<Accounting Guru goggles on>
WARNING: accounting contortions ahead
...from:
http://news.zdnet.com/2100-1040_22-6151790.html?tag=nl.e622
By Tom Krazit, CNET News.com
Published on ZDNet News: January 19, 2007, 6:56 PM PT
Apple's explanation of a planned Wi-Fi upgrade fee has its roots in
obscure accounting rules that tell companies how to book sales of
future product upgrades.
Apple said Thursday that it plans to charge customers $1.99 for a
software download that enables the 802.11n Wi-Fi technology currently
present in almost all MacBooks and MacBook Pros with Intel's Core 2
Duo processor. The company says accounting rules known as generally
accepted accounting principles (GAAP) force it to ask for money for
the download.
"During the past several months Apple has shipped some Macs with the
hardware to support 802.11n, but the draft of the 802.11n
specification was not complete enough to create the required
software," Apple spokeswoman Lynn Fox said in an e-mail to CNET
News.com. "Now that the draft specification is complete, we are ready
to distribute the software to make the 802.11n hardware in these Macs
come to life."
But because the company has already recognized all the revenue from
the sales of those computers, it has to now charge customers at least
a nominal fee in order to establish the value of its software upgrade
and satisfy an obscure accounting regulation known as SOP 97-2, said
Fox.
Apple didn't have to do it this way, say accounting experts. But the
company most likely faced difficult choices in relation to the
upgrade: It could have held off on shipping the new Macs until the
upgrade software was ready. It could have skipped the 802.11n
capabilities altogether. Or it could have deferred revenue from the
new Macs until the software was ready--all unlikely and unpalatable
options. Hence, the $1.99 fee.
[...]
Apple began selling MacBook Pro notebooks with Intel's Core 2 Duo
processor in September, later adding that chip to MacBooks and iMacs.
However, the company also included 802.11n chips in almost all of
those systems without telling buyers, Apple CEO Steve Jobs revealed
at Macworld last week.
Here comes the tricky part: under accounting regulations developed
over the last several years, when companies sell a product with
multiple pieces that are delivered at different times, they must
determine the separate value of each piece of that product,
accounting experts say. And the company can only record the revenue
associated with a specific piece when it is delivered to the customer.
This is a very common practice in many industries, said Ryan LaFond,
assistant professor for accounting at the Massachusetts Institute of
Technology's Sloan School of Business. For example, magazines receive
all the money for a full year's subscription at the time the
subscription is purchased, but they only record that as revenue as
each issue is delivered, deferring the remaining balance into a
liability account called unearned revenue.
[...]
That means a company in this situation would have to defer all the
revenue associated with the product until it can establish the value
of the Wi-Fi upgrade, or until it delivers the complete set of
software, said Brett Trueman, a professor of accounting with the
Anderson Business School at the University of California at Los
Angeles. So, Apple would have had to defer all the revenue for Macs
sold with the 802.11n chips from September until it delivers the
upgrade in February, and that's not a realistic option.
So now, Apple has to establish a value for the Wi-Fi upgrade in order
to satisfy the requirement to separately account for the different
pieces of software. One easy way to do that is to charge people for it.
There's absolutely nothing in the GAAP requirements that says Apple
must charge its customers for that software upgrade. The only
requirement imposed by GAAP is that Apple must account for the
separate value of the 802.11n capability, said MIT's LaFond. It can
do this by creating a value at the time of purchase or it can wait
until it delivers that capability to record all the revenue
associated with the product.
Another option, if the company had wanted to keep the 802.11n
capabilities secret, is to create a "new arrangement" with the
customer. Apple sold the customer a notebook in September, and is now
selling the customer 802.11n capabilities for that notebook. These
are two separate transactions that satisfy the need to account for
the undelivered 802.11n capability as well as Apple's desire to book
all the revenue for the notebook up front and keep the use of the
802.11n chip a secret.
Any of those options would satisfy Apple's need to account for the
separate delivery times for the Macs and the 802.11n capabilities,
according to several experts interviewed for this article. But simply
blaming the fee on GAAP, or on the Sarbanes-Oxley regulations as some
rumors have suggested, does not tell the full story.
"If I'm a company, and I want to give my customer something, GAAP
isn't going to prevent you from doing that," LaFond said. But at a
time when Apple's accounting practices are under significant scrutiny
from regulators looking into the company's stock-options backdating
practices, the company has to be extra careful about following the
proper procedures while keeping financial analysts happy with strong
earnings reports.
<Accounting Guru goggles off>
...from a posting from Rogers Wireless Communications Service/
Customer Care:
> On Tuesday, January 9, 2007, Apple announced the unveiling of their
> new
> iPhone, a combination mobile phone/digital music player/camera
>
> Availability
> " The iPhone will first be introduced in North America (United
> States around June, 2007)
> " Cingular is the only wireless carrier to launch the iPhone in the
> United States
> " Rogers is actively working with Apple to launch the iPhone in Canada
> as soon as possible and will be the exclusive provider of the
> iPhone in
> Canada
> " Apple is planning to introduce the iPhone in Europe (Q4 2007) and
> Asia
> (2008)
> " Please be advised that Rogers will be offering the iPhone
> exclusively
> in Canada. Unfortunately, the launch date and pricing for Canada
> are not
> yet available
> " Other Canadian wireless carriers will not launch the iPhone, Rogers
> will be the only Canadian wireless carrier to offer the iPhone
>
It's hard to say exactly how to interpret this but I get the feeling
that Rogers is somehow going to be tied up with the release
of iPhone in Canada. ::-)
...and from another Canadian source:
> .... the iPhone will be available on a two or three year contract,
> and a data plan must also be purchased [from Rogers]
If you go by lag-times found in other "smart phone" releases (6-9
month delays), the iPhone might be arriving in Canada in late 2007 or
early 2008.
Apple announced on Tuesday their iPhone - the "iPod/cell phone/web
browser" in one device. The "cell phone" service on iPhone is
available (currently) only if you are a subscriber to the Cingular
service in the United States. Cingular is owned by AT&T and today
AT&T released the following announcment:
...from:
http://news.com.com/ATT%20to%20phase%20out%20Cingular%20brand/
2100-1039_3-6149743.html?tag=nefd.top
> AT&T to phase out Cingular brand
> AT&T will begin to extinguish the cell brand to imprint its more-
> than-century-old name firmly across its services.
> By Reuters
> Published: January 11, 2007, 10:30 PM PST
> Tell us what you think about this storyTalkBack E-mail this story
> to a friendE-mail View this story formatted for printingPrint Add
> to your del.icio.usdel.icio.us Digg this storyDigg this
>
> AT&T will begin to extinguish next week the brand of cell phone
> operator Cingular, built up with billions of dollars over a few
> years, to imprint its more-than-century-old name firmly across its
> services.
>
> AT&T, which took full control of No. 1 U.S. mobile carrier Cingular
> with its $86 billion purchase of BellSouth last month, will launch
> on Monday a campaign to mark the change.
>
> "We did not enter that decision lightly," Wendy Clark, vice
> president of advertising at AT&T, said in an interview. "We came to
> understand that consumer customers and business customers alike are
> looking for a single provider. We heard it so consistently across
> the marketplace."
>
> In its first stage, Cingular will share its orange logo of a
> bouncing jack with the AT&T globe logo on everything from
> television ads to sales uniforms and monthly bills.
>
> AT&T 's name and logo will eventually replace Cingular in a process
> expected to take several months, with the exact timing determined
> as more customer feedback comes in, Clark said.
>
> But with its long and complicated history, AT&T may face customer
> confusion over its name, marketing experts said. Also, Cingular
> built up a reputation among younger customers who may not easily
> associate with the AT&T brand.
>
> [...]
> The new AT&T was formed in the merger of SBC Communications and
> AT&T in late 2005. Adding to the mix, in late 2004 Cingular bought
> AT&T Wireless, eradicating that brand for its poor reputation among
> customers.
>
> "The good news is there is a difference between AT&T and AT&T
> Wireless," Clark said. "We have benefited significantly...by having
> 12 months under our belt as the new AT&T."
...and in a related bit of information, it turns out that AT&T
Wireless(Canada) did exist until it was recently sold to Rogers. The
reason this is interesting (in an iPhone kinda way) is that AT&T
Wireless installed a GSM/EDGE cellular network across Canada. This
network is now owned and operated by Rogers. GSM/EDGE is the type of
cellular service supported (currently) by iPhone. So, if/when iPhone
comes to Canada, it will be with Rogers - unless there is an unlikely
new iPhone design released supporting other cellular networks.
Just thought it would be useful information to anyone thinking about
the iPhone or wanting to get more information about iPhone
availability in Canada.
Wayne
p.s.
It's interesting to note that Apple's web site refers to the iPhone
as the iPhone (Apple Symbol-iPhone). Due to the conflict with the
also recently announced Cisco branded iPhone, perhaps a name change
from iPhone to Phone (AppleSymbolPhone) is in the offing - just as
the code named iTV product was changed to TV (AppleSymbolTV).
p.p.s.
.from:
http://www.businessweek.com/investor/content/jan2007/
pi20070111_181241.htm
Cisco Sues Apple over iPhone Patent
Cisco Systems (CSCO) Files a lawsuit in the California district court
against Apple (AAPL), seeking to prevent Apple from infringing upon,
deliberately copying, and using Cisco's registered iPhone trademark.
Cisco says it obtained the iPhone trademark in 2000.
iPhone:

- runs OS X
9:47: A giant touchscreen interface. Multi-touch! You can do multi-
gestures on the screen itself. Screen auto-rotates picture.
9:52: Controls on the side, volume, silent. The Back: 2-megapixel
camera.
9:53: Top: headset jack, SIM, sleep-wake.
9:53: An iPod connector, just like the iPod (on the bottom).
9:54: Proximity sensor on the face, turns off the screen so your face
doesn't press the buttons.
9:54: Ambient light switch and accelerometer to switch from portrait
to landscape.
9:55: Built-in speaker.
10:16: Rich HTML: Any IMAP or POP.
10:16: Safari on the phone. Browsing gives you the standard (tabbed)
browser view but scrolling, zooming, all via the gestures. You view
the entire page first (too small to read in normal view, so you need
to zoom in).

10:16: Google Maps: Sat directions, traffic, and maps.
10:16: Widgets: Weather and stocks.
10:17: Everything goes over EDGE or WI-Fi, which switches
"seamlessly" when the phone detects Wi-Fi.
10:17: Yahoo Mail will provide free push IMAP email for all customers.
TV (AppleTV):
9:27: USB2, Ethernet, WiFI, HDMI, Component, Stereo inputs.
9:28: 802.11b/g/n
9:29: You can store 50 hours of videos on its 40GB hard drive.
AppleTV can stream up to five computers.
9:31: Streaming theatrical trailers from Apple.com. The quality's
actually pretty good at 720p.
9:34: Apple's showing off some Zoolander and Heroes clips from the
Apple store.
9:36: Music, photos, slideshows (Ken Burn's effect-type).
9:38: Phil Shiller's brought his MacBook over to stream up an episode
of Heroes to the AppleTV.
9:40: Taking orders today, shipping Feb.

If you're looking for live video coverage of the keynote from
MacWorld regrettably there isn't any.
However, there are several web sites providing live text feeds of the
keynote.
This webpage should help you find a live text feed of the keynote:
http://uneasysilence.com/archive/2007/01/9115/
Regards,
Doug
-------------
Doug Hamilton, BA, MA, APP
Senior Computer Consultant
Computers-on-Campus; Univ. of Manitoba
204-474-6196 (Ph.)
204-474-7556 (Fax)
http://www.umanitoba.ca/bookstore/
Happy New Year, all. I hope you all had an enjoyable holiday season.
...on the note of "fun things", here's a link to a video done by
David Pogue, technology correspondent for the New York Times. It is
his quick over view of Microsoft VISTA:
http://video.on.nytimes.com/ifr_main.jsp?
nsid=a28ed9693:10fee2765a0:372&rf=bm&st=1167932755448&mp=FLV&cpf=false&f
vn=8&fr=051106_050849_3b99bbc2x10b250417a7x6442&rdm=100605.38635174709
(sorry for the long URL. Some of you may need to copy and paste it in
bits if it gets split across lines.)
Welcome back,
Wayne
While Apple has yet to officially responded with fixes for any of the
bugs exposed by this group:
http://projects.info-pull.com/moab/
An enterprising open-source developer has already begun the task of
fixing the bugs:
http://landonf.bikemonkey.org/code/macosx
As with any third-party software be sure to read and understand what
the software is going to potentially do to your system before you
install any of the "fixes" — particularly on a work system.
Regards,
Doug
-------------
Doug Hamilton, BA, MA, APP
Senior Computer Consultant
Computers-on-Campus; Univ. of Manitoba
204-474-6196 (Ph.)
204-474-7556 (Fax)
http://www.umanitoba.ca/bookstore/
...from:
http://www.cbc.ca/arts/story/2006/12/19/sony-rootkit.html
Last Updated: Tuesday, December 19, 2006 | 4:27 PM ET
CBC News
Sony BMG has settled two more lawsuits over CDs sold by the company
that included a hidden copy-protection program that opened their
computers to hackers and viruses. The company announced on Tuesday it
will pay $1.5 million US and pay thousands more in customer refunds
after settling lawsuits in California and Texas. The settlements come
months after Sony settled with Canadian consumers over the CDs
containing one of two types of copyright protection software —
MediaMax or XCP.
The copy protection software, called Extended Copy Protection or XCP,
is installed when the CD is put into a computer. The program uses a
technique called a rootkit to hide the fact that it is running,
making it more difficult to disable.
Security experts say the Sony program wasn't itself harmful. However,
the program remains active on the computer even when the CD isn't
being played and at least one computer virus has been written to hide
behind the same cloak.
The technology was also able to read and transmit IP addresses,
thereby identifying the user and sending personal information back to
Sony BMG.
Continue Article
Philippa Lawson, executive director of the Canadian Internet Policy
and Public Interest Clinic (CIPPIC), said in September the music
company could then use that information to go after illegal file-
sharers in Canada.
Three separate suits were filed in Canada. The first lawsuit,
affecting customers in every province except British Columbia and
Quebec, was settled in September. The other two provinces reached
settlements later in the year.
Under terms of the separate U.S. settlements, Sony will pay $750,000
to each of the states in civil penalties and costs and reimburse
customers whose computers were damaged during attempts to uninstall
the software.
"Companies that want to load their CDs with software that limits the
ability to copy music should fully inform consumers about it, not
hide it, and make sure it doesn't inflict security vulnerabilities on
computers," California Attorney General Bill Lockyer said in a
statement.
---------------------------------
...from:
http://www.cbc.ca/technology/story/2006/12/19/tech-
skypetrojanvirus-061219.html
Last Updated: Tuesday, December 19, 2006 | 12:40 PM ET
CBC News
Internet security company Websense Inc. on Tuesday said it had found
a password-stealing computer virus that spreads through the popular
Skype voice-over-internet protocol (VoIP) communications software.
The Trojan horse sends a message through the Skype Chat text-based
instant messaging tool and asks the recipient to download a file
named sp.exe. If a user complies, the virus downloads Skype
programming code and new versions of itself from the internet and
tries to steal passwords, Websense's security alert said.
A Trojan horse is a program that appears to perform one function in
order to hide a malicious one. Like the mythological Trojan horse
such programs are named after, the deception tricks people into
granting them access. But the risk posed by the Trojan does not stem
from any security flaw in Skype, Websense said, noting that the VoIP
program properly forces any attempts to gain access to it to be
authorized by the user.
"There is no vulnerability in Skype at this time that has been
uncovered," Websense's security alert said.
Websense said the sites that the Trojan uses to download the Skype
code and new versions of itself were offline on Tuesday.
The security firm first reported the threat on its security blog on
Monday but mistook the Trojan for a worm. A worm is a type of virus
that copies and spreads itself.
The initial infections appeared to be in the Asia-Pacific region,
particularly in South Korea, Websense said.
At the end of September, Skype had 136 million registered users
around the world.
Two security researchers (known as LMH and Kevin Finisterre) have
created a web site (http://projects.info-pull.com/moab/) where they
intend to publish "security flaws in different Apple software and
third-party applications designed for [the OS X] operating system".
Published so far are:
- for January 1, 2007: Apple's QuickTiime - A vulnerability exists
in the handling of the rtsp:// URL handler. This issue reportedly
affects QuickTime™ Version 7.1.3, Player Version 7.1.3. Previous
versions should be vulnerable as well. Both Microsoft Windows and Mac
OS X versions are affected.
- for January 2, 2007: VideoLAN's VLC Media Player: A format string
vulnerability exists in the handling of the udp:// URL handler. This
issue reportedly affects VLC for Mac OS X and Microsoft Windows.
- for January 3, 2007: so far no report has appeared on the site
The authors of the website describe their efforts this way:
"This initiative aims to serve as an effort to improve Mac OS
X, uncovering and finding security flaws in different Apple software
and third-party applications designed for this operating system. A
positive side-effect, probably, will be a more concerned (security-
wise) user-base and better practices from the management side of
Apple. Also, we want to develop and provide tools and documented
techniques to aid security research in this platform. If nothing
else, we had fun working on it and hope people-with-a-brain out there
will enjoy the results. "
Their FAQ page answers concerns about if the issues are being
reported to the vendor before public disclosure?
"Rarely, the point is releasing them without vendor
notification. Although, sometimes we may decide to pass an issue
through the appropriate people. The problem with so-called
'responsible disclosure' is that for some people, it means keeping
others on hold for insane amounts of time, even when the fix should
be trivial. And the reward (automated responses and euphemism-heavy
advisories) doesn't pay off in the end."
Finally, also on the FAQ page, they indicate they are not very
concerned about criticism of their efforts. In answer to the question
"John Doe has written a 'post' in his blog, saying he debunks the XXX
bug, what's that?", they reply, "No worries. It's probably someone
begging for attention or PR-brainwashed."
Apple's response so far? Apple spokesman Anuj Nayar said the company
always welcomes feedback on how to improve security on the Mac.