802.11n Upgrade Fee Confirmed at $1.99

[hagjohn]

I think paying $1.99 is worth the price of loyalty. Call me blind, call me fanboy, but at least I'm paying for the "future." Regardless of legality, Apple was thinking of how to make it easier for me to have this technology without waiting for future lines (e.g. MacBook) and for that I say thanks, with my $1.99!

That's exactly what (all) business's want you to think and do. Meanwhile, they are making millions of more dollars for something you already bought.

I think you can expect more of these in the future.

 

[ryboflavo]

That's exactly what (all) business's want you to think and do. Meanwhile, they are making millions of more dollars for something you already bought.

I think you can expect more of these in the future.

I understand what you are saying, however most companies and corporations are not like Apple and I put my faith in their idealogy. They stand for something different and are not about nickeling and diming their loyal customer base. Obviously, there will be times that call for "corporate-style" actions, but I can live with it every once in awhile, especially since it's a rarity.

I didn't already buy access to the 802.11n availability. A good example might be Quicktime and Quicktime Pro. Quicktime has all the features of Quicktime Pro already built-in, but you have to pay $29 to have access to the Pro features. But to do this with hardware is great, prevents us from having to buy a future line to utilize the "n" network.

Good point, but I recognize what most companies what me to think and what really is. $1.99 is worth the upgrade to me, that's all that matters. Choosing my battles I suppose.

 

[jay_app]

That's exactly what (all) business's want you to think and do. Meanwhile, they are making millions of more dollars for something you already bought.

I think you can expect more of these in the future.

You're getting a 70$ value for $1.99 - what's wrong with people. You didn't know you had n capabilities when you bought the computer - Apple said it had b/g only - You're getting a gift be thankful.

Its not a money making scheme.

 

[TIGERmac]

Every time I think I've finally figured this stuff out I read another post and my understanding goes out the windows. By the way, to all those accountants and lawyers who've patiently explained this 10000 times... thanks for humoring us.

I finally get why apple has to charge for the N updater this time around. I don't understand why apple won't have to charge for the next one. How does one know where the line between software update and "material change" is drawn?

As I figured it we are paying this fee since 802.11N is an entirely new standard that operates differently then previously implemented wireless standards. Can't the same be said for the final N standard when compared to the draft N standard that apple is selling us?

The $1.99 fee that Apple is charging constitutes an "upgrade" in the eyes of GAAP. Apple is providing you with a new hardware capability, and you are paying a fee for it. Now, I know that nothing has changed hardware wise within your computer, but from an accounting standpoint your hardware has been upgraded to a new, faster 802.11n wireless standard. The fact that the standard is still in the draft phase isn't really relevant. Your computer is now viewed as having this faster wireless capability. A future software update to bring the firmware to the final standard would be viewed in the same way as a security update or bug fix. Your computer's capabilities aren't substantially changed by it.

After reading most of this thread (and a few others that have appeared on the subject) I still feel as if apple royally screwed up on this. As I said previously, I understand why apple now has to charge this $1.99. IMHO, apple should have foreseen this, done the accounting differently, and avoided this whole PR mess entirely.

I'm not an accountant, and that's precisely the problem... most people who buy these computers (as certainly has been shown in this thread) aren't either, and have little understanding of accounting law. To me, and the general public I'd imagine, it doesn't matter whether accounting wise I payed for 802.11N or not... and even though I've learned it's not the case, it still seams like I did. The hardware's in my computer so someone had to pay for it, and seems as if we did, whether we knew it or not.

Well, it's easy to look back and see that maybe things should have been done differently. The problem is that the people designing these computers aren't generally knowledgeable about accounting issues. They're not aware that there could be accounting implications and don't notify the accounting department of their plans. I assure you this is not unique to Apple.

Also, the PR issue probably isn't as large or widespread as you might think. The average consumer doesn't keep themselves informed of such issues. I'd venture to say that many will never be aware that this upgrade exists, and among those that are aware, few will question why they have to pay $1.99 to enable the capability--they will choose yes or no and give it no further thought. The people on these boards are a unique subset of Apple's customer base; thus, all of the discussion on these sort of topics.

 

[panoz7]

The fact that the standard is still in the draft phase isn't really relevant. Your computer is now viewed as having this faster wireless capability. A future software update to bring the firmware to the final standard would be viewed in the same way as a security update or bug fix. Your computer's capabilities aren't substantially changed by it.

From what I've heard and found online the Draft-N standard may be as different from the B/G standard as the Final-N is different from Draft-N. matticus008 mentioned that it may even require hardware that's different (more / different antennas). If I understand this we won't have to pay since it's still N but if they were to name the final standard 802.11M we'd have to pay. That's what I don't understand.

The problem is that the people designing these computers aren't generally knowledgeable about accounting issues.

But the accountants should be. The people who design the computers aren't the ones selling them or buying the parts that are going in them. I don't care what anybody says... the N hardware had to cost more then the G hardware... and that had to be approved by some accountant who should have seen this coming.

As for the public reaction... apple's already responded to it somewhat by lowering the price of the updater.

 

[TIGERmac]

From what I've heard and found online the Draft-N standard may be as different from the B/G standard as the Final-N is different from Draft-N. matticus008 mentioned that it may even require hardware that's different (more / different antennas). If I understand this we won't have to pay since it's still N but if they were to name the final standard 802.11M we'd have to pay. That's what I don't understand.

The name isn't as important as the functionality. The issue revolves around the fact that you're gaining a new substantial hardware capability. Apple obviously feels that the hardware it has included will be capable of the final spec. Hardware manufacturers are involved in creating the final spec, so I would be extremely surprised if the final standard didn't work on hardware sold as pre-N. If the unlikely were to occur, then the issue of charging for a final draft firmware update becomes a moot point. The key emphasis is on the hardware "upgrade." Minor changes to comply with the final specification wouldn't require an additional fee. Now, if 6 months later (hypothetically) they were to release a new standard that offered substantial increases in transmission speeds and security, etc. over 802.11n (and coincidentally, the hardware in your computer is capable of supporting the new standard) then you may incur an additional charge to "upgrade" your hardware to the new standard/capability.

But the accountants should be. The people who design the computers aren't the ones selling them or buying the parts that are going in them. I don't care what anybody says... the N hardware had to cost more then the G hardware... and that had to be approved by some accountant who should have seen this coming.

As for the public reaction... apple's already responded to it somewhat by lowering the price of the updater.

Similarly, accountants aren't always very tech-savy. Accountants deal with part numbers, inventory numbers, etc. The part numbers are specified by engineers/designers and purchasing puts in an order for a given quantity of a certain part number. What it boils down to is that both specialize in their own fields and rarely directly interact with each other. In a large company, things like this aren't out of the ordinary.

Finally, the N hardware likely didn't cost any more than the G hardware. Let's say that the G card cost Apple $50. Once the supplier began producing pre-N cards, they could have easily offered Apple those cards for $50. They would also obviously reduce the price of G card to say $40. It isn't costing Apple any more for the new pre-N card. Intel does the same thing with microprocessors. The new, faster processor takes over the top price point and the prior-fastest moves to a lower price point.

I hope this helps.

 

[matticus008]

I finally get why apple has to charge for the N updater this time around. I don't understand why apple won't have to charge for the next one. How does one know where the line between software update and "material change" is drawn?

As has been explained by TIGERmac, once the initial capability is there, anything further is simply an update, revision, or fix. 802.11n is not itself a simple evolutionary update, as it requires specialized hardware to function. If they were to introduce a wholly new standard (say 802.11p) which required new hardware, you'd have to buy that hardware in order to get that functionality. That's the logical problem at the heart of this mess.

No one can know for sure exactly where the line is, because it all comes down to how the facts are presented and what the inclination of the bench is when you're stuck in litigation. That's why when you know you're so close to the limits that you're splitting hairs, you generally react with caution rather than risk it if you have a business to protect. It's possible that Apple could have gotten away with not charging, but it's equally possible that they wouldn't. Before someone comes along to attack the profession, that's exactly how the practice of law is supposed to work. If the facts were always black and white, there'd be no reason to have courts.

Can't the same be said for the final N standard when compared to the draft N standard that apple is selling us?

Not unless the final 802.11n standard requires different hardware than the current draft-n products, or if the protocol were scrapped and rewritten from the ground up. This latter concern is why hardware is rarely released very early in the drafting phase (when IEEE announces that they will begin certifying draft implementations, that means they're reasonably close).

IMHO, apple should have foreseen this, done the accounting differently, and avoided this whole PR mess entirely.

Yes. But they didn't, and no one can legitimately be upset about Apple delivering more than was ever promised.

To me, and the general public I'd imagine, it doesn't matter whether accounting wise I payed for 802.11N or not...

Right. But the general public doesn't read Macrumors and doesn't even know the backstory. All they know is that they can upgrade to faster wireless networking for $1.99 if they want to. And really, that's as simple as it needs to be.

 

[shamino]

Apologies for the huge posting and tons of quoting. I figure this is better than a dozen individual posts...

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

The 802.11n specs are an IEEE project. You can buy the spec sheet from IEEE. If you're a manufacturer working on 802.11n products, you probably should join the IEEE and participate in the working group's discussions as well, in order to stay on top of changes before drafts are published.

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

It will really depend on what the final spec ends up looking like. If your capabilities remain pretty much the same, then no. If the final spec ends up with substantially more capabilities, then maybe yes.

The fact that Apple is advertising 802.11n and not "pre-n", may also factor into it. Accounting may see pre-n firmware as "final-n with bugs", making the update a bug-fix, not a new product.

Accounting is weird. The rules aren't always obvious or logical.

By allowing the fact that n chips were in the computer to become public knowledge...

Apple never advertised the presence of these chips until the announcement of the updater. I don't think you can claim that they made a promise based on what third parties discovered as a part of taking apart the computer. Especially when the product documentation tells you that you aren't allowed to take it apart (under penalty of losing your warranty.)

But there's another possible issue here. Now that Apple has announced n-capable hardware, if they would make the updater available for free, current sales would be considered incomplete. Even if Apple ships with the n-firmware from the factory today, the units currently on store shelves would be considered incomplete sales. This could make things ugly.

Absolutely correct! GAAP does not tell you whether to charge or what to charge! ...

Absolutely correct. They don't tell you to charge. But by not charging, you trigger a series of rules whose consequences may be much worse than simple charging $2 for the update.

5. Apple sells an iPhone for $499, and says "It will support 3G." But not in June???? ...

Assuming, of course, that they update the iPhone for 3G. It is equally likely that they'll simply start selling a new model (with 3G) at that time, and never upgrade the original model. Which also avoids any accounting headaches.

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

Actually, most of these modems (X2 and K56Flex) were flash-upgradeable to V.90. And the updates were free. I know I downloaded and installed mine for free.

Most of these modems were advertised as being upgradeable (just like USR's Courier v.everything modem made this claim when 33.6 was the pre-release spec.)

What this did for the accountants, I don't know. The fact that one 56K protocol was replaced with a different 56K protocol, giving the user no actual new features, may have been an important factor here.

The issue revolves around the fact that you're gaining a new substantial hardware capability. ... Now, if 6 months later (hypothetically) they were to release a new standard that offered substantial increases in transmission speeds and security, etc. over 802.11n (and coincidentally, the hardware in your computer is capable of supporting the new standard) then you may incur an additional charge to "upgrade" your hardware to the new standard/capability.

Which might be the case. The 802.11n documents I've been reading say that the final spec will support 540Mbps (that is, 10x 802.11g speed). But Apple is advertising their "n" update as "5x" (270Mbps). This may be because of a hardware limit, or it may be because speeds above 5x are not standard enough to consider deploying. If the latter is true, then the final update may end up requiring a new charge. (Or they may update the code to the final-n spec, but not provide support for more than 270Mbps connections, and make it a free update.)

Or they might make the full 10x-speed update free, figuring that the only "incomplete" product shipped is the 802.11n updater, which only costs $2. Deferring a $2 cost may be acceptable, whereas deferring the whole cost of the computer would not be.

In other words, there's really no good way to know at this time.

Thankfully, we might see something toward the end of 2007.

According to what I've been able to dig up, 802.11n is expected to be finalized in March 2008, with IEEE publication in April 2008. Assuming the working group doesn't hit any snags that may require more time or more drafts.

 

[Canerican]

You're getting a 70$ value for $1.99 - what's wrong with people. You didn't know you had n capabilities when you bought the computer - Apple said it had b/g only - You're getting a gift be thankful.

Its not a money making scheme.

Yes it is.

Your wireless card is already 802.11n capable, you paid for that when you bought the computer. You are paying $1.99 for a driver that should be free.

They crippled their own hardware with a software restriction... they know that they will be making a lot of money.

I'll buy the driver, but this bad decision has me rethinking buying more Mac products... I make a good amount of money, a $1.99 isn't alot, its principle. Apple has a moral and ethical responsability to unrestrict its own products, and not charge the consumer who already paid to use that service again.

 

[shamino]

Apple has a moral and ethical responsability to unrestrict its own products, and not charge the consumer who already paid to use that service again.

Just out of curiosity, do you also complain about all the other products that are software-restricted, and which the manufacturer will not unlock for any amount of money? Things like cars, phones, DVD players, televisions, kitchen appliances, etc.?

 

[Canerican]

Just out of curiosity, do you also complain about all the other products that are software-restricted, and which the manufacturer will not unlock for any amount of money? Things like cars, phones, DVD players, televisions, kitchen appliances, etc.?

Actually yes. I switched from Verizon because they crippled my Razr... If they don't do the right thing, and don't tell me when I'm going into it, they are guilty.

The difference between this and most situations is that they don't hold your hardware ransom for a fee... They may cripple it, but at least they don't charge you fix it.

Imagine if you bought an HDTV, you paid extra for that. Now whoever the manufacturer is decides to charge $19.99 to unlock the HDTV feature. You would pay it, but you thought you were getting HDTV simply because you paid for it... Apple has a responsability not to charge us for a feature that they had told me was on my machine pending a driver... If this is really an accounting issue (i.e. the have to charge), they could charge $0.01, 0.49, or any smaller amount. My guess is Apple will see that their stakeholders hate this decision and reverse it, or at least lower it, so they can fix their accounting error.

And since when does the consumer pay for the seller's accounting mistake?

 

[shamino]

Actually yes. I switched from Verizon because they crippled my Razr... If they don't do the right thing, and don't tell me when I'm going into it, they are guilty.

I assume you're referring to the fact that they disable BlueTooth file transfer. Did they tell you that it had this capability? I'm sure they didn't. When I asked them, they said it was impossible. If you were assuming additional capabilities because a similar phone from another carrier had them, that's your fault, not theirs.

The difference between this and most situations is that they don't hold your hardware ransom for a fee... They may cripple it, but at least they don't charge you fix it.

Ransom? Did Apple promise you an 802.11n card when you bought your MacBook? You know they didn't. Again, if you bought one based on what you read on some stranger's take-apart web site (which probably also said that the 'n' features were disabled), how is that holding anything for ransom.

Do you always expect to get features that nobody is promising, just because some third-party tells you to?

Imagine if you bought an HDTV, you paid extra for that. Now whoever the manufacturer is decides to charge $19.99 to unlock the HDTV feature.

That's not the same situation and you know it.

A TV-analog would be you buy a standard TV, and six months later find out that there are HDTV chips in it. Do you think the manufacturer owes you HDTV capability? Why? You knew nothing of the capability until long after you made your purchase.

I guess you will never be happy about anything you buy.

 

[Canerican]

I assume you're referring to the fact that they disable BlueTooth file transfer. Did they tell you that it had this capability? I'm sure they didn't. When I asked them, they said it was impossible. If you were assuming additional capabilities because a similar phone from another carrier had them, that's your fault, not theirs.

I asked if it was possible, and he said "there are ways." So I took it at that. I seem edited my phone, but couldn't enable OBEX, so I was going to try flashing to Alltel, but figured, Verizon isn't that great, so I bought a KRZR.

Ransom? Did Apple promise you an 802.11n card when you bought your MacBook? You know they didn't. Again, if you bought one based on what you read on some stranger's take-apart web site (which probably also said that the 'n' features were disabled), how is that holding anything for ransom.

When I went to the Mac store, I said, "I read that the MB is 802.11n capable... is this true." The guy said, "Yes, but the driver isn't out yet." "So it's just a driver, nothing that will cost me money." "No."

Now, I was talking to a saleswomen who wasn't computer savvy, but I was misinformed

A TV-analog would be you buy a standard TV, and six months later find out that there are HDTV chips in it. Do you think the manufacturer owes you HDTV capability? Why? You knew nothing of the capability until long after you made your purchase.

That's not at all what I described.

I am usually happy with my purchases, I own one laptop and 2 desktops, 2 widescreen TVs, etc...

I have never been as disapointed with a product than with my MB. I buy a hyped up producted and look what happens....

 

[shamino]

I asked if it was possible, and he said "there are ways." So I took it at that. I seem edited my phone, but couldn't enable OBEX, so I was going to try flashing to Alltel, but figured, Verizon isn't that great, so I bought a KRZR.

Apparently, your Verizon store is staffed by hackers. The people at my store aren't allowed to say anything more than the company line. They have always told me that the only way to get photos and other objects into and out of the phone is to send it over the air, and pay the fee for pix-messaging.

When I went to the Mac store, I said, "I read that the MB is 802.11n capable... is this true." The guy said, "Yes, but the driver isn't out yet." "So it's just a driver, nothing that will cost me money." "No."

Again, you must have an interesting store to get answers like that.

At the Apple Store here, all I get is quotes from the web site. If I press any further, the answer is almost always "we're not allowed to speculate on future development."

The salesperson who promised you a free driver update could be fired from his job for making a promise like that.

 

[daneoni]

Will there be a similar fee in the UK as well?

 

[tschmidty6]

New Airport Extreme on Older Machines

What details do we know about the new airport extreme and how it will work with older machines? I have an iBook G4 right now and am looking to hook up a 320gig MyBook by Western Digital (which I already own) to the new Airport Extreme and acesses it wirelessly it through that. I also will be getting a MacBook in June. If I purchase the basestation now, will it work flawlessly with my iBook? Will the 802.11n capablilities get in the way? I'd apprecaite any tips / knowledge you might have. Thanks!

Travis

 

[pr43]

Alternatives to $1.99 upgrade

Two options that were available to Apple to avoid the accounting consequences:

1. Do not slipstream "n" upgrade in hardware. This would have obviated all the issues, because a software enhancement/upgrade would not have been possible. No upgrade, no accounting issue. Then again, anyone who wanted 802.11n performance would have been forced to upgrade their computer (rather than upgrade software) at a later date. Do you want to spend $2.00 now or $2,000 later? That's an easy choice to make for most end customers.

2. Do not make the "n" upgrade available to existing 10.4 users and only make available with release of 10.5 later this year. Apple will charge for the new or upgraded Leopard licenses, so the accounting issue is made mute. If this were to happen, then you would have to upgrade to 10.5 and there would be not "n" upgrade path to 10.4; or there would still be a fee to be charged.

In the end, a $1.99 upgrade fee serves many interests and not just Apple's.

The software revenue recognition rules in their current form were first promulgated in 1997. Not only are there few practitioners who truly comprehend these issues, but the governing bodies (FASB and SEC) are propagating these obfuscated accounting principles beyond the software industry. You will see many other companies and industries affected by these standards with often incoherent outcomes.

Finally, a compliment to TIGERmac and a few others who have tried to explain the accounting issues. I have been in the accounting industry for nearly 20 years and in software/tech for more than 10 years. I long ago gave up trying to coherently explain revenue recognition to others. Most people can't or don't even balance their checking accounts. With such an audience, why bother to try to explain such arcane issues.

 

[dejo]

When I went to the Mac store...

What's a Mac store?

 

[Canerican]

2. Do not make the "n" upgrade available to existing 10.4 users and only make available with release of 10.5 later this year. Apple will charge for the new or upgraded Leopard licenses, so the accounting issue is made mute. If this were to happen, then you would have to upgrade to 10.5 and there would be not "n" upgrade path to 10.4; or there would still be a fee to be charged.

That was what I was thinking would be a better solution... Instead we get some crappy excuse.

 

[NightStorm]

That was what I was thinking would be a better solution... Instead we get some crappy excuse.

If that would have happened, there would be outrage from those who "were being forced to upgrade to take advantage of the hardware they rightfully bought."

You see, Apple is damned if they do and damned if they don't.

 

[MikeTheC]

First off, let me state that according to IQ Test.com I have an I.Q. of between 106 and 111 (I took the test a couple times). So, clearly, I'm no Albert Einstein. That being said...

I really don't see the relevance of any kind of legal oversight in this situation, apart from maybe the always-present "false advertising"-ish kind of thing. And normally that implies an "over-promise, under-deliver" situation, which this clearly is not.

So Apple puts out a firmware update and a finished set of drivers. I just simply don't understand how this can be differentiated from any other prior instance in Apple's history (and there have been quite a number) where something like this has happened (that is, Apple produced more and/or better drivers, Apple produced a firmware update, etc.).

Maybe I'm just being stupid or obtuse here, but it seems to me that by this same rationale, Apple should never again produce a free update of any kind without charging something for it. After all, where do you draw the line between "bug fix" and "functionality enhancement"? Depending on how a person looks at such things, this is no longer a line but rather a continuum, and a rather grey one at that.

How is it that Apple is "allowed to get away with" offering all the updates that they do for their various products? Should they not all cost the user, say, $1.99?

I honestly just don't understand any of this. And that is after having carefully read all the prior posts in this thread.

 

[Canerican]

How is it that Apple is "allowed to get away with" offering all the updates that they do for their various products? Should they not all cost the user, say, $1.99?

I don't think so. When I buy any type of software or hardware, unless I am told otherwise, I expect to be given updates for a certain period of time.

That being said. I believe that if Apple chose to give users who owned a Mac for say 6 months or less the driver for free, and the rest $1.99-$4.99 I think that would be fair and this whole conversation wouldn't even exist.

 

[macfan881]

Geez people, don't get your panties all wet.

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

You have got to be kidding me.

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

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

Get a grip people.

amen to that

 

[Canerican]

Except I expected the upgrade, and $100 on $18,000 is alot different than $2 on a $599 Mac Mini.

It would be like saying, "this car has a turbo! You only need to pay me $100 and I'll give you a super special key." I'll fork it over, but I'll probably make sure that no one I know ever buys a Honda.

And like I said, I have a lot of money, this is all principle.

PS- Thanks for the IQ test link... It proved that I am purty smart...

 

[NightStorm]

Except I expected the upgrade, and $100 on $18,000 is alot different than $2 on a $599 Mac Mini.

It would be like saying, "this car has a turbo! You only need to pay me $100 and I'll give you a super special key." I'll fork it over, but I'll probably make sure that no one I know ever buys a Honda.

And like I said, I have a lot of money, this is all principle.

PS- Thanks for the IQ test link... It proved that I am purty smart...

Off-topic here, but Honda doesn't offer any turbocharged vehicles (Acura has one).