Apple holds 802.11n capabilities hostage

It was odd enough for Apple to slip 802.11n chips into its recent Core 2 Duo systems without really letting on about it, but now they've gone full-out loony by charging $4.99 to download the 802.11n enabler patch on your system. If you purchase one of those new 802.11n AirPort Extreme Base Stations with your hard-earned $179, Apple will throw in the enabler software for free, but if you happen to already own an 802.11n base station or just wanted to feel like a big kid with an 802.11n wireless card of your very own without buying the Airport Extreme Base Station, you'll have to fork over the annoying 5 buck fee. The folks at iLounge dug into the story a bit, and it appears Apple is blaming accounting for the odd fee: "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." Yeah, crazy. We know. Until we get a better explanation than that bookkeeping hogwash, we're going to go with our first impression of the situation: this is just that tried and true "wear them down with micropayments" part of Steve Jobs' inevitable path to world dominion.

Read - AppleInsider
Read - iLounge

[Ellianth @ Jan 15th 2007 6:08PM]

I'd hate to have you as my lawyer. If someone said i stole a candy bar and i didn't, you'd get me life in prison. One would think after 4 defective products you'd try another manufacturer.

[John Doe @ Jan 15th 2007 7:28PM]

Steve Jobs would never try to wear his loyal followers down with "micropayments"

Yah just as Jobs would never fuck his customers over with shit like Quicktime Pro. Features that should be free but hey...lets go fuck our customers over anyways.

[Jeff Lewis @ Jan 15th 2007 8:25PM]

I'm going to assume this is very subtle sarcarm. :)

[Jagster @ Jan 15th 2007 5:51PM]

So I suppose there is something wrong, accounting wise, with the way almost all software/firmware upgrades have been done in the past. Perhaps we should pay $5 each time MS adds a feature to Windows or XBOX? Maybe we can start paying for new graphics drivers that add or enhance features? Look out iPod owners...

What a load of BS.

[Marian @ Jan 15th 2007 6:11PM]

Adding and enabling features are different. Maybe that's the trick.

[Aryeh Hillman @ Jan 15th 2007 5:51PM]

Unfortunately for Apple, most of the users that care about the 802.11n capabilities are the ones who know how to pirate software...

[Jeff @ Jan 15th 2007 5:56PM]

If it's just an accounting issue, why $5? Why not 1 cent?

Obvious answer: because Steve Jobs figured that extra $4.99 would look nice lining his pocket. Especially multiplied several hundred thousand times.

[tugboat @ Jan 15th 2007 6:04PM]

If I remember correctly, Stevie only makes $1 per year from Apple.

Granted, they did give him a Gulfstream V Jet...

[Xavier Gill @ Jan 15th 2007 5:57PM]

Earlier i was punching myself in the face and managed to escape the reality distortion field and type the following about the iPhone (though I think it came back towards the end)

Where's the one handed operartion?
Where's the 3G?
8GB is nice but where's the space for videos?
Where's the wireless sync?
Where's the replaceable battery?
Where's the wireless itunes purchases?
Where's the REAL OS X?
Where's the wireless media transfer with other iphones?
Where's the abilty to install full applications not just widgets?
Where's the pictochat/messaging between iphones?
Where's the office suport?
Where's the ice cream?

[carl @ Jan 16th 2007 12:39AM]

Xavier, looks like that list is going to run you about $59.88.

[applesucksLeo @ Jan 15th 2007 8:10PM]

Nice to see someone else is seeing through the holes in his demo.They only announced it so early because they didn`t have anything else in the pipe to show.It`s already backfiring on him.If he had released it the NEXT DAY like Apple usually does , he could have used all the hype to sell phones...for a short while at least.

[Jeff Lewis @ Jan 15th 2007 8:24PM]

He gets paid in options. The $1 thing is just direct earnings. You don't really believe he does this for free out of the goodness of his heart do you?

[mitch @ Jan 15th 2007 6:06PM]

That's crazy.
Crazy.

[Javaflash @ Jan 15th 2007 6:07PM]

Ah Geez, we're now whining about $4.99, that can't even cover the coffee I drank this morning. This is ridiculous.

For reference, Dell charges $30 during purchase for the same upgrade going from 802.11G to Draft n.

[Trenton Lipscomb @ Jan 15th 2007 6:07PM]

Apple is in business to make money. The $5 will offset any additional support costs ("my wifi is broke now after the upgrade; make it go") by adding this NEW feature.

Besides, most people didn't even know their systems were capable of 11n when they bought them. Would you prefer Apple had done this as a $50 come-in-to-the-store upgrade option?

[Ignacio @ Jan 15th 2007 7:08PM]

Do you seriously believe ANY part of the post you replied to was real? You are *not* supposed to fall for it.

[fraggle_rocker @ Jan 16th 2007 5:32AM]

If i remember right, when the ps3 shipped it didnt support all the high def resolutions, either did the 360, they had to enable them later with a firmware update. They didnt charge. Apple is just enabling the hardware.

If the ps3 gets a firmware update to handle bluray discs of higher capcity than 50gb, i bet they wont charge, it will just be included in the firmware update people have to do every so often. Same with the 360 with hd-dvd, any features enabled will just happen with free firmware updates. So lots of companies have shown that you can enable hardware for free, and you can add features for free. So i dont see a difference.

Including a chip for 802.11n and having to turn it on later, is EXACTLY the same as including a chip for 1080p and having to turn it on later.

[elnino2783 @ Jan 15th 2007 6:14PM]

It's a LIE! If they were so accountable, they would have to charge the fee when you buy their Apple product as well. The only way the could get around that is by having some kind of rebate instead of giving you the $5 outright.

[Alex @ Jan 15th 2007 6:17PM]

Something's not adding up here. As much as I'd love to pin this on Apple being bad, it just doesn't seem reasonable that a company with the history of customer relations would do something like this. There's got to be something we're not privy to. On the other hand, if it really is something this silly, I'll be happy to enjoy a laugh at Apple's expense.

[lyon @ Jan 15th 2007 6:20PM]

How long before the hackintosh community finds a way to open it for free?

[Alexander @ Jan 15th 2007 6:28PM]

Coming down in 5... 4... 3......

[rp @ Jan 15th 2007 6:23PM]

Apple is only as helpful as they want to be. I'd say that you were lucky they listened to you about your MacBook. After being an Apple user for my entire life, I often wonder why I put up with them.
I essentially had to go ballistic on them once to get them to recognize that my G5 sucked, and was completely broken. Finally, they made the repairs, and realized that I was right after all. Now my G5 is broken again, and I am not too happy about it.
You're pretty much good to go with Apple as long as you don't get a bad one, but if you get a bad one, man, you're so screwed it's not even funny, because they have the attitude that their computers are invincible, when in reality, they're just silicon, metal, and electricity like any other computer (but with a pretty, shiny, brushed metal look! wow! oh yeah, and a wonderful OS, can't be totally negative on 'em).

[T.J. @ Jan 17th 2007 12:37PM]

I totally agree. I'll defend Apple to my grave, but after 5 failed logic boards in my PowerBook (keep in mind this is in a period of less than 1 year and after being promised a replacement after the 3rd repair) I had to threaten legal action to get them to replace it. And then they made me PAY for the upgrades to make equivilent to my PowerBook... oh that pissed me off...

[Matt @ Jan 15th 2007 6:24PM]

It's actually a bit of a surprise to see this business model take so long in the high tech world. Think about it... most high tech components have very little marginal cost (~0/25% of the retail cost for software/hardware). Most of the expense is in engineering and other fixed costs. This enables a company to pre-install optional software/hardware (since it's so cheap to drop it in) and only charge the consumers who actually want it (the company still needs to get paid). What if you were buying an iPod with an FM tuner option, and had no intention of ever listening to FM. Would you rather spend $245 up front with no FM - knowing that you could spend another $10 to turn the FM tuner on, or spend $250 up front and get the capability that you don't ever plan to use? Assuming that 1/2 of the users eventually upgrade to video, Apple makes the same $$ either way. As the adoption rate of a feature goes up, the cost of it can go down. Now, imagine that rather than a single $10 item, there was an entire suite of capabilities that you could choose to enable later. Seems like a rather fair strategy that benefits everyone. The budget user gets basic functionality for a fair price, the power user gets access to options that nominally wouldn't be economically justified to include in the product, the company gets to widen their product portfolio without engineering 10 different versions (raising the cost for everyone) and the average user still pays the same for a middle-of-the-road feature set. Wouldn't that be nice? Car dealerships have been using this paradigm since the beginning.

[SomeGuy @ Jan 15th 2007 6:25PM]

It's called "Sarbanes-Oxley".. it's not Apple's fault.

[Craig @ Jan 15th 2007 6:31PM]

the accounting argument is bs. even if there were some rule that say a company can't fully recognize revenue from a fully functioning product (to my knowledge, there isn't, aside from some sort of included warranty or support), revenue recognition has nothing to do with collecting cash. by apple's logic, it could recognize 98% of the revenue at the time of sale, and the other 2% when the patch was released. no cash needs to change hands a second time.

but like i said, i see no reason why apple could have recognized all of the revenue up front.

[Chris Moroz @ Jan 15th 2007 6:35PM]

Jared - Why do you keep using a a product that breaks on you? And MS is charging more for Ultimate because it contains more features, while Apple is charging 4.99 for a firmware update.

Javaflash - Dell charges mroe because it's a different piece of hardware, Apple's charging you AGAIN for something you've already paid for.

[Kenban @ Jan 15th 2007 6:47PM]

Anyone sure if there is a fee to produce a 802.11n product? This charge might be similar to the $29.99 that was charged to play DVD's on the original xbox. Its not that the hardware can't do it its that Apple did not want to pay the fee so they shipped it as a 802.11g card. Microsoft did not want to play the DVD playback fee so they sold the ability seperate from the console.

[WT @ Jan 15th 2007 7:07PM]

This is a lot of posts about nothing. Here's the deal. . .if you don't need 802.11n, you don't pay anything. If you want it, you pay $4.99. As for me personally, I don't need it, so I won't pay. If your pissed that a company might ask you to pay for additional functionality, go right ahead, but don't get upset if some accuse you of being unreasonable.

[Bobo @ Jan 15th 2007 7:08PM]

why don't you nerds put in perspective.
5 bucks.
big deal.
that's a beer in some crap-ass bar.
get over it and move on.

[Nick Gold @ Jan 15th 2007 7:16PM]

THIS IS DUE TO SARBANES OXLEY YOU DUMMIES. Don't blame Apple.

[Jeff Lewis @ Jan 15th 2007 8:31PM]

Excuse me - but how exactly does Apple charging a fee for a firmware upgrade have ANYTHING to do with the Sarbanes-Oxley Act of 2002? That was to prevent another Enron by establishing tighter controls over financial reporting.

If anything, Jobs recent options event would be more in line with the act than this.

[mrhammerstein @ Jan 15th 2007 7:16PM]

is this to help pay their legal fees for the cisco lawsuit?

and $5 bucks is no big deal. but multiply that by a few thousand and apple gets a nice bonus for unlocking something you already paid for.

[ShinyBrownCoat @ Jan 15th 2007 7:18PM]

From a revenue-recognition standpoint (which is what this accounting mumbo-jumbo is about), the only real problem is when you have created the expectation with customers (through marketing, advertising, presentations, or direct meetings) that a specific version of the product includes a specific feature or capability, and you don't actually include those features in the product you ship. I don't see how adding features later via patches, etc. really impacts this pre-sales/pre-ship expectation, so either the accountants/lawyers are being conservative (and running the show to boot) or there's another reason for this.

[supernova @ Jan 15th 2007 7:24PM]

why doesn't this article point to the patch download?
i'd be interested to buy it, even if it's 5 bucks. but might be worth it.

i was searching like crazy but couldn't find anything. so where is the link?

[David @ Jan 15th 2007 7:44PM]

This is apparently coming out next month according to TFA.

[John Doe @ Jan 15th 2007 7:29PM]

Its a nonissue anyways. Give it a month. It will be on every bittorrent site in the world.

[Chris Merchant @ Jan 15th 2007 7:34PM]

Honestly guys, whomever said to 'put it in perspective' is right. It's $5. We paid upwards of $1,000 for the computer.

If it's worth the cash to you- then throw it down. If it's not, then don't. I see how you guys like to complain about the 'But it's the PRINCIPAL'. Well as long as it's going towards a product you like, why does it matter?

Besides, good 'ole Steve needs every dollar he can get his hands on for the Cisco hounds.

[John Doe @ Jan 15th 2007 7:41PM]

Holy shit. If this was Dell every Mac user would be freaking out. Is $5 a lot of money? No. Its the principle of the thing. What next are they going to charge for? EFI updates? Patches? Driver Updates? I already spent 3 grand on this laptop. So you are telling me I should pay for my hardware twice huh. What a load of shit.

[Tom Robinson @ Jan 15th 2007 7:47PM]

Oh boohoo Apple is charging you all $5 for a feature that you would normally have to BUY A NEW COMPUTER, or at new least wireless card, to get. The fact is when you bought your computer it never said anywhere that it came with N support. It does cost money for Apple to develop software drivers, too.

That, along with this whole thing being an accounting technicality due to this Sarbanes-Oxley act makes this a non-issue.

However, to get around the Sarbanes-Oxley act in the future, couldn't Apple advertise "minor software upgrades" as a part of the cost of buying a Mac or Mac OS X?

[Brian @ Jan 15th 2007 8:03PM]

Cheap on Apple's part. Really cheap. Like, small time, small potatoes cheap.

Pathetic. Do you suppose that it's a sign that Apple's not *really* doing as well as everyone's being led to believe?

[Camperton @ Jan 15th 2007 8:04PM]

I don't know whats more annoying. Paying 5 bucks or people complaining about paying 5 bucks. I think the complaining wins by a hair.

[vaporland @ Jan 15th 2007 8:05PM]

about ten minutes after the first Airport Extreme arrives at someone's door, the 802.11n enabler will be on the P2P networks . . .

[Camperton @ Jan 15th 2007 8:07PM]

Brian

Apples cheap? Well then so are people who have a problem with paying this fee. Most people have no problem paying that much for a cup of coffee but when it comes to activating an unadvertised feature of your computer you didn't even know was there it suddenly becomes a problem.

I just dont get it.

[Chris @ Jan 15th 2007 8:31PM]

Torrents.

[Notung @ Jan 15th 2007 9:04PM]

Boys and girls,

1. Engadget is not biassed, it IS you in fact who tend to have this child argument about good vs evil when we come down to CONSUMER ELECTRONICS and world domination, apple vs dell, msft vs the world... absurd. Men, spend your time not caring about who says what about how good or bad are products, that you have, or that you don't but you want to, and that you don't and don't want to but that interest your voyeurism. Put your money where you want, and get rid of those inferiority complexes, rant about your fashions no other's. Again and again and again... who cares? Apple is not good or bad, it is only that this update thing stinks.

2. No sabarnes "ox-law" will force somebody to do such thing, in fact if somebody pays, it should be accounted directly to the download costs and the "software" update (development and distribution costs), and if you want to charge that for a value added that it is not charged, explain us why u don't get an invoice of a macbook pro with a breakdown of the price of every fricking piece of hardware u get, or why the give away that for free with another separate piece of hardware which revenue shall account solely for its direct distribution. And, why not acounting a small amount as a loss for giving away by "mistake" (shall it be called that way?) a certain feature (promo or marketing expenses, or just an unexpected cost), furthermore if Apple is profitable it will be a good way to take something out of profit taxes... ummmm), so that "mistake" will be less sour in the end. And many more things that Apple could do by the book not to charge a stupid amount to people who already payed a LOT for a computer that has a "stupidity value" (brand premium) as high as them. It is lame and very unpleasant to take out your credit card to pay 5 bucks for an update. That is the whole point.

So, be water my friends, be cool with consumer electronics, nothing of that kind deserve such passion. We are killing our planet, people is starving, and I dont pay directly Engadget to get the news... they owe me nothing

[Fred @ Jan 15th 2007 9:12PM]

I'm not a lawyer (yet) but my gut instinct is that, if Apple is not simply being greedy, this is an issue because it is a *significant* upgrade rather than a minor firmware update or a security patch. After all you would normally expect someone to pay for a 802.11n upgrade if it was unadvertised (and they therefore did not at the time of purchase). If they don't have to pay for significant unadvertised features then you could sell 100 laptops to someone as 'broken' for $1 each (minus the OS say) and then 'upgrade' them for free, leaving you and the buyer to split the profits.

An 802.11n upgrade is significant, especially, and this is probably the killer point in light of how many additional units of apple TV and airport extremes Apple will sell because of it.

So I don't think that the accounting excuse is total bs. I suspect it is partly due to that and partly due to Apple wanting to make money.

[David Sanders @ Jan 15th 2007 9:13PM]

Ok enough already, engadget isn't biased against apple, thats such a ridiculous statement I wish you could hear yourself. Is this your first time reading this site?

Notice how apple is not charging you the 5 bucks if you buy their airport router? But if you buy a Linksys or another one forget it – nice to see apple doesn’t miss a beat on making a few extra bucks, even now that they are rolling in cash with all the ipod sales.

You can be a fan of apple and still criticize them, its not against the law (I don’t think so anyway, maybe in some parts of california it is) Charging for a firmware or driver update is just wrong plain and simple. Doesn’t matter who is doing it dell, hp, microsoft, apple, doesn’t matter – its just a pathetic move on their part to make you pull out your credit card for a firmware update.

[mrsalty @ Jan 15th 2007 9:15PM]

Instead of bait and switch this is switch and bait and dangle the damn carrot infront of me. Oh, well, if we hadn't figured out we actually had those N chips in our machines and then Apple said, for only $5bucks we are gonn give you a 5x boost in speed if you can get it, hell it would be christmas in January for me.

[sunday @ Jan 15th 2007 9:33PM]

The Evil Applepire Strikes Again

BTW Why is that damn iphone link still up. Mac world ended weeks ago, I dont see anything up for CES, what gives?