Slashdot Mirror
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?
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.
Visit Jonesblog and say hello.
Prolly because Apple users don't feel right (ie superior) if they don't pay 200% or more markup on something...
-Ac
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.
Microsoft add new features too. The security centre & windows firewall for one example.
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.
-- 3 events that reshaped the world in the 20th century: WW1, WW2, and WWW
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.
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
Software products are advertised for their core functionality. They're intended to be fluid products, and accounting doesn't care what features are added or removed in software, as long as Photoshop stays an image editor and Dreamweaver stays a web content editor, the rules are met.
Not the same with hardware. Any material change in the product has to be accounted for. If Apple already filed its disclosure statements indicating that its products had b/g wireless chipsets in it (which it would have), it can't go back and change that later and say "oops actually it's 802.11n." Doing so would be a "material misstatement" punishable by the PCAOB under Sarbanes-Oxley. By charging for the 'upgrade' they can file current accounting documents saying that the products were upgraded with new functionality.
... enables dormant hardware that isn't being charged for in the purchase of the product.
Yes it is. If you bought the hardware you paid for everything. There are no 'free parts' - all the components are part of a whole. The fact that something isn't enabled is completely irrelevant - you were charged for it and paid for it.
What happens if we apply this thinking to patches? Oh I'm sorry - we fixed that last exploit with a new version of Safari that adds xxxxx feature, but because it wasn't there when we sold you the computer, we are going to have to charge you.
This is nothing more than fleecing users for cash.
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.