Are the people who buy AppleCare+ simply to go naked going to ruin it for everyone?

[Hal~9000]

I always see people on the forum saying "Go naked! Just buy AppleCare+ and do a replacement at the end of 2 years" instead of simply buying a case to protect their phone.

Apple recently increased the price of replacements from $49 to $79 per replacement. I assume that this was because Apple created AppleCare+ for a different reason (as insurance for when people genuinely damage their phone, and not simply for people to get a brand new replacement for cheap).

Since more and more people were simply buying it for reasons Apple didn't intend for (simply to go naked and get a replacement right before 2-years are up) and driving the cost up for Apple, they raised the replacement price.

It's kind of like car insurance, if everyone bought car insurance thinking "You know what? I'm just buying car insurance so that in two years time I can smash my car and get a brand new replacement!" then the cost would rise tremendously.

I'm curious though, when these people who simply buy AppleCare+ to go naked (knowing ahead of time they will get a replacement) cause the replacement prices to continue increasing, at what point would AppleCare+ become too expensive and no longer worth it for you?

 

[HiRez]

It's OK, it'll be balanced out by people like me, who bought a case to avoid getting AppleCare.

 

[SundayDuffer]

Case, screen protector, and AC. Thats how i roll.

 

[Hal~9000]

It's OK, it'll be balanced out by people like me, who bought a case to avoid getting AppleCare.

If you bought AppleCare+ and didn't end up using the replacement feature (simply took care of your phone in a case for the 2-years), THEN the free $99 Apple got from you would help balance out those that buy it ahead of of knowing they are just going to go naked, beat up their phone, and get a replacement before 2-years are up.

But if you didn't buy AppleCare+ at all though then it doesn't balance out anything.

Case, screen protector, and AC. Thats how i roll.

Yeah I would assume you are one of the good customers that Apple had in mind when creating AppleCare+, someone who simply buys it for an emergency but who probably won't end up using it since you protect your phone (instead of one of the replacement 'abusers').

 

[SundayDuffer]

This is why we need AC+
https://forums.macrumors.com/threads/1786731/

 

[Hal~9000]

This is why we need AC+
https://forums.macrumors.com/threads/1786731/

Yeah, in the above thread the OP was at least trying to protect their phone and would have had AppleCare+ simply for emergencies... but at what point do those who simply go naked (and pre-plan to get a replacement) drive up the cost of AppleCare+ to the point of not even being worth it anymore for others?

 

[roland.g]

Apple raised the replacement price over time because they could, not because too many people abused the system.

 

[Hal~9000]

Apple raised the replacement price over time because they could, not because too many people abused the system.

That's your opinion, not mine.

For me a company simply does things for profits, AppleCare+ is supposed to be a money maker for Apple. It's not a charity.

I believe that if Apple wasn't making enough because too many people were buying it to simply go naked and pre-planned to get a replacement (instead of customers simply protecting their phone with a case and having AppleCare+ for emergencies) then that's why they upped the price, and will continue to do so, to counteract the rising amount of people not 'abusing' the idea of AppleCare+ insurance.

 

[bakron1]

Nope, I have always purchased AppleCare plus and put a case on my device. I just like to take care of my phone.

I bought the leather Apple case for my new 6 and I seems to give me a better grip on the device.

 

[dumastudetto]

The problem with AppleCare+ insurance at the moment is it treats everyone equally. Pricing probably should be variable based on your past history, claims, and how risky you are as an individual - like most other insurance products. Those who rarely/never make claims should be rewarded with the ability to buy AppleCare+ for less than those who have made claims in the past.

Those who are purposely damaging devices are probably going to keep driving the costs up in future if Apple sticks with flat pricing.

 

[Hal~9000]

The problem with AppleCare+ insurance at the moment is it treats everyone equally. Pricing probably should be variable based on your past history, claims, and how risky you are as an individual - like most other insurance products. Those who rarely/never make claims should be rewarded with the ability to buy AppleCare+ for less than those who have made claims in the past.

Those who are purposely damaging devices are probably going to keep driving the costs up in future if Apple sticks with flat pricing.

Excellent idea

I think that would be great. I wish Apple would do this. I personally can't stand those who simply buy it just so they can go naked, smash their phone a day before their 2-year warranty is up, and get a new replacement for $80. Just seems very wasteful and self-centered (causing costs to rise for others by abusing the system) to me.

 

[Steve686]

Planned usage or unplanned usage of AppleCare+, ,makes no difference. Why?

Simply put, Apple has crunched the numbers on the cost of the phones, the cost of the AC+ program, the deductibles, and the overall financial burden they will absorb with every phone that we purchase.

It is also simply the cost of doing business balanced with making customers happy.

 

[Hal~9000]

Planned usage or unplanned usage of AppleCare+, ,makes no difference. Why?

Simply put, Apple has crunched the numbers on the cost of the phones, the cost of the AC+ program, the deductibles, and the overall financial burden they will absorb with every phone that they purchase.

If they "crunched the numbers" then they wouldn't have increased the replacement fee from $49 to $79 like they did before (and most likely will again, due to abuse).

It's hard to account for people not using insurance the correct way it was intended for. That goes for any insurance. When more people abuse the system, the more that costs have to keep rising for everyone to make up for it.

 

[Steve686]

If they "crunched the numbers" then they wouldn't have increased the replacement fee from $49 to $79 like they did before (and most likely will again due to abuse).

It's hard to account for people not using insurance the correct way it was intended for. That goes for any insurance. When more people abuse the system, the more that costs have to keep rising for everyone to make up for it.

You're way off base.

Have you checked the prices of outright replacement of the 6 series compared to the 5 series phones?

Or even just the screen replacement for that matter?

Understand. The phones are much larger with more materials used per phone. Of course they upped the price of AC+ to cover a higher cost of materials for replacements. <---Crunching numbers.

 

[AwareDen]

I bought AppleCare + and I intend on using my 6 plus naked since all the engineers made the effort to make the phone so slim etc.

I am not going out to purposely damage the phone buts it's a life line looking at then replacement prices (roughly £300) in the UK. The phones are more expensive so I can accept the price of AppleCare + has gone up.

Couldn't see why people might not do the same thing on any other mobile phone insurance.

Like anything though there will always be people looking to take advantage of such services.

 

[Steve686]

Quick example. From verified price info on the internet.

iPhone 5s 64gb retail: $849
Cost to build 5s 64gb: $218
Cost to OOW replace: $269
Cost to replace 1 AC+: $148($99+$49)
Cost to replace 2 AC+: $49($197)

With the margins of retail versus production, Apple is making well over $400 per phone after other costs associated with bringing the phone to market. Take into account that Apple uses refurbished parts for replacement phones, thus cutting down on the costs extensively.

 

[Hal~9000]

Quick example. From verified price info on the internet.

iPhone 5s 64gb retail: $849
Cost to build 5s 64gb: $218
Cost to OOW replace: $269
Cost to replace 1 AC+: $148($99+$49)
Cost to replace 2 AC+: $49($197)

With the margins of retail versus production, Apple is making well over $400 per phone after other costs associated with bringing the phone to market. Take into account that Apple uses refurbished parts for replacement phones, thus cutting down on the costs extensively.

64gb isn't the majority of customers though, 16gb ($650) is.

A 16gb iPhone 5s costs $207 in parts according to online analysts. That doesn't take into account the R&D, logistics, retail store, refurbished parts for an AppleCare+ replacement, or employee costs.

Of course we have no idea what all of that ends up being... but I think people buying AppleCare+ with the intention of smashing & replacing end up cutting into the profits (thus causing Apple to raise prices on AppleCare+ further).

It's not about needing to simply make any amount of profit on each phone, it's that Apple has a certain # in mind that it needs to reach, and that as people who abuse the insurance system increase in numbers & end up costing some of that profit (leading to AppleCare+ prices increases for everyone).

 

[Steve686]

64gb isn't the majority of customers though, 16gb ($650) is.

A 16gb iPhone 5s costs $207 in parts according to online analysts. That doesn't take into account the R&D, logistics, retail store, refurbished parts for an AppleCare+ replacement, or employee costs.

Of course we have no idea what all of that ends up being... but I think people buying AppleCare+ with the intention of smashing & replacing end up cutting into the profits (thus causing Apple to raise prices on AppleCare+ further).

It's not about needing to simply make any amount of profit on each phone, it's that Apple has a certain # in mind that it needs to reach, and that as people who abuse the insurance system increase in numbers & end up costing some of that profit (leading to AppleCare+ prices increases for everyone).

AppleCare + incidence cost went from $49 to $79. + $30. 5s AC+ replacement is $269. 6 replacement is $299-$329. Simple math. Cost was raised to account for a jump in price. Period.

Anyone complaining about paying $79 to replace a $700-$950 phone after buying AC+ is just not seeing that the prices are in line with costs. Not abuse. This is why you are allowed 2 instances of coverage.

And please note, I said "Quick Example". Not EVERY phone.

 

[realeric]

No coverage is always cheaper than AppleCare+. If screen is damaged,

(no damage, 1st, 2nd, 3rd, 4th)(+tax)
No coverage: $0, $110, $220, $330, $440
AppleCare+: $100, $180, $260, $370, $480

AppleCare+ covers aluminum case and other parts but chances are few.

 

[Hal~9000]

AppleCare + incidence cost went from $49 to $79. + $30. 5s AC+ replacement is $269. 6 replacement is $299-$329. Simple math. Cost was raised to account for a jump in price. Period.

Anyone complaining about paying $79 to replace a $700-$950 phone after buying AC+ is just not seeing that the prices are in line with costs. Not abuse. This is why you are allowed 2 instances of coverage.

And please note, I said "Quick Example". Not EVERY phone.

At the moment I'm too tired to come up with a proper response (4am here), but before I go to sleep I just wanted to say thank you Steve for your time / thoughtful responses so far and the healthy debate

 

[Steve686]

At the moment I'm too tired to come up with a proper response (4am here), but before I go to sleep I just wanted to say thank you Steve for your time / thoughtful responses so far and the healthy debate

Always a pleasure to work the mind. Good night.

 

[lke]

Apple raised the replacement price over time because they could, not because too many people abused the system.

I think the same, apple always think on how to make more money.

For example the prices of icloud space are too expensive, if they reduced the prices considerably they will get more customers, but they always charge too much for everything

 

[leenak]

I have a case for my phone. I am considering getting applecare. I like to have colorful phones, maybe if I had a 6c, then I wouldn't have a case. I also am pretty clumsy though and I dropped my iphone 5 dozens of times. I expect I'll be dropping my 6 too although the case for my 6 is grippier than my 5 case was.

 

[phillytim]

THIS. I completely agree. I can't shake the feeling that people who so proudly proclaim that they "go naked" with their iPhones are driving up the costs for the rest of us, by being so careless as to not take care of their phones.

The problem with AppleCare+ insurance at the moment is it treats everyone equally. Pricing probably should be variable based on your past history, claims, and how risky you are as an individual - like most other insurance products. Those who rarely/never make claims should be rewarded with the ability to buy AppleCare+ for less than those who have made claims in the past.

Those who are purposely damaging devices are probably going to keep driving the costs up in future if Apple sticks with flat pricing.

 

[macbd]

I'm a little confused based on some of the posts here and Apple's web site.
If you have AppleCare+ on a 6 Plus, it says the replacement cost is $79 (up to two times). But then on another page I see that a screen replacement cost for a 6 Plus is $129.
If my screen/glass on my 6 Plus is damaged and I have AppleCare+ do I pay $79 or $129?