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Apple's alleged 802.11n enabler fee: blame Enron etc.

Sarbanes-Oxley Law imposes weird accountancy rules on Mac maker

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It's all Enron's fault that Apple will apparently charge $5 to make a recent Mac's AirPort Express Wi-Fi adaptor connect to other 802.11n-enabled devices. The fee arises from accounting rules imposed by the Sarbanes-Oxley Act put in place after collapse of the energy company in 2001.

According to Apple insiders cited by iPod site iLounge, if Apple gives the update away for free, it violates Sarbanes-Oxley.

The reason: changing a product's functionality changes the timeframe in which the manufacturer can recognise revenue from the sale of that product.

If Apple begins selling a product at the start of, say, Q1 and then adds a previously unadvertised feature to it at the beginning of Q2, under Sarbanes-Oxley, it has to recognise revenues from the product from Q2 onwards. Revenues recognised in Q1 run contrary to the rules enshrined in the Act. Unless, of course, the extra feature is a 'new' product, attracting its own revenue stream.

Crazy, but that's accountancy for you. Had Apple actually said at their launch that its latest Macs would one day be upgradeable to 802.11n, it could have avoided the charge, it seems. Apple isn't alone in shipping machines with 802.11n-capable Wi-Fi adaptors, nor is it the only one that hasn't said those adaptors will one day be allowed to operate in accordance with that WLAN specification. So expect other vendors to charge too.

Sarbanes-Oxley is a US law of course. It remains to be seen whether Apple's non-US customers will also face an 802.11n upgrade fee. ®

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