It can't possibly be any higher than 1/3, and is probably much, much lower than that. After the administrative costs involved, even being generous, they're left with no more than $1.

What evil motive would be worth the bad press for at most $300,000? Based on last quarter's performance, Apple makes about 7 times that much money in gross profit daily.

Canerican
Jan 28, 2007, 07:57 AM
What evil motive would be worth the bad press for at most $300,000?

I would have to agree with most of what you said, except the $300,000. Most enthuistic computer users have had draft-N routers for some time now (I had one since May). I think the money that they make won't be huge, and the damage to their reputation will be worse, so I don't get it.

In my opinion there may have been an accounting, or other type of error and now there is a "hole" in their finances and they don't want to have to borrow it from another place... they found this as a way to fix their problem... they didn't count on anyone caring...

fustercluck
Jan 28, 2007, 12:37 PM
In other words, AirPort Extreme can only handle 50 simultaneous connections.

Has that always been the case? Just curious.

jettredmont
Jan 28, 2007, 12:56 PM
Has that always been the case? Just curious.

Yes. I believe that "64" is the actual constraint, but "50" is a much less computer-geekish number to publish and still large enough that most people will never get to it.

FWIW, my current access point has a connected user limit of 16. I'm not sure what the capacity of the standards themselves are (b, g, and n). Even with 'n', though, dividing that speed amongst 50 users and you start to feel not-so-fast. I'd say the practical limit is more along the lines of 20 active users for the base station, although I'm not someone who does that for a living.