Prominent Accountants Blast Apple's $1.99 802.11n Upgrade Reasoning

How do you feel about Apple's decision to charge $1.99 for 802.11n

  • It's Fine

    Votes: 89 36.8%
  • Don't like it

    Votes: 104 43.0%
  • It'd be okay if they gave an adequate explanation

    Votes: 49 20.2%

  • Total voters
    242
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.
 
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.
 
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.
 
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?
 
How do you get 1000 idiotic mac nerds running?

Roll a $2 coin down the street :D

Somebody had to say it :eek: :p
 
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.
 
Auditors Are Lawyers

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!
 
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:

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?
 
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?
 
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.
 
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.
 
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.
 
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.
 
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.
 
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.
 
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.
 
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.
 
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​
 
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.
 
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.
 
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.
 
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 ...)
 
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.
 
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