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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
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.
 
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.
 
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.
 
The accountants are being a bit disingenious

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].
 
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.
 
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.
 
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).
 
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). 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.
 
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?
 
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.
 
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.
 
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.
 
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.
 
AirPort Extreme Update 2007-001

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.
 
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.
 
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! ;)
 
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.
 
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.
 
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.
 
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
 
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