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$200 per year plus $30 per repair is still a lot. How often do you smash your phone?

Generally insurance is never positive-EV for the buyer unless peace of mind is considered, and to that I say, it's cheaper to find peace with the risk of breaking your phone.

> How often do you smash your phone?

So little that the 1 time it could happen in the 2 years of AppleCare makes it pay for itself.

Once every 2 years is kind of a lot.

I think you are forgetting about everyone who pays for "Peace of Mind" and never breaks their phone.

So far, not buying AC+ has had better amortized cost for me.

Until it doesn't. I also gamble with this because I've never damaged my phone ever and I've had an iPhone since the OG. I'm not under any delusion, though, that this streak will last forever. I think I would currently need to damage/replace my phone twice to come out in the negative but that's still a possibility. I've been extremely careful and/or lucky.

I damage my phone every couple of years. So it happens, but not frequently enough to warrant AC+.

That doesn't mean that everyone has the same experience as you, though. All it takes is for you to damage your device 1 more time than usual for it to be worth it.

Yeah but Apple has probably found that on average the insurance isn't worth buying, otherwise they wouldn't offer it at this price. I guess it's worth buying if you know you're gonna break your phone even more frequently than the average AppleCare+ user does (which is likely more than the average iPhone user), but those $30 fees and the waiting time to repair a phone aren't free.

AppleCare has always been a loss for Apple. The entire repair division is a loss for them. They don't make a profit from repairs. This update is partially marketing spin but, for a lot of users, it was worth buying before and is now even more of a value. If you look at the things that Apple prioritizes, they want to disincentivize self-repair because any quality variations reflect on them whether they did the repair or not.

Do you have a source for this? AppleCare+ for a MacBook Air is $250. You can get a 4 year 3rd party extended warranty for a similarly priced laptop off Amazon for $170. Presumably they make money off this but don't have advantages that Apple does like at cost repair parts.

Are Apple products such garbage or so hard to repair that shorter more expensive warranties lose money? Seriously?

Yes. You can look at every earnings statement they've released for the last 10 years or so. There are also articles that made a stink about it a while ago. Here's one but there are plenty more like it: https://appleinsider.com/articles/19/11/20/apple-says-repair...

3rd party extended warranties don't work the same way as the repair program. With a 3rd party warranty, they don't have to fix it with an equal part and they can also swap out the machine for a refurbished one.

A swap sounds like it'd cost them more than it costs Apple to repair it.

Not if they're swapping with a machine that they refurbished. They can keep swapping them ad infinitum. That's what Asurion does with cell phone warranty claims. You pay a $150 deductible and you get a refurbished phone in exchange. They fix the part that was broken on your phone that you're returning to them and it gets refurbed to the next person.

That just makes it faster. They still have to repair it either way.

Yes, but they don't have to use genuine Apple parts or verify any of it through Apple's services. With Apple's repairs, they disassemble the devices and re-use the parts for service. With these third parties, they don't have to use parts that are at parity with the originals.

Admittedly this is anecdata, but here’s my take:

I’ve been a Mac service technician at an Apple Store for almost a decade. I’ve had an extremely competitive wage for the entire time vs other jobs of this level, I get RSUs, and a very comprehensive benefits package even though I’m currently part-time. me and my team are expensive for what we are (essentially, just retail workers).

The majority of appointments I take on the Genius Bar in a day have no charge; software/iCloud issues, data migrations, or just how-to questions are free and unlimited. Most, though certainly not all, repairs are done in warranty.

Yes, repairs are often expensive, but when I think about the daily operating costs and salaries of my entire team vs how much revenue we bring in per paid repair transaction, I can’t see how repair costs & AC sales cover even half of it. That’s to say nothing of the extremely busy call centres that Apple waived the per-call fees for over five years ago.

Take that for what it’s worth, but when you see how much traffic flows to and from the Genius Bar every day with no money ever changing hands, it would take a lot to convince me that AC is a profit centre, and not a huge loss leader.

I don't buy that Apple repairs are a loss given that third-party repairs can still be profitable at lower prices, but even if they are, it doesn't mean AppleCare is a loss vs making users pay per repair.

Here you go: https://appleinsider.com/articles/19/11/20/apple-says-repair...

It's not clear there what counts towards the revenue and towards costs, since third-party repair shops are involved. I want to know if one user taking a phone to Apple for repair costs them more than the user pays, and they don't really say, nor is it a simple answer with all the fixed costs and shared resources involved (like, stores have footprints, and geniuses do other stuff too). Third-party repair shops are a much simpler situation since they only repair stuff, and at moderate scale. They're somehow profitable on their own, unless Apple is subsidizing them.

Also, the title is from Apple's PR in one of those congressional hearings where they're responding to (often over-simplified) complaints of anti-competitive behavior. It's going to be spun like none other. Apple also claims a way higher effective tax rate in Europe than what they're regularly accused of, and calculated some way they're probably technically correct.

Surely those responses would be under such intense scrutiny, from several different angles, to say that it's simply nonsense being spun to its maximum.

It’s exactly my point that everyone has to make their own decision based on their risk profile. It’s far from a clear case that AC+ always makes sense.

Then, in that case, I agree. I just felt like you were downplaying the number of people that actually do benefit from it and would benefit more with the recent change.

I don't know, the amount of people who aren't tech savvy that I know who contact me because they know I'm tech savvy tells me that a lot more "normal people" can find advantages in AC+ than us tech savvy people who take better care of our devices.

I know since meeting my gf who is tech dumb, my device is more beaten up than it ever had been before due to just her using it randomly here and there.

This is my experience as well. As I've stated elsewhere, I've never needed to use an AppleCare repair myself but I know at least 5 people that have had multiple repairs done within a single year.

Unless the average "tech dumb" person is throwing things at walls out of frustration, I don't see why that would mean more damage.

I can be very careful with something I don't understand, and I can be reckless with something I do understand.

It's definitely easy to imagine breaking even if you have the more expensive "AppleCare+ with Theft and Loss" plan where you can replace your phone twice a year for a $149 deductible.

Same, I use a case and do my own repairs when stuff breaks

In 13 years of using smartphones, I've needed exactly one out-of-warranty screen repair. And I don't even use a case. Not buying AppleCare+ has definitely saved me money.

I can't see how Apple really loses money on this move unless people just start throwing their $1,000 pocket computers on the ground.

Maybe not for iphones, but macbooks have a habit of dying on me. My 10 day old macbook pro's logic board died and the replacement new macbook's palm rest started giving clicking sound within 10 days again. How can i be so unlucky. Apple certainly is overlooking QC with macbooks.

I qualified my statement with "out of warranty". I have had to take <12 month old devices that had defects crop up and have them repaired, but those repairs were free and did not require me to have AppleCare+.

A logic board randomly dying 10 days after purchase would certainly be covered under the factory warranty.

What I wanted to convey with the extreme examples was that macbooks die more often due to QC issue or something. They have died after the first year of warranty thrice on me.

Due to this it is certainly mandatory to buy applecare+ for macbooks. I have not used iphones after the 5s so can't comment on that but it seems they have less problem than Macs.

Most people surely are not going to use it so how is it going to be a loss? Do people actually break their iphones every year?

Apple Care only costs $200 per phone. One person replacing a $1,000 phone wipes out five people's worth of revenue.

Phones are automatically dismounted in a special factory. It doesn’t cost $1000.

It doesn't cost Apple $1000 to make a new phone, but they miss out on $1000 of revenue if that person would otherwise buy a new iPhone.

But maybe the person doesn't buy a new one. The cost of the consumer replacing a years-old iPhone is the used price. Personally I would never buy a used iPhone from eBay or something anymore, since there are too many gotchas with SIM locking and whatnot, but Apple also sells older models at a discounted price.

You can even pay it monthly, which probably costs $9.99 per month. Anecdote: I was on my seventh monthly payment when I accidentally smashed unassembled IKEA furniture on my phone at an IKEA store and broke the entire back glass and cameras. The technician noticed small cracks on the screen too that didn't actually bother me, but bothered him enough to swap the entire device.

$1000 is the retail price. It costs less for Apple to give a replacement.

Commercial repairmen are already pretty quick with repairs, if this make repairs easier, they will make more money as well.

Hmm, my apple care for iPhone is $6/mo. So it’s just $72/year not $200