From my own experience, for an iPhone 4 I had for about 18 months, it ended up being a worthwhile purchase. When IOS 5 was released I set about updating my phone. After the software downloaded and the update began, suddenly I received a message that the update couldn't be completed at this time, and my phone was bricked. I took it into the Genius Bar, and they tried to do a restore, but it wouldn't even show up as a device. Long story short, the replaced the phone and sent me on my way. Apple Care definitely ended up being a worthwhile purchase. My wife also had her iPhone 3 replaced under Apple Care, good thing too as the replacement lasted her 3 years until the iPhone 4S came out. She wasn't going to go for the 4 <g>