802.11n Upgrade Fee Confirmed at $1.99

[matticus008]

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

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

Because, in your example, tell me where they get the CD-Burners that they are trying to reconcile public statements to, since physically it is in your computer and sold to you.

Easy. They do the same thing Apple is doing and the same thing other companies in the past have done to comply. You charge a nominal fee for the update and report it as a component acquisition. Those hypothetical CD burners appear in the original records as CD-ROMs, and in order to upgrade, you would write it off as an internal cost incurred, and report revenue from the sales of the "upgrades" as offsetting that cost. You just about break even and call it a day.

So as I stated before, this is impossible unless they were capitalizing the development of the firmware.

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

 

[MacinDoc]

To me, this is simply akin to Apple charging for a firmware update.

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

 

[poppe]

Still not happy about it... but it'll be better than the original price... Still curious how many macs that Airport Extreme can update?

 

[matticus008]

The $2 is for a mere collection of bits, software that should have been present in the card to start with.

Actually, it's $2 for software and for the hardware that should not have been in the computer to start with. You were never promised 802.11n support, and it was never announced as a feature. You're lucky it was in there.

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

Trouble is, we already paid for the piece of equipment when we purchase our machines.

Yeah, and you paid for a part of Apple's billion-dollar profits this quarter. Does that mean you were overcharged?

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

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

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

If you were sold a quad-core machine and received what was promised for the asking price, you're done. If they double the number of cores in two months and offer to upgrade yours for a lower price than the value difference, well then that would be a good deal, regardless of how they go about doing that upgrade. Bottom line: you choose whether or not to pay the asking price for a given product. If you pay the agreed price in exchange for a product with the advertised features, you've got nothing to complain about.

Still not happy about it... but it'll be better than the original price... Still curious how many macs that Airport Extreme can update?

How many you got? The answer is at least that many +1.

 

[MacinDoc]

Again not true.

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

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

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

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

 

[zoziw]

If this is true and Apple needs to charge the $1.99 then why did Microsoft not charge for the 1080p upgrade to the Xbox 360?

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

 

[caccamolle]

Then I guess you are REALLY pissed at me 🙂

Rocketman

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

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

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

 

[revman]

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

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

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

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

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

Good for you, audit is the armpit now 🙂

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

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

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

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

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

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

At they very least they are protecting themseleves quite nicely.


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

 

[matticus008]

If this is true and Apple needs to charge the $1.99 then why did Microsoft not charge for the 1080p upgrade to the Xbox 360?

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

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

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

 

[revman]

If this is true and Apple needs to charge the $1.99 then why did Microsoft not charge for the 1080p upgrade to the Xbox 360?

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

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

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

LOL

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

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

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

How about that for feeling bad.

 

[tyroja00]

Good for you, audit is the armpit now 🙂

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

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

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

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

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

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

At they very least they are protecting themseleves quite nicely.


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

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

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

 

[O and A]

Ok i absolutely do not understand you people who say it makes sense to pay.

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

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

 

[koobcamuk]

OK, the computer costs over one thousand whatevers and you get benefits for <£2. Just get over it.

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

 

[fustercluck]

To avoid this issue, Apple should have:

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

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

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

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

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

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

Rant over.

 

[tyroja00]

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

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

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

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

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

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

 

[rjfiske]

Not true.

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

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

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

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

 

[fustercluck]

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

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

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

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

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

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

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

 

[bartelby]

Why are some of you people bitching about this!?!?!?!?!!?

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

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

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

 

[twoodcc]

Translation: "We must make more money off of loyal customers."

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

 

[iEdd]

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

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

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

 

[matticus008]

To avoid this issue, Apple should have:

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

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

a) Included the draft-N cards as they did but offered to later send out a free driver/firmware update via Software Update to all customers

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

b) Built the machines with the .g card and lowered the price of the machine accordingly.

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

 

[rjfiske]

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

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

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

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

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

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

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

 

[tyroja00]

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


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

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

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

 

[matticus008]

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

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

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

 

[SeaFox]

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

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

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

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