5 comments

• 

  Steve R.

  2 years ago

  Ridiculous is the attempt of Apple to assign blame for their attempt at price gouging on SOX. Ok the term "price gouging" for a $5 product may be a bit extreme.
  
  Since I have not studied SOX, nor am I either a lawyer or an accountant - I cannot explicitly refute the connection other than to say that this assertion simply does-not-compute. I would like to see a legitimate discussion of how SOX could be interpreted to apply to this case. But as written, SOX has been thrown out by Apple as a "red-herring"
  
  Let's look at the SOX connection based on recent news stories. Apple claims that it has to impose this onerous user charge on SOX. Yet Apple ignores SOX for other corporate activities.
  
  Apple proposes to introduce the iPhone and has been sued by CISCO for patent infringement. Introducing a product line that has significant potential liability associated with it, would be a major accounting nightmare.
  
  According to the Washington Post (Dec. 30, 2006) Apple has admitted to falsifying the approval of 7.5 million stock options. The falsifying of records on its face is illegal, you don't need a law such as SOX.
  
  My point, if Apple is willing to pursue questionable business activites involving millions of dollars, that appear not to be legal, why should I believe that they are being "honest" over a $5 item.
• 

  Jerry Brito

  2 years ago

  Steve,
  
  You comment around here a lot, and I appreciate that, but I'd wish you'd be a bit better informed before doing so. First, as all the articles point out, Apple hasn't said anything yet. This is all speculation, so your claims that Apple s using SOX as a "red herring" are baseless. Second, what does Apple's actions on any other front (stock options or IP) have to do with its actions on the Wi-Fi charge? Company's aren't people, and they don't have to take internally consistent positions.
  
  In any event, just to clarify your IP point, Cisco has not sued Apple for patent infringement; it has sued for trademark infringement. This is more than a semantic quibble. I'm sure Apple knew what it was doing by using the iPhone name. It felt pretty comfortable either that a) Cisco had abandoned its trademark, or b) it's product is sufficiently different to use the same name without violating the trademark.
  
  Cheers,
  JB
• 

  Don Marti

  2 years ago

  In the magazine business, you sell a subscription, send the first issue, get paid, and then send the remaining issues. You don't have to bill as you go. What you do have to do is put the money for the un-sent issues in a subscription escrow account. Sarbanes-Oxley didn't change this.
  
  

  If a vendor really takes the position that they can't recognize the revenue until the feature works, that's no reason to bother the user at upgrade time -- they can always put the cost of the feature aside in a separate account and recognize it later.
• 

  Steve R.

  2 years ago

  Thank you for responding.
  First, I stated in my prior post that I could not expressly refute the possible legitimacy of the claim that SOX could "require" Apple to charge "extra" in the name of proper accounting. I also asked that this tenuous connection be explained in greater detail. If this connection can be demonstrated, my "case" dies and I go sulk in a corner for a while.
  Second, talk is cheap. It is easy for Apple to pick some obscure law that many people do not like as an excuse for charging extra rather than admit that they simply want to get an extra $5 for each Mac sold. Accounting is accounting, I simply find it incredulous that a $5 item can somehow cause major accounting issues while back dating stock options does not. Seems like an obvious case of relative reality.
• 

  Jeremy

  2 years ago

  SOX makes companies do some pretty stupid things that costs them WAAAAAY more money than Apple could hope to make off this.

  For example, at a Fortune 500 electronics retailer which I just finished a contract with, some IT managers are requiring developers to write word documents to describe each and every line of code they write. Seriously. All so the CIO can review it, supposedly (we'll see if that happens). They're spending more time on SOX compliance than actually doing productive work.

  Believe me, I'm no fan of corporate America, but in the case of SOX they have no idea what to do and they're all really scared of being the next Enron. Besides, Apple charges enough for their macbooks already... when you can basically name your price and have people buy whatever you put in an off white box, I doubt they care much about $4.99.