For awhile in 2009 and 2010 I read nearly every "Time Capsule" post here, and read all about the TC failures here and elsewhere, because I own one of the first-gen TCs. I don't have any links anymore and can't offer any solid evidence, but I'll offer you my conclusions, for what they're worth:
TC failures
were unusually common among the 1st-generation TCs. Many would work fine for 12 - 20 months. Then they would fail to power up. No lights would come on. Others never had a problem (mine included).
The most technical, credible, consistent reports have convinced me that
the common problem was a failed power supply, not a failure of the hard drive itself (the data was still there, uncorrupted). Specifically, the problem was the failure of specific "low-quality" or defective capacitors in the internal power supply of the TC. The capacitors would bulge or even open up.
Some people replaced the capacitors. Some people connected up an external power supply, bypassing the internal PS. Both methods could work.
Many people were able to get their data off of the hard drives by removing them and using a SATA dock or spare SATA connector on a computer.
Apple published a range of serial numbers of "problem" units, and offered to replace the units if/when they failed, for (I think) a period of three years after purchase date. Apple also offered to transfer your data to the replacement unit if you were willing to send the unit away.
Many, many people blamed the problem on excessive heat build-up inside the unit, and I conclude that heat may well have caused the bad capacitors to fail. However, many, many people claim that the design is
still fatally flawed -- by poor fan and cooling design, or just by having the PS internal at all -- and that such "heat build-up" problems are inevitable. This I disagree with because...
Apple hasn't changed the
overall design since it was introduced in 2008. One would think it would have been pretty easy for Apple to change the fans, unit size, or power supply location if any of them were causing a massive failure rate, and Apple did not make such changes. (I think Apple did make some relatively minor changes in the internal layout, though, and obviously has changed the drives used.)
More importantly, 2nd-gen TCs and later appear
not to be failing with the same frequency or a common problem. The few posts I read about newer TC failing were unconvincing due to lack of details or obviously different failure mode (like a simple hard drive failure). There didn't seem to be a solid
pattern with the later gens, even well after the infamous "18-month" age.
Anyway, those are just my conclusions. But, when
worrying about a TC failure keep in mind:
You should never lose any data, because any data on the TC should also exist somewhere else, and as
Lancer pointed out, the chance of both locations failing at the same time is small enough that nearly all consumers can ignore it. If you use your TC to back up your Macs, the data it holds is only a copy; or, if you put other files on the TC (a whole 'nother topic), common sense says you need to back those files up somewhere else (another drive, "the cloud", etc). In any case you shouldn't lose data if a TC "dies", although I know some posters here have complained bitterly that they "lost their data".
As I said, historically it was the TC enclosure that failed, not the drive. The data was still recoverable fairly easily. That's a hassle, but any enclosure can fail for numerous reasons, and they do.
Of course, no one wants to buy a device which is likely to fail. I think the biggest risk is the money you spend on it -- you don't want to lose that investment or pay a bunch more for repairs or replacement. My
claim is that a new TC is no more likely to fail than a typical external drive or other electronic device.
I apologize for my wordiness and I hope this didn't sound too "preachy". I guess I'll take the risk and post it anyway...
