p2pnet - rss feed: Apple’s $2 accounting problem
p2pnet.net News:- If you own one of “most” Intel Core 2 Duo- and Xeon-based iMac, Mac Pro, MacBook, and MacBook Pro computers, you’ll have to pay Apple two bucks if you want to enable their 802.11n wireless functionality.
“Last week, when Apple announced its new AirPort Extreme wireless base station, it said the software would be included with the $179 device,” says eeTimes, quoting Apple spokeswoman Teresa Brewer as saying:
“For those customers who wish to enable their 802.11n functionality but do not wish to buy a new Airport Extreme base station, we are making the software available for download from the Apple Online Store.”
“Making available” means “selling”.
Another Apple spokeswoman, this time Lynn Fox, told CNET News, “Now that the draft specification is complete, we are ready to distribute the software to make the 802.11n hardware in these Macs come to life.”
BUT because Apple has already pulled in “all the revenue from the sales of those computers, it has to now charge customers at least a nominal fee in order to establish the value of its software upgrade and satisfy an obscure accounting regulation known as SOP 97-2,” says Fox.
In other words You, not Apple, must satisfy the obscure regulation, which apparently wasn’t met in the first place because Apple was in a hurry to get the product onto the shelves so it could get your money into its pocket.
“Apple didn’t have to do it this way, say accounting experts,” according to CNET, “But the company most likely faced difficult choices in relation to the upgrade: It could have held off on shipping the new Macs until the upgrade software was ready. It could have skipped the 802.11n capabilities altogether. Or it could have deferred revenue from the new Macs until the software was ready - all unlikely and unpalatable [for Apple] options.
So you have to come up with a “nominal” $2 to help out.
Yesterday, it was revealed Apple is making a gross margin of 50% on its much-touted (by the mainstream media) iPhone.
It’d be interesting to know what it makes on the Intel Macs. It could perhaps ease $2 for each sale out of that.
But don’t hold your breath.
Also See:
eeTimes - Apple confirms 802.11n download fee, January 19, 2007
CNET News - Apple’s 802.11n accounting conundrum, January 19, 2007
gross margin of 50% - iPhone 50% gross margin, January 19, 2007
Want to subscribe to p2pnet by email with Feedburner? Just click here.
rss feed: http://p2pnet.net/p2p.rss | | Mobile - http://p2pnet.net/index-wml.php | | And use our own p2pnet newsfeeds for your site
If your Net access is blocked by government restrictions, try Psiphon from the Citizen Lab at the University of Toronto’s Munk Centre for International Studies. Go here for the official download, here for the p2pnet download, and here for details. And if you’re Chinese and you’re looking for a way to access independent Internet news sources, try Freegate, the DIT program written to help Chinese citizens circumvent web site blocking outside of China. Download it here.
January 20th, 2007 at 5:05 pm
Trashing Apple for releasing a new product rather than waiting — what crap.
“Apple was in a hurry to get the product onto the shelves so it could get your money into its pocket.”
I’d rather get a new product if I’m going to buy something rather than buy an older product and a short while later find out that a newer product has replaced it but I could have gotten the new product, even if I would later need to upgrade software a short while later to take advantage of a newer technology and had to pay a few dollars for the upgrade.
Whoever wrote this is a jerkalist, not a journalist.
(and why do these asswipe forums post anonymous as coward? what a bunch of dikheads, just cause I don’t want to bother with “joining” their pathetic website?)
January 20th, 2007 at 6:41 pm
A jerkalist? You’re the jerk. If the hardware is there, why doesn’t apple just send the update as a patch? Because they are a greedy money grubbing company that want’s to get into everyone’s wallet. That’s why.
Apple should have to cover the cost, not the customer. This is a minor update for added functionality. I don;t see Microsoft doing this on their Windows platform. Mircosoft charges you to upgrade windows versions, not for patches and updates.
Good job Apple, you just screwed over your user base for 2$. Glad I don’t own a Mac. What a joke.
January 20th, 2007 at 6:48 pm
Totally agree. What a assholistic point of view.
I can’t make it all these Winfanboys and Gates/Balmer acolytes spinning every possible news to bash Apple.
So Apple is mandated by law to charge for the additional feature (in that not ready at time of sale of the laptop, hence not contractual), Apple decides to anyway sell the machines ready to go with the new wireless protocol when possible instead of deceiving customers in the future (Sorry, your MacBook Pro, just one month old, cannot go with the new standard) and this jerkalist complains “Apple was in a hurry to get the product on the shelves and get your money”
He certainly likes Microsoft promising bells and whistle for Vista and selling a crappy Windows XP SP4 with eye candies in place.
What a lobster: head full of shit and tail full of meat.
January 20th, 2007 at 6:52 pm
What are you smoking? If Apple does not charge Uncle Sam goes after every and each but of every and each Apple employee.
Complain with Bush, moron. It is the law that FORCES Apple not to release a new feature for free.
Greedy? $1.99? Yeah, very greedy.
Apple CANNOT cover the cost by law. Read the norm.
PS
Microsoft is not going to add the new norm to computers for YEARS.
What an asshole: you deserve Windows.
January 20th, 2007 at 7:02 pm
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.
There was no fully established “n” standard at that time, so Apple could not guarantee their hardware would ultimately work with the future “n” standard. I don’t think the “n” standard has still been finalized, but Apple can guarantee that the hardware will work with the new Apple products (Airport Basestation and Apple TV). Therefore, it is being enabled as new functionality. And the SOX requires that new functionality has to be charged.
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.
These days Apple is under scrutiny for accounting (stock backdating, for which Microsoft was fined in 1999). You may bet they will stick to the letter of any possible existing regulation these days.
If Apple was Microsoft everything would have been kept secret and one day there would have been a $50 enabler for 802.11n with much fanfare and Winfanboys would have drooled “Look, Microsoft innovates faster than anyone”
“Look, they are not greedy: usually one should buy a new computer for such MAJOR improvements”.
Keep sucking from Redmond. It suits you fully.
January 20th, 2007 at 7:38 pm
You know what? It’s amazing how much time is spent on an article to complain about $2. Yeah, yeah, it’s the “principle of the thing.” I would suggest to not get your energy all hyped up over $2. Relax about this issue, because there are more things to get upset over. If you get upset about every issue, you could ulcers.
January 20th, 2007 at 7:39 pm
– It’d be interesting to know what it makes on the Intel Macs.
It is public. Go and educate yourself.
January 20th, 2007 at 7:45 pm
Apple leads as usual. There is NO single router than Apple Airport Express ones to support the ‘n’ standard. Those who get one have the corresponding sw to activate the functionality on their Macs included. No additional fee.
In order to *having* to pay the $2 a Mac user (sorry Winwhiners, you are still out of luck on this one. Try next year, will’ya) should have access to a ‘n’ network, which does not exist but from Apple wireless router, just having the functionality activated gives you zilch on a ‘g’ network, pretty useless.
‘n’ will be mostly with home and small business users who will then be able to activate all their Macs for free. Pretty a worthless issue: exactly worth for professional baseless bashers.
January 20th, 2007 at 7:52 pm
before spouting crap online
http://en.wikipedia.org/wiki/Sarbanes-Oxley_Act
although I doubt you’ll make anything out of it.
January 20th, 2007 at 10:39 pm
The whole point of this news article is that Apple isnt ALLOWED to cover the cost, due to accounting regulations. But, why should we expect you to actually do a little homework before you reply?
January 21st, 2007 at 3:59 pm
as usual all the macolytes with the brain implants miss the point which to me is that Steve wants to wring every last cent out of people dumb enough to use his stuff. $2 how many millions times is a lot of money and he could have just made gthew switch available free.
January 22nd, 2007 at 11:39 am
You know, I’ve read through all this and I’m still not comprehending exactly why Apple is charging $1.99 for this. I have devices that get updates all the time that add new features and functionality. The price of the hardware to do this was included in the computer purchase price even though it was not advertised. They are not giving it away at a discount, those wifi cards were paid for by their customers. If the hardware can do it, and all it takes is a minor software update, then what’s the problem?
January 22nd, 2007 at 12:12 pm
read this and understand it
January 23rd, 2007 at 8:29 pm
I’m sure it won’t be long before that update hits the torrent sites.
January 25th, 2007 at 2:07 am
I did.
Basically Apple is making an excuse by using SO to bilk their customer’s out of $2. Since the hardware is there anyways, why pay for it at all?