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The Applecare Hustle

basicappleguy.com

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Re: The Applecare Hustle

#31

Post by BurritoAlPastor »

ksec wrote: post #23
pbourke wrote: post #13

My last phone was replaced once and my current one has been replaced twice, both under AppleCare. I view AC as “phone as a service”, which is reasonable. The recent option to add accidental drop and theft coverage onto the base AppleCare seems to be making that explicit. I’d like to always have a phone and have it be replaced quickly if it goes kaput.

> I view AC as “phone as a service”, which is reasonable. They really should have done this with their Services Strategy, not trying to push Apple Music, TV, App Store etc.

They did; it’s called the iPhone Upgrade Program.

Re: The Applecare Hustle

#32

Post by TheSpiceIsLife »

moksly wrote: post #20
mehwoot wrote: post #5

In contrast, the insured often relies on a recollection of their history and a ton of emotional reasoning to decide if they will be the statistical oddity to make "a profit" of having bought insurance. This isn't generally the point of insurance. The point of insurance is to amortise risk. Yes, the insurance company expects to, on average, get more money from insuring my house than the cost of any damage to it. But i…

I’m not sure if this is a Danish thing, but here you can add an electronic appliance insurance to your regular “indboforsikring” which is the policy form that covers your home and all the shit in it. They come in various forms, but mine covers anything from throwing a wii controller into a TV to losing your laptop in a bag or having it stolen. It also covers all family members and is $80 a year. It does require you t…

Also common in Australia, part of what we call Home contents insurance”, which covers all the items in side* your home and is seperate from the building insurance itself.

Here, too, some more expensive items and personal electronic devices (phones, laptops) are not part of the basic home contents insurance policy options but can be added for a small additional annual fee similar to what you have indicted, and they’ll usually want to know if any of those devices or items exceeds a specific value ($2000 last time I checked) and lost them on the policy.

Re: The Applecare Hustle

#33

Post by cr1895 »

crazygringo wrote: post #6
Hamuko wrote: post #2

This seems crazy expensive. $2,097 in the span of three years? My home insurance is merely about 130 € per year and covers all of the accidental damage to all Apple (and all other) products in my home. Granted, the deductible is 150 €, so I'd only be able to get the screen repair of my Apple Watch down to 150 € (instead of $99), but it seems like hell of a lot better option than buying AppleCare.

How on earth is home insurance so cheap in the UK? In the US, the average policy is around $1,500/yr, the deductible is $500-$2,500, and your rates will go up the more claims you make -- so obviously nobody uses it for a damaged phone. I'm baffled by how UK insurers could possibly turn a profit on insurance... if people were filing a claim for every piece of technology they owned every time they accidentally damaged…

I doubt they’re in the UK…they mentioned euros and not pounds. Perhaps it is renter’s insurance? For me in the Netherlands that’s only €12 or something per month.

Re: The Applecare Hustle

#34

Post by AnthonyMouse »

beagle3 wrote: post #22
AnthonyMouse wrote: post #8

Earlier quoted context omitted.

> What apple charges for repairs almost definitely has markup, so it's possible that they can provide insurance that averages out below the expected "cost" of repairs but still makes apple money. For them to make money from offering the insurance, it would have to be a gain over their alternative of you not having the insurance and then paying them to repair the device if it breaks. They also have to be making enough…

But when your iDevice breaks, you don’t necessarily go to Apple to fix it. Increasingly more, yes, but iPhone screen and battery replacements on the cheap are common where I live (compared to Apple costs). Mac repairs aren’t anymore, but non-Applecared people might switch off the Apple platform if the cost to repair is too high. It’s possible that AppleCare is a win for both Apple (customer retention) and the custome…

> But when your iDevice breaks, you don’t necessarily go to Apple to fix it.

Now you're making the case for not buying the insurance because you have a way of paying less for the repairs out of pocket which makes the insurance less valuable.

> It’s possible that AppleCare is a win for both Apple (customer retention) and the customer (lower cost to stay within favorite ecosystem) because it is NOT a zero sum game between them - there are many other players in the game.

The theory being that if you pay out of pocket to Apple they have a $100 margin, but if you pay out of pocket to an independent repair shop they have a $10 margin, and Apple would profit from selling you the insurance by transferring that $10 profit from the independent repair shop to themselves.

By this logic they should also have lowered the price of their repair service to be price competitive with the independent one because then they would get more repair business and attract customers to their ecosystem by having lower repair costs. But they evidently prefer to have higher margins.

And claiming the independent repair shop's margins, evidently only in the case of the insurance and not for actual out of pocket repairs for unknown reasons, would only be possible if the independent shop's margins are larger than the cost of the moral hazard and all other administrative overhead of offering the insurance. But their margins are very slim.

Re: The Applecare Hustle

#35

Post by ksec »

doublepg23 wrote: post #21
ed25519FUUU wrote: post #15

> 2021: Dropped, broken screen (365$ repair down to $0 under AppleCare) iPhone screen repairs cost almost $400??

OLED screens are still surprisingly expensive IME, especially at the high quality Apple procures. It's $200 for a modern iPhone screen itself on eBay, and adding labor plus Apple tax it doesn't seem that insane.

>OLED screens are still surprisingly expensive IME

OLED has actually been cheaper than LCD since 2020 for Mobile Display Panel at the same PPI. Even at it peak ( iPhone X ) including glass it wouldn't cost Apple more than $120. Right now it down close to $80. Mostly because Apple insist on using flexible display and how they blend the notch.

There are plenty more OLED cost optimisation coming in the next 10 years.

Re: The Applecare Hustle

#36

Post by ksec »

BurritoAlPastor wrote: post #31
ksec wrote: post #23

Earlier quoted context omitted.

> I view AC as “phone as a service”, which is reasonable. They really should have done this with their Services Strategy, not trying to push Apple Music, TV, App Store etc.

They did; it’s called the iPhone Upgrade Program.

Only in selected countries though. And mostly pushed in US and not anywhere else.

Re: The Applecare Hustle

#37

Post by xvector »

lilyball wrote: post #9
mehwoot wrote: post #5

In contrast, the insured often relies on a recollection of their history and a ton of emotional reasoning to decide if they will be the statistical oddity to make "a profit" of having bought insurance. This isn't generally the point of insurance. The point of insurance is to amortise risk. Yes, the insurance company expects to, on average, get more money from insuring my house than the cost of any damage to it. But i…

Don’t forget insurance prices are also tailored to your particular risk as much as the insurance company can figure out how. Meanwhile, AppleCare is the same fee for everyone. So for you, your risk model might say that AppleCare isn’t worth it. But for someone else who has a much higher risk of accidental damage (for example, parents of young kids) AppleCare might be a far better value proposition.

I just view AppleCare as the price of using my phone without a case, the way it was meant to be used.

Re: The Applecare Hustle

#38

Post by oefrha »

ksec wrote: post #36
BurritoAlPastor wrote: post #31

Earlier quoted context omitted.

They did; it’s called the iPhone Upgrade Program.

Only in selected countries though. And mostly pushed in US and not anywhere else.

Huh, TIL it's only available in US, UK and China. I wonder what's the barrier elsewhere.

Re: The Applecare Hustle

#39

Post by oefrha »

ssivark wrote: post #4

1. Is this much repair indicative of abnormal use, or are Apple products not really robustly designed? 2. Why are repairs so damn expensive? Several hundred dollars each to repair a scratched screen or replace a torn earcup fabric!?!?!?!?

> replace a torn earcup fabric

I'm generally happy with Apple products, but Beats products specifically have very poor build quality, and from talking to genius bar employees when mine were broken, "repairing" broken headband/earcup/etc. = giving you a new one. I don't touch anything Beats now.

Re: The Applecare Hustle

#40

Post by echelon »

choeger wrote: post #27
lobochrome wrote: post #11

I remember a course on game theory at business school where we proved all insurance to be non-optimal. There were two ways to deal with catastrophic risk if I recall correctly, depending on the gain function: a) if catastrophic risk is infinite - no premium will be acceptable due to price. b) if catastrophic risk is discrete - it is optimal not to insure since the expected loss is ruinous anyways. Led me to be highly…

There are certain risks you simply cannot pay out-of-pocket: Car accidents (my car is insured to 20M in damages p.p.), house destruction (you usually already have one mortgage), or inability to work in your profession (e.g., by becoming blind). The former cases are so expensive you cannot expect to save money or take a loan and pay off the damages. The latter case impacts your ability to earn money in the first place…

> my car is insured to 20M in damages p.p.

How much does that policy cost?

Are you hedging against running into a gas pipeline, school bus full of children, or something along those lines?

I'm honestly really curious about this.

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