Are the beancounters trying to stop free updates?

Stephen Withers
Tuesday, 23 January 2007 11:30

IT Industry - Strategy

Apple has revealed it will charge some customers for the software that will allow full use of the 802.11n card built into recent Macs, and rumours are circulating that there will be a substantial fee for Boot Camp once it comes out of beta. What's this all about, and what are the broader ramifications?

According to a report published by CNet, Apple says it is required to charge a fee in order to comply with generally accepted accounting principles (GAAP) when significant feature enhancements are provided for previously purchased products.

That's why the company can provide the software free with the new AirPort Extreme base station - it's a fresh sale, so Apple is 'allowed' to match the delivery of the software with some fraction of the purchase price.

Let's accept for now that Apple's explanation is true and correct.

Part of the problem, it seems to me, is that Apple only claimed the hardware in recent Macs was compatible with 802.11b and 802.11g. 802.11n - draft or otherwise - simply wasn't mentioned. This was a deliberate choice: Apple knew the hardware had .11n capability, but either the new AirPort Extreme wasn't ready or the company wasn't ready to launch it, and presumably Apple wanted to discourage its customers from buying .11n routers from other vendors.

So what about the companies that have released draft n devices? Can we expect them to charge for updates that deliver compliance with the final standard? I would say no: the devices were sold as complying with .11n (or at least the then-current draft), and tracking the standard as it evolves doesn't constitute additional functionality. I note that Asus has promised a free upgrade to buyers of its WL-500W router even if hardware changes are required to meet the final standard.

The situation surrounding Boot Camp is different. Announced In April 2006 as a feature of Mac OS X 10.5 (aka Leopard), public betas have been available since then, "licensed for use on a trial basis for a limited time." If Apple chooses to offer ongoing licences on a commercial basis to those who want to stick with Mac OS X 10.4 (aka Tiger) rather than requiring them upgrade to Leopard, surely that's a positive development and not a reason for criticism.

But is Apple right in claiming that GAAP requires the company to charge for delivering additional functionality?