Apple's Original Sin, Down Under
File this under "Don't take everything you hear from Apple (NAS: AAPL) as gospel." An Australian federal judge ruled that Apple potentially mislead Australian consumers by marketing its new iPad as"Wi-Fi + 4G." Unfortunately for those consumers and for Apple, that claim just doesn't hold water, at least in Australia.
The new iPad may be compatible with 4G LTE networks in the U.S. and Canada, but it certainly wasn't friendly with Australia's first LTE roll-out, a network built by Telstra.
Apple's no-no, according to Judge Mordecai Bromberg, will cost the company $2.29 million in fines, plus $300,000 towards the Australian Competition & Consumer Commission's legal costs. Apple has also agreed to put a clarification on its website that the new iPad is not compatible with Telstra's LTE network.
What did you know, and when did you know it?
The judge said that, despite knowing that the new iPad was not compatible with Telstra's LTE network at least as far back as March, Apple did not stop marketing it as "Wi-Fi + 4G" until the middle of May. That, said the judge, displayed the "controlling hand of Apple Inc."
Okay, $2.6 million won't take much of a bite out Apple's balance sheet, but having to provide a refund to the -- according to the judge -- "very substantial" numbers of early iPad purchasers, could be much costlier. The actual number of sales couldn't be disclosed, but there was no doubt that "many purchasers will have felt decidedly short-changed," according to the judge.
"Apple does not seek to deny the deliberateness of its conduct and there are no facts before me which seek to excuse or explain the conduct, other than that the conduct occurred at the behest of Apple's parent company," read Judge Bromberg's judgment.
Apple now claims the new iPad is merely "Wi-Fi + Cellular" in Australian marketing. If 3G speeds just won't cut it for you, mate, put that new iPad on the barbie. But don't despair. Samsung's Galaxy Tab 8.9 can handle the Down Under's LTE network.
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