“Apple on Thursday confirmed reports that it plans to charge customers a fee to download software that will enable the 802.11n capability in the Wi-Fi chips found in some MacBook and MacBook Pro systems. But it won’t cost $5, as many reports indicated. It will cost $1.99, and will be available on Apple’s Web site, said Lynn Fox, an Apple spokeswoman,” Tom Krazit reports for CNET News.
“Every Mac with Intel’s Core 2 Duo or Xeon processor has the 802.11n chip, except for the 17-inch iMac with the 1.83GHz Core 2 Duo chip, Apple announced last week at Macworld. Customers who purchase the new $179 Airport Extreme Base Station also unveiled at Macworld will get the software for free,” Krazit reports.
Krazit reports, “‘The nominal distribution fee for the 802.11n software is required in order for Apple to comply with generally accepted accounting principles for revenue recognition, which generally require that we charge for significant feature enhancements, such as 802.11n, when added to previously purchased products,’ Fox said in a statement.”
Full article here.
Related articles:
Apple to impose 802.11n ‘unlocking fee’ on Intel Mac owners – January 16, 2007
Apple’s new AirPort Extreme ‘AirPort Disk’ feature: cheap, simple network storage for home networks – January 15, 2007
Apple’s new AirPort Extreme supports 802.11n, enables wireless streaming of HD media – January 10, 2007
Apple introduces new AirPort Extreme with 802.11n – January 09, 2007
This is actually pretty funny.
Management didn’t seem to pay much attention to Generally Accepted Accounting Standards requiring the expensing of stock options and the importance of grant dates.
OUTRAGEOUS ! ! !
The explanation is pure poppycock. It’s an inexplicable inconvenience to both Apple and its customers. There is no difference between this piece of software and an update to the security aspect of the OS or a minor update to the software itself, as in 10.4.9.
Next, the communications staff wouldn’t know an accounting principle if it hit them in the face.
What’s the real story?
I have a new base station on order and no computers (yet) to move up to n, so I’m going to get the software that I can’t use. does that require an accounting entry to credit me $1.99?
Surely the people who buy n capability in their new computers are going to pay less than the people that already bought one in the full expectation that the software to make use of the computers was already paid for by virtue of their purhase.
Or is it just that Apple is running scared of the latest persecution by the next DA?
Tell me if I’m wrong and tell me why.
Uhh, critic, management was VERY concerned with regard to the stock options which is why Apple announced the backdating had occurred ITSELF. No one ratted them out. Apple discovered the backdating on its own, hired an independent investigating team, and that resulted in the resignation of a board member and an Apple attorney, and the firing of another.
In other words, Apple clearly recognized that something that shouldn’t have happened did happen, and took actions to correct it (recently announcing an $84 million expense to account for the backdating). Sorry to disappoint you, but that behavior is quite different from the actions of other Silicon Valley companies, which went to great lengths to hide their own stock option backdating, and were only found out through SEC investigations.
$2? Nuthin’. I was fearing that Apple was going to charge something substantial like $20-30.
its 2 dollars not 20…
when you bought the machine you thought it was G…
now for 2 bucks you can make in an N..
without even opening it up or taking it anywhere…
u people need to get a life!
Like the Boston Tea Party, I’ll pay $1.99 to unlock N from Apple LONG BEFORE I’ll pay 79, um, “units” to buy anything from Microsoft.
The explanation may sound like poppycock, but that’s the reality. You wan the real story?
The real story is that with the SEC and the U.S. attorney’s office breathing down Apple’s neck as a result of the backdating scandal (Apple’s internal investigation cleared them of wrongdoing, but the SEC hasn’t made a decision yet), Apple is being extra careful to stick to the letter of the law. And sticking to the letter of the law means being anal about things like this.
That is, Apple wants to do everything right now to avoid even the appearance of impropriety in terms of accounting.
If you want a good explanation about the SOX implications, head over to the thread at Macrumors.com
http://forums.macrumors.com/showthread.php?t=271382
BTW, there are better things to complain about than $2 for this one-time upgrade.
And for all the whiners who think this is about principle, I think it clearly would have been better for you if Apple had just shipped straight-up 802.11b/g cards in the Core2 Duo Macs and then charged you $50 or $100 to ship you new 802.11b/g/n cards that you had to physically swap into the machine. Then again, some people never seem to be happy.
This law is outrageous! If prevents Apple from adding ANY new features to their software via the “Software Update” feature. It’s an accounting headache for Apple and bad news for us customers.
I hope someone finds a loophole in this law soon.
Be thankful Apple was forward-thinking to future-proof your computer. How happy would you be if your computer really did have 802.11g in it, and it would cost $99 to upgrade to N?
A security update does not add features. A minor update may enhance functionality, but it probably does not add new features. At least not significant ones.
Apple advertised and sold the relevant Macs as having 802.11g, probably because they were not sure if the final “n” standard would be compatible with the hardware they already sold. Now that Apple has products that the higher speed wireless will work with (the new Airport Basestation and Apple TV), whether it is ultimately “n” compatible or not, they can enable the new feature to work with Apple’s new products without promising it will be compatible with the final “n” standard. That’s why it is included free with the new “n” products; it is equivalent to a “driver” that makes a new peripheral work with an existing product.
I’m not sure when this new law went into effect, but I’m sure Apple is being more careful about accounting. And it probably costs more than $1.99 in credit card fees and administration costs for Apple to implement this feature.
$2 bucks, who cares. I am glad Apple thought ahead and put it in there.
That’s funny.
According to Apple, GAAP requires a $1.99 download fee for a driver tweak.
Yet, OS 10.4.9 will be free.
I hope they don’t apply the GAAP reasoning for future updates beyond the 802.11n driver tweak.
This has to do with the SOX act and ONLY applies to selling a product and later delivering added functionality.
bug fixes and other “software update” stuff do not apply. Those are not “significant” and were know to you when you originally purchased.
This is something that was not part of the purchase and is significant. They cannot account for the price of your macbook pro (or a percentage of it) untill it is fully delivered to you. so they charge a nominal fee to “realize” income on the books for delivered product.
There really are better explainations for this, but this really is at the root of public companies and accounting. And that the products (MBP and the enable software) were delivered in different fiscal quarters.
You will not be getting charged $1.99 for “software update” stuff, those are just fixes for things you already paid for and were delivered.
For some frame of reference: way back in the day we “upgraded” our WANG disk drive from 15 megabytes to 45 megabytes by paying WANG a few thousand dollard to send a guy out for the “upgrade”. Years later a former WANG guy working for himself spilled the beans – he opened the side of the (washing machine sized) drive and flipped one jumper switch on the main board from off to on. Technicians were instructed to open the machine, spread a lot of parts around, take a smoke break, and button it back up after 30 minutes or so. Nothing new under the sun.
MDN word: near, as in $1.99 is near zero in the grand scheme of things
That’ll be the best $2.00 I’ll spend this week, last week the best $2.00 that I spent went for a lemon slurpee.
>Yet, OS 10.4.9 will be free.
I meant the OS 10.4.9 update will be free… or will it?
Steve (near the bottom of the page and again on page 3) has a great explaination for this issue.
http://backstage.ilounge.com/index.php/backstage/comments/9316/
The Other Steve,
That’s not true. Software Update doesn’t add new hardware features. This patch does.
But wait a tic – isn’t Apple supposed to be evil? $1.99? They were supposed to charge $20 so my presuppositions about the company would hold true!!!
The interpretation of this law is complete bull – the capability can only be used with an 802.11n router sold by Apple or someone else. The functionality unless there is functionality provided by the router. THAT is charged for.
In addition, I presume Apple will start selling macBooks with the functionality turned on. Are they going to charge $2 more for the new laptops ? I doubt it.
By the same twisted logic, one could argue that providing an upgrade to iTunes for free and so allowing a user to listen to podcasts on a laptop increased its functionality. Why not charge for that ?
If this truly is the interpretation by Apple’s SOX folks then they’re not interpreting the law correctly.
When you buy the MacOS, you are paying for the ability to use Software Update. When you buy a Mac with an 802.11g card, you are buying…A Mac with an 802.11g card. A firmware update (which is what I assume this is) that makes it 802.11n is quite different. It’s not part of the OS and it was not anything you were expecting to be entitled to when you bought the machine. I don’t necessarily think that’s a great explanation, but it makes sense to me. 802.11n is next-generation technology, and while a few Boot Camp users did realize by looking at Windows XP’s Device Manager that this was a pre-N chipset, Apple never represented it as such and it was quite possible that Apple would find out when N really did come out that their chipset was flawed. In which case, they would not offer this firmware patch.
If this truly is the interpretation by Apple’s SOX folks then they’re not interpreting the law correctly.
Are you an expert or a CPA?
In addition, I presume Apple will start selling macBooks with the functionality turned on. Are they going to charge $2 more for the new laptops ? I doubt it.
The revenue of the MacBooks to e sold in the future has not yet been recorded and recognized in the financial statements. Whatever functionality Apple will deliver in the future product has nothing to do with SOx. Duh!
The interpretation of this law is complete bull – the capability can only be used with an 802.11n router sold by Apple or someone else. The functionality unless there is functionality provided by the router. THAT is charged for.
What is charged for is the functionality of the router. Not the funtionality of the hardware contained in the MacBook. Furthermore, it was advertised as 802.11 b/g capable and charged as such. No draft-n capability is mentioned in the ad/brochures.
this is about accounting practices, not added functionality.
Apple wanted to post the full $2000 of your MBP to its books the day it sold it to you. Not post $1900 (estimating a typical $100 price of a wireless card) on the day you bought it, and then post $100 revenue when they ship you the enabling software.
ESPECIALLY if the postings cross over different fiscal periods.
If they DO post all $2000 then deliver the software in the next quarter. They would be backdateing the revenue of the 802.11n portion.
“Uhh, critic, management was VERY concerned with regard to the stock options which is why Apple announced the backdating had occurred ITSELF. No one ratted them out. Apple discovered the backdating on its own, hired an independent investigating team, and that resulted in the resignation of a board member and an Apple attorney, and the firing of another.
In other words, Apple clearly recognized that something that shouldn’t have happened did happen, and took actions to correct it (recently announcing an $84 million expense to account for the backdating). Sorry to disappoint you, but that behavior is quite different from the actions of other Silicon Valley companies, which went to great lengths to hide their own stock option backdating, and were only found out through SEC investigations.”
Uhh, I am a big Apple supporter (and shareholder), but I really don’t believe that Apple would have come forward with the options issue if the SEC and Federal prosecutors hadn’t become involved with backdating cases.
Also, Apple was the most visible company that was fighting the change in accounting rules three years ago to implement the rule that now forces public companies to expense options when they are granted. Before, they could bury the number in the footnotes to their financial statements. Now, they have to expense it on their income statement.