Paul’s Soapbox: Apple Fiction and Machiavellian Self-Interest
by Paul Ellis
Paul’s Soapbox is a new regular feature of TechConsumer where I sound off on various tech topics/products that I’m interested in (or hate). This is just my $.02, so consider yourself warned. Apple gets another beat down this week…
AppleTV is first up on the chopping block. Personally I love how Steve Jobs said at Macworld 2008 that AppleTV 1.0 was more about sharing music and pictures. If that was really the case then why was it called AppleTV? It is funny that a device with TV in the name has hardly any TV content. Especially since the departure of NBC from iTunes. AppleTV “Take Two” is about movies; it won’t be until AppleTV “Third Time’s the Charm” that you’ll get the TV part. Yet another reason why people should hold off on the AppleTV.
It is apparent that Apple is deliberately trying to avoid any sort DVR functionality too. I think Apple does not want to have to compete head-to-head with Microsoft’s Media Center offering. If you haven’t seen what Vista Media Center is like (which is included with Vista Home Premium and Ultimate) you owe it to yourself to check it out; especially if you have an Xbox 360 and could leverage the extender functionality. I think it is the best DVR UI I have ever used (better than Tivo even).
It would probably be easier for Apple to get more TV content if Steve didn’t develop such a bad rap with what he did to the companies in the music cartel industry. Everyone else saw that you need to be careful when you partner with Apple. Steve seems fairly Machiavellian in is his business relationships. I wouldn’t want my company to partner with Apple. It is like partnering with Walmart; a very one-way relationship.
One more thing that just kills me. What is with Apple and blaming GAAP and SarbOx for charging customers for new features? In case you haven’t heard about this, I’ll give you the gist of it. Apple has started charging users for various updates that would usually be free, but they have officially stated that it is because of accounting regulations. If they add significant new features without charging for them they’d be breaking the law, and/or they would have to restate earnings for previous years.
First it started with nickel-and-diming selling MacBook Pro users an updated driver (a new driver!) to enable the Wireless-N functionality that was already built into the laptop they had purchased. Yeah, they were charging people for software to use hardware they already paid for! Then they started charging $20 to iPod Touch users for software that is included with the iPhone. Now, accounting is the “reason” for why movie rentals won’t come to pre-generation six iPods. It isn’t that they just want you to upgrade to a new iPod, they swear. No seriously. Honestly. They would if they could, but they can’t. No other company could concoct a story like that for their customers and get away with it.
The Playstation 3 and Xbox 360 have both had significant new features added. Microsoft made the Zune 1.0 upgradable to the Zune 2.0 firmware. My Treo cellphone has had a number of updates that added significant features (instant messaging, SDHC memory card support, push-to-talk support, MP3 ringtones). Or how about my Linksys WRT54G that I’ve been running forever, I don’t even know how few features the 1.0 firmware had compared to what comes on it now. Basically anything with firmware can get significant new features. So apparently every other tech company on the planet just figured out how to screw over the U.S. government whereas poor old Apple suspiciously has to appeal to the good nature of its core consumers?
Although even the iPhone and AppleTV have had significant new features added which Apple didn’t charge for. Apple, if you want to gouge charge your customers, get a spine and just say you are going to charge them for new features. Don’t hide behind what looks like an outright lie that you can’t make the features available for free. Between my undergrad and graduate accounting courses I know enough to know that isn’t true.
*I promise I won’t even mention Apple in my next soapbox. 
Note: This article is cross-posted at PseudoSavant.
16 Comments 
February 5th, 2008 at 1:48 pm
Yeah, Apple hiding behind GAAP and SarbOx for charging customers is pretty low. And it’s true that other companies would get flamed for the same kind of behavior.
I’d like to believe Apple’s reasoning is legitimate (or at least not deceptive), but I haven’t seen an explanation which shows it as such.
February 5th, 2008 at 1:55 pm
The only things I have read that defend Apple’s stance are usually written by people who admittedly know basically nothing about accounting. It is my take that Apple is telling fish stories. Of course Steve claims that he doesn’t even understand stock options well enough to realize the effect of back-dating them to days where the stock price was particularly low.
February 5th, 2008 at 3:25 pm
That’s funny; I hadn’t even thought about the irony of this juxtaposed with Steve’s track record with accounting/finance principles…
February 5th, 2008 at 5:04 pm
Not to detract from bashing Apple’s business practices (which is tons of fun), but I just want to comment on how amazing Vista’s Media Center is. I used it for a while back when I still had my copy of RC1. I can’t even explain to you how sad I was when I finally had to get rid of it because it expired. I have searched high and low for something similar in terms of media center abilites, and theres really nothing that even comes close in terms of usability and stability. I’ve used MediaPortal, BeyondTV, GBPVR(this ones not too bad) and none of them have a feature set comparable to Vista’s Media Center. I really should just purchase Vista Ultimate or Home Premium…but I can’t warrant spending $150 or more just to have a nice functioning media center app again.
February 5th, 2008 at 6:06 pm
“It would probably be easier for Apple to get more TV content if Steve didn’t develop such a bad rap with what he did to the companies in the music industry. ”
Yeah, he only sold about 4 billion songs for them by providing a consumer-friendly outlet for legitimate music purchases.
I mean, selling their product for them, and doing it well. Can you imagine the nerve?
February 5th, 2008 at 6:17 pm
“Although even the iPhone and AppleTV have had significant new features added which Apple didn’t charge for.”
You may have a degree in accounting, but you must have flunked Basic Google Search 101. Apple is taking the revenue from iPhone and the Apple sales on an 18-month subscription basis in order to avoid those same troublesome accounting issues, which is why those particular upgrades were “free”.
Now, one could make a case that they should have done the same thing for the Touch, but I suspect that they saw that device as being relatively feature complete, and didn’t expect the number of complaints regarding the “missing” iPhone features. Taking EVERYTHING in on a subscription basis has an impact on the bottom line.
February 5th, 2008 at 7:28 pm
“You may have a degree in accounting, but you must have flunked Basic Google Search 101….Taking EVERYTHING in on a subscription basis has an impact on the bottom line.”
I couldn’t find Apple’s statement regarding the itunes gouge, but the link for their statement regarding the 802.11n gouge is here: http://www.macworld.com/article/54948/2007/01/80211nfee.html
How does apple’s bottom line justify fabricating tales that GAAP and Sarbanes-Oxley prevent free software updates?
February 5th, 2008 at 8:34 pm
I’m with Steven here, Michael. And when you say, “Taking EVERYTHING in on a subscription basis has an impact on the bottom line.”
Remember that we, as consumers, don’t care about Apple’s internal accounting problems. Also remember that most all tech companies don’t gouge consumers in the same way and are subject to the same laws as poor little Apple. So far, I haven’t seen a reason to be sympathetic with Apple specifically…
February 5th, 2008 at 9:30 pm
Michael: I know that Apple makes a big deal about the “subscription” accounting for the iPhone and AppleTV, but I think that is bogus. I am about 95% sure that Microsoft, Linksys, Sony, Palm, Netgear, D-link, Nintendo, Logitech (Harmony Remote), BMW (iDrive), nVidia (new driver features [dual monitor support, hdtv setup, etc] are still compatible with a GeForce2MX), Samsung (my mp3 player got a lot of features via a new firmware), and every other company that releases free firmware updates don’t account for their sales under a “subscription” model. I’ll believe it if you can give me some data to prove otherwise.
See my point is that people (such as yourself) buy the tales that Apple tells without even questioning it. You mock my education (I don’t have an accounting degree btw, it’s an MBA in finance and marketing), and then you put your faith in whatever Google tells you. After all if it is on the web it is true.
And to reiterate Bob’s point, for a company that is supposedly so customers friendly, why are they jerking their customers around because of their accounting practices? After all, the money that is coming in comes in the same either way. It is just recorded different. Honestly, the market doesn’t really care how it is recorded; they care more about cash flows. They don’t care how the bean counters recognize the cash.
February 5th, 2008 at 9:39 pm
Tyler: I was just checking the prices on Vista Home Premium and I noticed that Amazon has an awesome deal on it right now. The OEM version is $109 ($30 off), and the retail upgrade version is $100 ($60 off!). So if you are thinking of upgrading (and I do consider it an upgrade) that is the best price you’ll ever see. I don’t know if I have ever seen Windows go on sale before.
Do you know my favorite thing about Media Center? That the picture quality (and this is actually through my Xbox 360) for standard def programming looks a lot better than through my cable box, or using my TV’s built-in tuner. It is so much better even my wife noticed.
February 6th, 2008 at 12:51 am
Wow, that is a really good deal. I may have to consider it at that price point. The one thing that I dislike about Home Premium, however, is the lack of Remote Desktop. Yes, I know I could use VNC or something similar, but I’ve always found Remote Desktop to be faster and more stable. I guess I could probably live without it though.
I’d have to agree too, it’s interesting to see Windows on sale. That should tell us something about Vista’s popularity. :-/
February 6th, 2008 at 10:11 am
Check out LogMeIn. It is a competitor to GoToMyPC, that has a free version. There aren’t any ads, but they do try to up-sell to the higher end versions (remote support version, remote printing, file sharing). It is very good. I have Remote Desktop, VNC, and LogMeIn all setup (I used to be indecisive, but now I’m just not sure) and I pretty much only use LogMeIn.
About the Vista sales, I was wondering the same thing. It isn’t doing as well as XP, but it isn’t following up Windows ME either. Windows ME created a lot of pent up demand for something new. I have already mentioned that I really like Vista, and SP1 does make it a lot better. I have been running the SP1 RC since December and it is quicker. I’ve been thinking of writing a post to highlight all of the new things in Vista that nobody talks about. I really don’t like using XP anymore because it seems so sparse.
February 6th, 2008 at 10:17 am
Yeah, I use Hamachi, which is part of LogMeIn’s suite of programs, to set up a VPN between my two computers. It works very nicely for file sharing and since I still have Remote Desktop on both of my computers, I can use the IP’s that Hamachi assigns me to access them from one another, almost anywhere In the world. Heck, as long as I know my VPN name and password, I could technically install Hamachi on any other system and connect back to my two computers as well.
You should do a write up on SP1. Maybe if it fixes so much stuff, I’ll have a reason to try out my free copy of Business.
February 6th, 2008 at 10:45 am
SP1 doesn’t really add any features. It is pretty much just about performance and stability. It is as stable as XP SP2 for me, and this is actually the release candidate code. I’d have to look at the list of changes to see what the SP1 actually does. The only thing I know for sure is that it runs the same kernel as Windows Server 2008 now (build 6001 instead of 6000).
I should do a post on how I optimized my Vista install. It is pretty similar to how I always optimized (services, networking, uninstalling features, etc) XP, but there are a few more areas that you can do even more now (power management especially) in Vista. I’ll just have to get around to writing it…
Do you get a free copy of Business through your university? You can use Vista Anytime Upgrade to upgrade from Business to Ultimate for $139 if you want everything. Fortunately for me, my university has an agreement with Microsoft so we can get Ultimate for $35. Although I only use the Home Premium level of features.
February 6th, 2008 at 11:03 am
Yeah, since I’m in an I.T. major, certain classes enroll us in MSDNAA which is Microsoft’s Academic Alliance program. They offer all kinds of free software and operating systems. I think I actually have access to 3 different ‘versions’ of XP, a copy of Windows 98, Server 2003, and Vista Business. They also offer software like Visual Studio, Project, etc. It’s pretty nice, but they don’t do it for just any class. Right now, even though I’m enrolled in two classes for my major, I don’t get an MSDNAA subscription.
I was aware of that upgrade price, maybe I’ll have to consider that as well.
March 22nd, 2008 at 6:27 pm
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