3 Apple WTFs

Friday, 2007-01-26; 22:35:00

So there's been a lot of stuff goin' around since I last penned an entry (which was before I went on vacation), but there are a few things that have me confused:

1. That whole rumor about Cingular AT&T possibly providing 18 months of free service to consumers who purchase the iPhone, presumably because the $500/$600 price point of the iPhone is not subsidized by Cingular (crap, did it again) AT&T. The rumor has since been denied by Cingular (*sigh*) AT&T.

What I don't understand, though, is... what does that even mean? Steve Jobs announced that when you purchase the iPhone, you get a 2-year contract with AT&T. What does this whole 18 months thing mean? That you'll get an additional free 18 months after the 2 years? That you don't get a 2-year contract, but that you get 18 months instead, contrary to what Jobs specifically said? And how is the 2-year contract in the original announcement not essentially "free"? (Yes, you're tied to AT&T, but presumably with this "free" 18 months thing, you'd be tied to AT&T anyway, right?)

Or is this 18 month thing unrelated to the phone contract, and instead something about the web data services (which apparently cost on the order of $20/month above the regular contract)?

(As a sidenote, it's also a bit strange that Apple announced the exclusive-Cingular contract while explicitly using the brand "Cingular" in the same keynote address where the CEO of Cingular, Mr. Awkward McNotecard, announced that AT&T was phasing out the "Cingular" brand. Why didn't they just agree to go with "AT&T" from the start and not confuse consumers?)

2. Then, there's the whole thing about certain European countries not supporting wide-channel operation in Apple's new 802.11-draft-n-based AirPort Extreme base station. (See footnote 2 at Apple's AirPort Extreme page.) Macworld UK claims that this limitation means that the new AirPort Extreme base station in the UK will only run 2.5x as fast as the previous 802.11g-and-b-only base station from Apple, rather than 5x as fast in countries that do offer wide-channel operation.

But the same article states that "Apple's [wireless router] takes advantage of a currently optional 802.11n feature, the ability to use either the 2.4GHz or 5GHz wireless spectrums. Most manufacturers, including Belkin, are only currently using 2.4GHz – the same frequency as 802.11g." The article concludes with "Most venders [sic?] haven't adopted this frequency so they can use 40 MHz and hence get the full 5x 11g speed."

This doesn't make sense. Wide-channel operation is presumably an optional feature, but adding support for an optional feature degrades performance in countries that don't support it, while manufacturers that don't include the optional feature don't get degraded performance?

... err, what?

Let's go through this again. Apple's device can operate in both the 2.4 GHz and 5 GHz frequencies. The article implies that Apple's device also supports both the 20 MHz channel and the 40 MHz channel. The 40 MHz channel in the 5 GHz frequency is the only one that is restricted in the UK and other European countries. So Apple can get 5x speed in the U.S. by using the 40 MHz channels in both the 2.4 GHz and 5 GHz. But in the UK, other manufacturers use the 40 MHz channel in the 2.4 GHz frequency to get 5x speed, but Apple can't, even though Apple's new device seems to explicitly support that same channel and frequency?

The only way I can see that making sense is if the law is lame and dictates that if your device actually supports the 5 GHz frequency in hardware, then it must not include the hardware necessary for 40 MHz channel operation, even if you disable the combo 40 MHz-5 GHz use in firmware. But even that doesn't seem to fly, because Apple could make a strictly-for-lame-EU-countries device, where the optional 5 GHz channel support was completely taken out, hardware-wise.

Anyone care to clarify?

3. This $1.99 "accounting fee" for being able to enable the 802.11n support in the latest Mac models. In the entire history of Apple, I don't remember a single time when they charged a few dollars to enable "dormant" features. Apple claims that the Sarbanes-Oxley Act requires them to charge for significant new features, otherwise it would be interpreted as selling an incomplete product but taking advantage of the "sale" to boost that quarter's earnings figures.

But what the hell? Apple has added significant new features with many point updates to the operating system without charging for this before! Aperture 1.1 and 1.5 were both significant updates, and they were free to existing users. If it's specific to hardware, then I can point to Apple adding in support for AAC, protected AAC, and Apple Lossless formats to every single iPod ever made. They improved battery life on iPod models many times, too. And they've added features to their base stations before too, like this firmware update to provide support for WPA on AirPort Extreme base stations.

(Crucial to Apple's argument, though, is that the original product needed to be purchased. That is, QuickTime 6 came with Mac OS X Panther, if I remember correctly, but since they didn't charge specifically for QuickTime, offerring QuickTime 7 for Panther users free of charge is OK. It is arguable, though, that QuickTime is part of Panther, and consumers originally paid for Panther, so that QuickTime 7 would fall under this obscure accounting rule. I also hesitate to point out every single sub-point release of Mac OS X, mainly because those are almost always bug fixes or really, really minor enhancements.)

Actually, I can recall one time where Apple has done this before: iChat AV was offerred as a $29.99 upgrade for existing Mac OS X Jaguar users, but it came bundled with Mac OS X Panther. But this doesn't seem to apply, because iChat AV was essentially a revved version of iChat, so it's akin to charging for iLife '06 even if you've purchased iLife '05.

I'm no accountant, but even accountants are blasting Apple's reasoning. (Although, you know, I have to call bullshit on the accountants, too: the linked MacRumors article cites Edward Trott, who says, "No, GAAP doesn't tell you to do anything. You need to work out your transaction with your customer, and GAAP will tell you how to reflect your transaction with that customer." But that means absolutely nothing. Yes, Apple could "work out [a] transaction" and give away the 802.11 enabler. But then GAAP "will tell you" to revise earnings from previous quarters downward. So that quote does absolutely nothing to disprove Apple's stated reasoning.)

Some clarification would be nice on this, too, but given that the fur is flying between Apple and the accountants, I don't think I'll be able to get a definitive answer right now. Not that it really matters -- I don't have access to any Core 2 Duo-based Macs on which I could run the 802.11n enabler, and I don't even have a base station capable of providing 802.11n wireless access.

Technological Supernova   Intarweb   Older   Newer   Post a Comment