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Apple Charges For 802.11n, Blames Accounting Law

kdawson posted more than 7 years ago | from the don't-release-early-or-often dept.

Wireless (Apple) 471

If you have a Core 2 Duo Macintosh, the built-in WLAN card is capable of networking using (draft 2) 802.11n. This capability can be unlocked via an update Apple distributes with the new AirPort Extreme Base Station. Or, they will sell it to you for $4.99. Why don't they give it away for free, say with Software Update? Because of the Sarbanes-Oxley Act (which was passed in the wake of the Enron scandal). iLounge quotes an Apple representative: "It's about accounting. Because of the Act, the company believes that if it sells a product, then later adds a feature to that product, it can be held liable for improper accounting if it recognizes revenue from the product at the time of sale, given that it hasn't finished delivering the product at that point."

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471 comments

Don't tell Microsoft! (4, Interesting)

celardore (844933) | more than 7 years ago | (#17636824)

Imagine if they even charged $1 for every patch, for every user. There are more MS patches for a product than every dollar in the asking price for said product. I'm aware that Apple are scared because it's a "new feature", but MS has done that a lot.

Re:Don't tell Microsoft! (5, Informative)

BWJones (18351) | more than 7 years ago | (#17636926)

The issue here is that Apple's patch can be construed as "new functionality" as there is significantly increased network performance in products that have been shipping for months, whereas most of the patches from MS are attempting to fix existing, yet broken functionality.

Re:Don't tell Microsoft! (5, Informative)

Anonymous Coward | more than 7 years ago | (#17636992)

Microsoft add new features too. The security centre & windows firewall for one example.

Re:Don't tell Microsoft! (5, Funny)

Jon Luckey (7563) | more than 7 years ago | (#17637188)

Microsoft add new features too. The security centre & windows firewall for one example.

Wait! You forgot the most important new feature of all: Windows Genuine Advantage®

Hard to picture how we could get along without it, these days.

Re:Don't tell Microsoft! (0)

Anonymous Coward | more than 7 years ago | (#17637476)

You could argue they're attempting to fix the broken security of Windows.

Re:Don't tell Microsoft! (1)

MicktheMech (697533) | more than 7 years ago | (#17637590)

Microsoft is also quite famous in the business world for deferring a lot of revenue. The logic they use is that a significant chunk of what you pay for a copy of their software is the ongoing support. I'm guessing (no idea if this is true) that Apple is recognizing all of its revenue at the time of sale and is worried that if they increase the functionality now someone (a la Spitzer) will come along and say that they recognized some of the revenue from those sales too early.

Re:Don't tell Microsoft! (1)

Ucklak (755284) | more than 7 years ago | (#17637768)

What hardware did that enable?

The update in question enables dormant hardware that isn't being charged for in the purchase of the product.

It's the same as if Apple sells 2 types of iSight cameras. One that is the normal web camera that uses the visible spectrum and another that enables x-ray vision.
The cameras are the the same but the software package that accompanies the camera is different.
They could sell an update to those who purchased the visible camera to enable the x-ray vision at an additional cost.

I'm trying to not be an apple apologist as the $4.99 price is ridiculous but in the case of Microsoft vs X where X is Apple, your comment doesn't hold.

People buy computers to do N.
Computer makers use Windows to make sure that said computer does N.
If Computer Maker A sells you a computer with a dual DVI head yet only of them works, then the comparison is valid.
Computer Maker A would then have to sell you the 'free' update.

Apple sells hardware. They include software to make the hardware usable.
They also sell software but it only works on their hardware.
The software update is for their hardware.

Re:Don't tell Microsoft! (2, Insightful)

UnknowingFool (672806) | more than 7 years ago | (#17637084)

I guess then it should not be called a "patch" but an "upgrade". A patch implies that it was not working properly in the first place.

NVIDIA has done this (4, Informative)

Anonymous Coward | more than 7 years ago | (#17637002)

If you have a GeForce/Quadro, it is called 'NVIDIA PureVideo Decoder'.

Re:Don't tell Microsoft! (2, Insightful)

Lux (49200) | more than 7 years ago | (#17637508)

I believe MS already defers some of the income from Windows sales by considering the product partially delivered and feeds that into the support teams over time. The practice would predate Enron though, and was probably started to keep the stock price stable. Ie: they can show a more steady income stream on paper despite long product cycles.

If only Apple were so savvy! :)

*ducks*

Re:Don't tell Microsoft! (1)

Sebastopol (189276) | more than 7 years ago | (#17637702)

Again, bugfixes are specifically not the same under S/O.

sounds like (1, Interesting)

BadERA (107121) | more than 7 years ago | (#17636844)

mo' money, mo' money, mo' money. Apple, greedy? Say it ain't so!

Oh wait ... I'm not a fanboy ... and they're just like any other corporation ...

So are they not going to patch software anymore? (0)

Anonymous Coward | more than 7 years ago | (#17636850)

How exactly does this work in their little minds?

Re:So are they not going to patch software anymore (1)

creimer (824291) | more than 7 years ago | (#17637154)

Some patches are worth more than other patches, as George Orwell might say if he owned a computer. ;)

bs (5, Insightful)

joesao (466680) | more than 7 years ago | (#17636860)

This explanation doesn't hold water -- then why don't they charge for software updates, and why not charge $1.99, or $0.99, or even $0.01, instead?

Re:bs (3, Interesting)

RFaulder (1016762) | more than 7 years ago | (#17636900)

That seems to make mroe sense, a 99 update over te iTunes network would be simple enough.

Re:bs (-1, Troll)

dthable (163749) | more than 7 years ago | (#17636952)

They do charge for updates. Around $150 every year or so.

New OS X. New source of money. It was the one reason I didn't stick with the Mac. Pay to keep up or don't get anymore patches.

Re:bs (0)

Anonymous Coward | more than 7 years ago | (#17637236)

Oh Jesus, here we go. Would someone please just save us all some time and cut-n-paste the 100+ comment argument about "new version of the OS" versus "update" that's sure to follow a comment like this?

Re:bs (4, Funny)

Overly Critical Guy (663429) | more than 7 years ago | (#17637430)

I love when people lie and claim you have to pay "every year" even though new versions of OS X come out about every 2 to 3 years. Kudos for silently jacking up the price to $150 as well.

I seriously doubt you ever used a Mac or quit using it because of that.

Re:bs (0)

Anonymous Coward | more than 7 years ago | (#17637734)

Software updates are fixes for functionality they have already sold you. They only have to charge for new functionality. At the company I work for, we were forced to halt our practice of free upgrades for everybody.

They can't charge $0.01 because the price does have to reflect in some way what they think it is worth. I bet Apple could care less if you pirate this though.

Apple is not making this up. Sarbanes-Oxley really is this dumb.

Finally! (5, Funny)

Protonk (599901) | more than 7 years ago | (#17636862)

NOW Apple pays attention to accounting laws!

:)

Re:Finally! (1)

Jamil Karim (931849) | more than 7 years ago | (#17637038)

You are right. Not paying attention to accounting laws isn't an option for Apple at the moment...

If you didn't groan, my work here isn't done... =)

mmm.. boooze.... (2, Interesting)

jythie (914043) | more than 7 years ago | (#17636864)

Sounds like someone had way to much to drink before going live.

Either that or someone high up in apple is really jumpy right now and it playing it safe to insane degrees.

Re:mmm.. boooze.... (3, Insightful)

Midnight Thunder (17205) | more than 7 years ago | (#17637046)

Either that or someone high up in apple is really jumpy right now and it playing it safe to insane degrees.

After the stock options issue, you bet that they are being over cautious. Now whether they are interpreting the law correctly, is another matter.

Wow (2, Insightful)

Umbral Blot (737704) | more than 7 years ago | (#17636870)

Either a) anyone who offers a patch that fixes a bug or adds a feature and doesn't charge for it (which happens all the time, for example: windows update) is breaking the law or b) Apple is delusional / wanted an excuse to charge you more money.

I know which one I believe.

Re:Wow (5, Insightful)

steve_bryan (2671) | more than 7 years ago | (#17636976)

How about (c) You are incapable or unwilling to actually read an article before typing your uninformed opinion. The change due to Sarbanes Oxley only applies to new features, not bug fixes. Now you may return to anguished seething about how much you hate Apple and Steve Jobs.

Re:Wow (1)

killa62 (828317) | more than 7 years ago | (#17637056)

But can microsoft reasonably argue that the windows powertoys do not add new features?
http://www.microsoft.com/windowsxp/downloads/power toys/xppowertoys.mspx [microsoft.com]

I think that apple is just trying to eek out a profit

Re:Wow (2, Informative)

UnknowingFool (672806) | more than 7 years ago | (#17637316)

PowerToys is considered a beta offering. Microsoft will not support it and thus is not a product. From the page:

We take great care to ensure that PowerToys work as they should, but they are not part of Windows and are not supported by Microsoft. For this reason, Microsoft Technical Support is unable to answer questions about PowerToys. PowerToys are for Windows XP only.

Re:Wow (1)

moonbender (547943) | more than 7 years ago | (#17637692)

The crucial thing is not that it's a beta or that it'r not supported, the crucial thing is that it is not part of Windows. It's an additional product, which happens to run on Windows. Apple would have a fairly hard time arguing that a patch to its hardware's firmware is a seperate product, the patch obviously adds a capability to a product Apple has already sold. It's also not a bugfix, since it's also a feature they haven't advertised in the past. (I'm not taking a position here, this is the reasoning as I understand it from the discussion on Ars Technica.)

Re:Wow (2, Informative)

steve_bryan (2671) | more than 7 years ago | (#17637368)

I suspect Apple is just spreading the pain resulting from Sarbanes-Oxley and as time passes others, probably including Microsoft, will be forced to a similar position. At this point the idea that Apple has to "eek out a profit" is comical. Take a look at the financial numbers for Apple to see how silly that comment is. There are reasons why their stock price is at its highest level ever.

Re:Wow (4, Insightful)

Trillan (597339) | more than 7 years ago | (#17637452)

No, Microsoft can't possibly argue that PowerToys don't add new features. But PowerToys is not hardware, and it has been out longer than the Sarbanes-Oxley Act.

Apple doesn't need a few hundred people spending $4.95 to be profitable. I think they're on to something here in their interpretation of the law, unfortunately. I'm not a lawyer, but you can bet Apple had their lawyers look at it.

Re:Wow (1)

Lussarn (105276) | more than 7 years ago | (#17637788)

but you can bet Apple had their lawyers look at it.

I'm sure they have, they have probably looked for months on how they can make it illegal to distribute free patches. Now they have found a "loophole" and can start charging money for simple upgrades to a driver.

Re:Wow (1)

Lumpy (12016) | more than 7 years ago | (#17637222)

Microsoft has done this before.

Windows 98 was a $100.00 patch to windows 95. Windows 98SE was a patch to windows 98 that ALSO cost money.

I dont consider Windows ME to be an upgrade to anything.

Origin of this whole problem (2, Insightful)

LunaticTippy (872397) | more than 7 years ago | (#17637360)

I worked at a place that abused accounting principles. They'd book revenue on hardware that hadn't shipped or even been made, software that wasn't installed or even sold yet, and move all kinds of valid and imaginary revenue from the vague future to the current quarter like crazy.

I understand why we need laws about when you are supposed to book revenue because I've seen it abused. The whole house of cards collapses hard when growth slows. My job was lost when the dotcom bubble burst and they couldn't hide their baloney in triple digit growth any more. Same thing happened at many other companies.

This seems like an innocent case, but I thought I'd point out there are other possibilities.

Option (c) (5, Insightful)

EmbeddedJanitor (597831) | more than 7 years ago | (#17637370)

They might want to just take a poke at the act because it makes it hard to conduct business.

This is actually a real problem. If you sell a product that has upgradable firmware then you need to only recognise revenue as you provide the service. For example let's say you sell a device for $1000 and provide free firmware upgrades for 1 year. You might structure this that the base product is worth $900 and the 12 months tech support is worth $100. You then recognise the revenue as $900 at time of sale and $100/12 per month.

For a product that has free firmware upgrades "forever", you might introduce some reasonable lifetime (like 3 years), perhaps the typical depreciation period for the product.

Now Apple beancounters fucked up. They recognised all revenue immediately. They should have really defered some of the revenue recognition but they wanted to look all shiny for Wall Street (Enron, on a smaller scale). By chraging for this upgrade they're probably hoping to create a loop hole.

Needless to say, MS most likely just moons the act and does not care any more than they care about the DOJ nailing them with anti-trust.

Re:Option (c) (3, Interesting)

bluephone (200451) | more than 7 years ago | (#17637726)

But would this still apply if you never promise to upgrade it? TFA says that the clarification from Apple is that they may be accused of selling unfinished products, and recognizing revenue from those unfinished products too early (which is retarded IMO, but then I'm not an accountant). If they never come out and state they WILL offer new features, but DO later with these firmware updates, could they not then claim the product was finished, but these were free bonus features? They can justly state that consumers bought the product as sold with no promises of future expansions, thus the customer wasn't buying some potentially unfulfilled future promise (which, IIRC was the point of anti-Enron laws, to keep companies from spending now money that had to be used to fulfill their obligations).

Similarly, what if: with the products there's a disclaimer that Apple makes no guarantees that there will be future product enhancements, only bug fixes for the declared product lifespan (like MS does with Windows support lifetime declarations), and that any future product enhancement that MAY exist MAY OR MAY NOT be offered for free to existing users of this product.

This is where we get asinine workarounds just to comply with poorly drafted and overly expansive laws that are crafted too quickly and reach too far. This is why accounting, and law in general, is so byzantine needed the existence of entire cadres of lawyerbots just to navigate the waters...

Doesn't Make Sense to Me (3, Insightful)

Cap'nPedro (987782) | more than 7 years ago | (#17636874)

So why does it cost $4.99 for a feature which tas taken very little work to implement?

OK, so it's fair that they're charging for it - if you believe their excuse, but why not $0.99 or $1?

Re:Doesn't Make Sense to Me (1)

bar-agent (698856) | more than 7 years ago | (#17636896)

Overhead?

Re:Doesn't Make Sense to Me (5, Funny)

Anonymous Coward | more than 7 years ago | (#17636966)

Prolly because Apple users don't feel right (ie superior) if they don't pay 200% or more markup on something...

-Ac

Re:Doesn't Make Sense to Me (0)

castle (6163) | more than 7 years ago | (#17637062)

God, that comment was funny.

Oops, burned karma.

Re:Doesn't Make Sense to Me (2, Insightful)

creimer (824291) | more than 7 years ago | (#17637314)

I had the same thought when I heard the pricing on the iPhone and Apple TV.

Re:Doesn't Make Sense to Me (1)

xenocide2 (231786) | more than 7 years ago | (#17637232)

Or, why not value it at marginal cost, and give it to users for free and write it off under goodwill? I'm no accountant, but it smells like something fishy is going on. Charging 5 dollars for what amounts to a software upgrade puts a huge dent in adoption rates; are they perhaps worried that some of their other devices without 802.11n support will be hurt against competition that does support n?

Re:Doesn't Make Sense to Me (2, Interesting)

Kadin2048 (468275) | more than 7 years ago | (#17637438)

I think they realize that very few people are probably interested in 802.11n, because few have equipment to work with it. In any case, this functionality will almost certainly be included in the next major OS upgrade, so the market for this patch is a very small minority of Mac users, who aren't that huge a market to start off with. I think that's why it's not cheaper (like $1 or $0.01, as others have suggested). It's probably only going to be a few thousand copies that they move anyway, before the next big OS upgrade.

This whole thing looks more to me like Apple being "once bitten, twice shy" with regards to things that might possibly interest the FTC, rather than any big conspiracy.

Re:Doesn't Make Sense to Me (1)

gnasher719 (869701) | more than 7 years ago | (#17637718)

'' Or, why not value it at marginal cost, and give it to users for free and write it off under goodwill? I'm no accountant, but it smells like something fishy is going on. Charging 5 dollars for what amounts to a software upgrade puts a huge dent in adoption rates; are they perhaps worried that some of their other devices without 802.11n support will be hurt against competition that does support n? ''

I guess the whole thing sound ridiculous to you, as it does to me, and probably to Apple's accountants as well.

The problem is that the USA are full of ambulance-chasing lawyers, and if Apple did what appears the reasonable thing to do (free upgrade), then you can be guaranteed that someone would start a class action lawsuit against Apple.

Re:Doesn't Make Sense to Me (1)

99BottlesOfBeerInMyF (813746) | more than 7 years ago | (#17637646)

So why does it cost $4.99 for a feature which tas taken very little work to implement? OK, so it's fair that they're charging for it - if you believe their excuse, but why not $0.99 or $1?

I think most people are missing the point. I suspect it's not the software feature so much that users are paying for. Apple told users they were getting 802.11G cards and sold them as such. In reality, some were also capable of 802.11N. Since that feature was disabled, that was just fine, but if they're going to send out a software upgrade that unlocks a new hardware feature, they're suddenly running across some very gelatinous ground given our weird laws. I think the law specifies a minimum of $1 for such items, but I doubt it costs apple $4 for processing that dollar. More likely $5 is the price difference between an 802.11G and an 802.11G/N card.

Re:Doesn't Make Sense to Me (1)

UnknowingFool (672806) | more than 7 years ago | (#17637690)

OK, so it's fair that they're charging for it - if you believe their excuse, but why not $0.99 or $1?

It might have to do with spirit of the act. By charging anything Apple covers themselves with the letter of law but they have to charge something nominal in order to comply the spirit of the law. After all, what is the wholesale cost difference between a 802.11g card and a 802.11n card? Probably around $5.

Well understood (4, Insightful)

Space cowboy (13680) | more than 7 years ago | (#17636878)


I thought this was common knowledge - I've been arguing that the effects of Sarbanes-Oxley are detrimental for some time now.

The major problem is that it invites software companies (I'm not making any accusations here) to put out shoddy software, full of bugs and not-ready-for-primetime features, giving themselves the option to *not* charge for upgrades later, perhaps for business-reasons. Bugfixes, you see, are not subject to the S-O ruling. This is not the way I'd like to see the s/w industry go...

Simon.

Re:Well understood (2, Interesting)

mandelbr0t (1015855) | more than 7 years ago | (#17637124)

In the words of a SOX-IS Project Manager I once worked with, "Incompetence is an excuse." That certainly doesn't inspire any confidence in me that SOX-IS controls actually do anything useful.

mandelbr0t

Re:Well understood (1)

Foryst (870882) | more than 7 years ago | (#17637330)

So SOX stops OS X sockets, shocks /.ers?


On a less alliterative note, the Sarbanes-Oxley Act (SOX) seems to be one of those bills put into place to allow a fall back contingency for charging a corporation, or at least allowing investigatory subpeonas. Kind of like how they got Capone for tax evasion in the end. In today's age, does it really make sense to create laws like that targetting corporations that can afford to spend more on lawyers than the government who passes the bills in the first place?

the obvious fix (2, Insightful)

fishdan (569872) | more than 7 years ago | (#17636884)

Is for Apple to leak to a blogger a way to unlock the "feature"...

Oh, wait.... [theregister.co.uk]

And who's going to believe that? (2, Insightful)

OpenSourced (323149) | more than 7 years ago | (#17636890)

That's about the most lame excuse I've ever heard. What's with Microsoft updates? They also "complete" the product. What about free updates of all kind?

And even if they believe their own propaganda, why don't charge one dollar, or even one cent? The accounting principle wouldn't be broken.

Re:And who's going to believe that? (1, Troll)

feepness (543479) | more than 7 years ago | (#17637104)

And even if they believe their own propaganda, why don't charge one dollar, or even one cent? The accounting principle wouldn't be broken.

Right, so a company trying to cheat the law couldn't do the same thing? Accounting, in our Byzantine code, is as much about appearances as it is about figures.

I don't have a big opinion on this matter, but games like that get you in trouble.

Re:And who's going to believe that? (1)

feepness (543479) | more than 7 years ago | (#17637412)

Troll? WTH? Wow.

So does the law require them to charge $4.99? (0)

Anonymous Coward | more than 7 years ago | (#17636904)

If it's only the law they're trying to circumvent, why not charge $0.01?

Oh... Because it's not. Nevermind.

Re:So does the law require them to charge $4.99? (4, Insightful)

Ungrounded Lightning (62228) | more than 7 years ago | (#17637040)

Has to be at least $1.00. Probably costs 'em several dollars to handle the dollar...

Re:So does the law require them to charge $4.99? (2, Funny)

LunaticTippy (872397) | more than 7 years ago | (#17637132)

Wow, they're taking a huge loss on this whole iTMS thing aren't they?

Something is horribly wrong (1, Troll)

Bryansix (761547) | more than 7 years ago | (#17636914)

Talk about turning Sarbanes-Oxley on it's ear and using it as a scape goat for profit. What is Apple thinking? People are buying the product the way it ships. However they expect (and with good cause) that if a feature is in the product but not turned on that Apple should supply the update to allow that feature to be used. This has nothing to do with accounting and everything to do with politics and greed. Once again, short on Apple stock!

Re:Something is horribly wrong (1)

Goaway (82658) | more than 7 years ago | (#17637336)

However they expect (and with good cause) that if a feature is in the product but not turned on that Apple should supply the update to allow that feature to be used.

Said feature was never announced or advertised, so nobody would expect anything of the kind.

Service Packs? (1)

FormulaTroll (983794) | more than 7 years ago | (#17636918)

So will Apple start charging for service packs and security fixes as well? I read the article, and they try to differentiate between features and fixes, but when you're resorting to blaming SOX for this, and saying it's because you want to avoif the appearance of not having finished delivering the product, what's the difference between a security fix and a new feature?

Sorry I torrented it, Blame copyright law! (1)

Lumpy (12016) | more than 7 years ago | (#17636924)

I was forced by copyright law cop out to post it on pirate bay. I had to the copyright laws made me do it!

What did you expect from Apple? (0, Troll)

Rupan (723469) | more than 7 years ago | (#17636928)

Apple stole the BSD Mach kernel to build OS X. They regularly fuck their own developers (anyone remember how Apple took possession of that freeware utility that one of their developers wrote IN HIS OWN TIME?) and customers. I know this opinion isn't popular and that there are hundreds of Mac fanboys who read slashdot. But what did you really expect?

Does anyone remember how Steve renigged on his promise that iTunes content is the property of the purchaser, and that songs purchased from iTunes belonged to the person doing the purchasing? How about when the closed the kernel source code?

Apple is in the same league as Microsoft. Is it really news that they are fucking over their own customers... again?

Why does it matter? (1)

Prysorra (1040518) | more than 7 years ago | (#17636932)

The company has every right to decide to charge money for a service. Even if it "should" be free. It seems like they want to paint themselves victims of Sarbanes-Oxley. Perhaps they want to win some sympathy points from the customers?

Re:Why does it matter? (1)

pla (258480) | more than 7 years ago | (#17637610)

The company has every right to decide to charge money for a service.

100% true - But they should have the balls to come out and say so, not hide behind a totally unrelated law that even the experts disagree on its exactly implications.



Perhaps they want to win some sympathy points from the customers?

<cough>Market share<cough>

It's not an incomplete product (1)

reldruH (956292) | more than 7 years ago | (#17636950)

I don't know whether regulation is good or bad but this seems a bit excessive. An unfinished product isn't being delivered. What if I wrote and started selling a program that had a feature commented out, then later decided to uncomment it? Would I not be able to claim that I'd made money for the program? It's a bad example, but you get the idea. There's something very nonsensical going on with this.

They should have simply shipped a broken driver (0)

Anonymous Coward | more than 7 years ago | (#17636962)

Then they could have fixed it in an update and followed the letter of the law.

They probably could have even stated in the product documentation that that feature was still in beta and "might" not work properly.

Re:They should have simply shipped a broken driver (0, Troll)

nonsequitor (893813) | more than 7 years ago | (#17637546)

Yeah, because shipping broken drivers gets much better press than charging for features not originally advertised.

Paper thin... (1, Insightful)

Anonymous Coward | more than 7 years ago | (#17636964)

This explanation only makes sense if you consider the product "not delivered" until the last features are added. This makes no sense whatsoever, because it's not like people are saying, okay, I'm buying this Apple product, but my contract with them says that I get my money back if they don't add features x, y, and z. That would be what should cause an accounting department worry. Looks here like Apple just found a flimsy accounting excuse for trying to collect more money, and ran with it. Given all the negative media attention they are gathering recently, you have to wonder about this sort of thing.

Why 5 clams? (0)

Anonymous Coward | more than 7 years ago | (#17636978)

I admit knowing next to nothing about SOX - or accounting. Is there a reason they chose $5? Why not charge a few cents (via iTunes or something) just to cover the credit card processing fees and post a cent profit per transaction?

What I don't understand is ... (1)

rahuja (751005) | more than 7 years ago | (#17636980)

... why this feature was not provided in the first place, and what really stops them from providing a "feature" for a lower price. I mean, if they now unlock it, providing 802.11n (draft) for the price of 802.11g, where does the unaccounted-for "revenue" come into picture? I'm by no means an expert on SOX or accounting, but I somehow feel this is not the real reason.

Re:What I don't understand is ... (1)

UnknowingFool (672806) | more than 7 years ago | (#17637536)

why this feature was not provided in the first place

802.11n was still in draft. The standard still has not been fully approved although a number of companies have created products based on it. From what I understand the version in the Macs were draft2. So if you're Apple do you advertise that your hardware uses it and take a gamble that it won't be revised later creating incompatibility? Or do you go with the safe route by implementing but only releasing it to be used for 802.11g?

Why is it being updated now? I think the standard is being approved this month so Apple's product will be compatible.

providing 802.11n (draft) for the price of 802.11g, where does the unaccounted-for "revenue" come into picture?

I'm guessing some accountant took into account hardware cost and support cost differentials and computed the $5 difference.

How long before this *update* gets torrented? (1)

LuxMaker (996734) | more than 7 years ago | (#17636986)

n/t

Hardware vs. software? (1)

plopez (54068) | more than 7 years ago | (#17637014)

Another poster made the point about SW being exempt. But is this a hardware fix, e.g. flashing the firmware? Does this cause it to fall in a different category? Or is it in a grey area which could cause ppl. to CYA? Why can't it be shipped fully functional?

Simple. That's not a feature... (0)

Anonymous Coward | more than 7 years ago | (#17637042)

It's a bug!

I have doubts... (1)

prichardson (603676) | more than 7 years ago | (#17637074)

If that were the case, wouldn't Apple just charge some symbolic amount? Perhaps $1? On the other hand, Apple can't possibly be making very much money off of this, and it's not like they're hurting for cash.

Further, I would think that Sarbanes-Oxley would include a provision for things like hardware that could be updated through software. Other people have pointed out that software is updated all the time with added features for free. This does seem different to me though; Apple is adding a hardware feature, even though they're doing it without any physical modification to the device. What about when some iPods were suddenly able to do voice recording through a firmware update? I think that would fall into the same situation.

Regardless, I expect this patch to show up on the torrent networks within hours of its release. I also expect a lot of people to try installing it on older hardware, just to see if it works.

Hiding behind legislation (1)

Alioth (221270) | more than 7 years ago | (#17637088)

It sounds like Apple are hiding behind this legislation, in much the way government departments in the UK when criticised hide behind the Data Protection Act, giving the DPA ungodly powers it doesn't actually have - but no one knows better. This smells awfully similar.

Sounds like a good deal... (1, Insightful)

oskay (932940) | more than 7 years ago | (#17637094)

I have a first-rev MacBook Pro with the Core (1) Duo. I *wish* I could upgrade from g to n for only $5!

Re:Sounds like a good deal... (1)

soft_guy (534437) | more than 7 years ago | (#17637218)

I have a first-rev MacBook Pro with the Core (1) Duo. I *wish* I could upgrade from g to n for only $5!
I had just received my Core 2 Duo MacBook Pro when this news broke a few days ago. Woo hoo!

Not quite... (1)

gsn (989808) | more than 7 years ago | (#17637162)

Apple *could* charge you nothing and give you new functionality - they just have to go through a mountain of paper work to do it. By charging you they are saving money by not doing said mountain and making money of you. They could have charged you a cent or something I guess they want some beer money. Rotten Apple.

Upselling features (scum marketing) (2, Interesting)

gd23ka (324741) | more than 7 years ago | (#17637230)

Microsoft started it with their "Vista" XP-successor where you can
"upgrade" to "Premium" or "Ultimate" versions with your credit card,
how long before Apple turns around and says

"I see you are trying to use your bluetooth adapter. For a one-time use
feature please authorize a $2.99 charge to your credit card. If you want to
use this feature for longer periods of time the following plans are
available: 2 weeks of operation $8.99, 4 weeks of operation $14.99.
Time limited options extend automatically with recurring charges to your
credit card. Unlimited feature activation $49.99 one time charge."

In related news, Linux is still free (0, Troll)

ewg (158266) | more than 7 years ago | (#17637234)

In related news, Linux and BSD are still free.

In further related news... (0)

Anonymous Coward | more than 7 years ago | (#17637482)

...for the common sense impaired, the hardware needed to run Linux/BSD still isn't free.

No big deal (1)

Drakin020 (980931) | more than 7 years ago | (#17637240)

People who are gungho about moving to 802.11n are not your run of the mill typical home PC user. There going to be people who know how to pirate. No problem here.

It's a software update, pay if you want (1)

steve_bryan (2671) | more than 7 years ago | (#17637254)

If the $5 charge is too aggravating don't you suppose it might be possible to get a free copy without too much effort? Just think of it as conscientious objection to Sarbanes-Oxley regulation. Apple seems to be saying they would rather not charge you so do them a favor and comply with their wishes.

The place where this might get more aggravating is when it is applied to the minor system software updates, e.g. 10.4.7 -> 10.4.8. In the past such updates could include changes that go beyond just bug fixes.

Link Please... (5, Insightful)

nonsequitor (893813) | more than 7 years ago | (#17637352)

Can someone please post the link to where I buy the unlocking software? After spending $3K on my C2D MacBook Pro, you really think I care about paying another $5?

Sure it could have been a penny, but that may have been construed as trying to sell the feature for less than market value. I'm not an accountant, but I know that you can get in trouble for stock options granted at less than estimated market value for a private (unlisted) company, therefore you have the pick the lowest number that can be seen as a reasonable value. I was lucky to get my shares at $0.02 a piece since when I was granted the options the startup company I started working at had yet to make their first sale. A year later they had to grant options at $0.50 and up.

In all honesty $5 is cheap for a draft-N card. Consider the alternative of buying a PCMCIA Wireless N card and tell me its not a deal?

Web services (1)

pmontra (738736) | more than 7 years ago | (#17637354)

So, if a web service (let's say Flickr) adds a new feature to its paying customers (let's say convert pics to grayscale), they have to charge extra money for it? I'm not saying that this is the end of the Web as we know it, but it would be quite a revolution and quite an advantage for non-US services.

How Very Cellphone of Them (0)

ewhac (5844) | more than 7 years ago | (#17637408)

I thought Apple had partnered with Cingular, not Verizon.

Nickel and diming for stuff that should already be there. It seems that dancing with a US cell network provider did more damage to Apple's worldview than initially suspected :-).

Schwab

if this applies to a patch, what about recalls (-1, Troll)

Anonymous Coward | more than 7 years ago | (#17637420)

So if my car has a faulty part upon sale, I should have to pay to have it fixed? We buy cars and producs assuming they work the way they should, and if they don't, we expect them to be fixed for free cause we've already paid for it.

That's the SEC (4, Informative)

toonerh (518351) | more than 7 years ago | (#17637506)

Even before Sarbanes-Oxley (e.g. in the mid-1990's) ethical, conservative CFO's [admitted a rare breed] were very careful about "recognizing revenue" for a product when a newer or better version was in the works. Our "head up the ass" Congress passed Sarbanes-Oxley and now companies have hire many more lawyers to cover their asses. Lots of companies in Apple's situation would simply do NOTHING - no charge, no upgrade: WYSIWYG hardware. Is that in the consumer's best interest? I think not!

Mod parent up. The accounting rules do harm users (0)

Anonymous Coward | more than 7 years ago | (#17637714)

Indeed. In my last job at a software company we went through the same issue - we couldn't improve our product during patches; and had to hold them off for paid-for-releases even when we wanted to make our customers happy.

Same stupid revenue recognision rules prevented customer support from having easy ways of troubleshooting ("If you're having trouble with version 2.0 on your old laptop, here's a key for 5.0. Sorry for the trouble we caused you.)

Bottom line - if you want to make your customers happy, don't incorporate in the US - and certainly don't go public; where the laws pretty much make you screw your customers.

now that the peanut gallery has commented... (1)

vykor (700819) | more than 7 years ago | (#17637538)

Can we get an actual expert or SOX consultant to comment on this interpretation of accounting law (and not random geeks talking out their asses)? From what I've seen second-hand regarding SOX-compliance work, especialy where IT intersected with finance and accounting, I get the impression that there can be apparently unrelated consequences and complications arising from SOX. Rules for apparently simple things like revenue recognition are probably less cut-and-dry than you'd expect. All the enterprise budgets allocated to paying SOX consultants must be for something...

Re:now that the peanut gallery has commented... (1, Funny)

Anonymous Coward | more than 7 years ago | (#17637786)

Can we get an actual expert or SOX consultant to comment on this interpretation of accounting law (and not random geeks talking out their asses)?
Yes.

But not on Slashdot.

This is not correct (1)

NovaSupreme (996633) | more than 7 years ago | (#17637540)

IANAL but this doesnt seem correct.

What they are saying can only be true if its proved that they used 802.11n as a product, something that caused people to buy more Mac than they would have otherwise bought. If they didnt advertise for .11n, didnt list it as top feature, or if people expected it anyway, what they are saying is BS.

Oh, poo on that... (3, Interesting)

fudgefactor7 (581449) | more than 7 years ago | (#17637576)

Here's how Apple can get around SOX: Put the update on their site, list it as BETA, let anyone register to be a "Beta Tester" for the application, they have to agree that this is a Beta, and you have to uninstall the product when the final implimentation comes out...kind of like what MS does...then let people have the file. Or they can charge you $4.99 for it, but give you a special once-only keycode that's worth $4.99 off any purchase. Result: a wash, accounting-wise. No odd accounting practices, no shuffling of cards, just people getting the app.
 
It's funny how BIOS updates and other drivers aren't seemingly worried about SOX...or how Microsoft Update isn't either...

Has Apple already claimed the revenue? (1)

fluffy99 (870997) | more than 7 years ago | (#17637592)

I'm wondering if Apple didn't get dinged for claiming revenue from the upgrade and now they are being backed into a corner and forced to charge for the upgrade?

To be fair... (4, Insightful)

SnowDog74 (745848) | more than 7 years ago | (#17637612)

802.11n was never advertised openly and originally as part of the capabilities of the products in question. For that matter, Quicktime Pro's feature sets are not advertised as part of standard Quicktime... but you don't see anyone complaining that users have to pay a license fee to unlock the Quicktime Pro bundle of features that already exist on your Mac in a disabled state.

For that matter, the same can be said of many different types of software. If you get a digital converter box from your cable company, by virtue of having the box you aren't granted access to every channel the box can theoretically decode.

Re:To be fair... (1)

SnowDog74 (745848) | more than 7 years ago | (#17637638)

"the same can be said of many different types of software" ... and hardware, I meant to say.

Corporate Debian users (1)

wiredlogic (135348) | more than 7 years ago | (#17637666)

So how much should a company report for performing 'apt-get update' on its servers?

maybe this "fee" will be included in 10.5 (0)

Anonymous Coward | more than 7 years ago | (#17637754)

maybe this "fee" will be included in 10.5

Back in the days (1)

Nom du Keyboard (633989) | more than 7 years ago | (#17637762)

Back in the days when a KiloByte was considered a lot of memory, IBM, CDC, and other manufacturers used to ship mainframes with memory, virtual memory hardware, and sometimes higher speed clock options, installed, but disabled. Contract to the higher lease rates and the technician would appear with a wire-wrap gun and "move a wire" to "install" (nee enable) the additional capabilities. Those were days when the profit margins made it worthwhile to sell, but prevent use of, features until they were paid for. So how is Apple different than just doing business the usual way of the last .5 century?

Same where I work (0)

Anonymous Coward | more than 7 years ago | (#17637764)

Where I work (one of the top 10 largest software companies) they take this *very* seriously, doing the same thing for upgrades, etc. (or more often avoiding upgrades because of the headaches this causes).

This is nothing new. But I've wondered for a while why Apple never seemed to follow it - until now I guess. Which is nice - more of a level playing field.

---
I type this every time.
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