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Apple Charges For 802.11n, Blames Accounting Law
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."
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?
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.
Physicists get Hadrons!
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.
Has to be at least $1.00. Probably costs 'em several dollars to handle the dollar...
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
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?
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.
Engineering is the art of compromise.
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.
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.
You know what doesn't make sense to ME? It is that everyone on Slashdot seems to be assuming that this is real when in fact it comes from some guy's blog and he's reporting it as something that someone said on the floor at MacWorld.
I think I'll wait until Apple actually announces this before I even think about reacting to it one way or the other.
Avoid Missing Ball for High Score
'' 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, ... ''
I could imagine that Sarbanes-Oxley is very sensitive about any attempts to get around it.
Please note that while iLounge's article is interesting, it's based on two unnamed Apple representatives, quoted without their position at the company being mentioned. This is fine, but let's not take this as an official Apple position or statement. I'm a regular print and online journalist, so I asked Apple about the $5 charge. They said they don't comment on rumors and speculation, and repeated that the updater would be available on the CD with the new AirPort Extreme update that will ship in February. To me, that's like saying, "hint, hint." The CD will have an unlocked updater that can be used with any compatible Core 2 Duo or Xeon Macintosh. Thus, Apple may or may not have a Sarbanes-Oxley issue (stranger things have happened), and they may or may not charge $5 for the updater. Nonetheless, an unlocked "enabler" application will be in the hands of thousands of early purchasers (like myself). I've written more about this on my Wi-Fi blog in a post about why I think the $5 charge is unlikely, but unnecessary for anyone to pay even if it's attempted to be levied.
Freelance tech journalist for the Economist, MIT Technology Review, Macworld, and others
It's NOT a simple upgrade to a driver. It adds an entirely new function to the device on a new protocol not interoperable with other equipment. Enabling it is a simple firmware update, but it is a material change to a shipping product.
It's not about free patches being illegal, it's about Apple not reporting its hardware properly. You can't make a substantive, material change. From the perspective of government oversight, the products Apple has been shipping did NOT have n-capable hardware. Now they do, but you can't go back and re-file the paperwork. You have to report the upgrade in accounting filings, and you can't report something in your accounting files that doesn't cost anything. With the company being under investigation for its accounting practices, it's best not to take any risks at all while under the probe.
If federal regulators respond to the story and say "Apple can ship this update for free without worrying about legal implications" you can bet your ass that the $4.99 fee will be dropped. Like they want to deal with handling a bunch of $5 transactions and shipping out physical CDs instead of pushing a software update.
In 10.4.8 update, Apple added EAP-FAST wireless authentication. That 'feature' was not present when many people 'entered into their contract of sale willingly' with their Macs. Are you saying that all of those people should now be charged for this and any other additional features because it was not there originally?
Stop apologising for Apple.
Another example. I want to buy an Audi. I was reading a brochure on it. It tells me that the car is capable of 151mph. It has an asterisk saying "* electronically limited to 130mph in US and Canada". Now, I'm not sure on the inherent legality thereof, but you can bet if I wanted to remove that limiter and took it to my Audi dealer to do so, and they wanted to charge me anything /beyond/ the labor for removing said limiter, I'd be mad as hell.
Now, you might point to that 'labor' word and say "well, there /is/ labor, and that's what you're being charged for"... I don't buy that. You'd better believe that that wireless card was supplied with a skeletal driver for (a?)/b/g/n, not (a?)/b/g only.
Apple just found a way to double charge you for the same thing, and apologists like you are defending them.
Say ATI sells you a new PCIe card. You know through various channels that this card is PCIe. But guess what, it only runs at PCI speeds, and guess what, "$5 gets you the 'upgrade' to use PCIe" - people, here on Slashdot and elsewhere would be screaming bloody murder, diseminating this patch left right and center, and wailing the house down, and you know they would (and rightly so) - but here's yet another free pass for Apple from the "loyal following".
It is VERY different. Microsoft is baaad. Apple is gooood.