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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 marke

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.

goosedragons 4y ago
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?
- dkonofalski 4y ago
  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-repairs-cost-more-than-they-earn-in-charges https://appleinsider.com/articles/19/11/20/apple-says-repair...
- dkonofalski 4y ago
  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.
  - hot_gril 4y ago
    A swap sounds like it'd cost them more than it costs Apple to repair it.
    - dkonofalski 4y ago
      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.
      - hot_gril 4y ago
        That just makes it faster. They still have to repair it either way.
        dkonofalski 4y ago
        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.
- hoorible 4y ago
  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.
hot_gril 4y ago
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.
- dkonofalski 4y ago
  Here you go: https://appleinsider.com/articles/19/11/20/apple-says-repairs-cost-more-than-they-earn-in-charges https://appleinsider.com/articles/19/11/20/apple-says-repair...
  - hot_gril 4y ago
    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.
    - dkonofalski 4y ago
      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.

goosedragons 4y ago

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?

dkonofalski 4y ago
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-repairs-cost-more-than-they-earn-in-charges https://appleinsider.com/articles/19/11/20/apple-says-repair...
dkonofalski 4y ago
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.
- hot_gril 4y ago
  A swap sounds like it'd cost them more than it costs Apple to repair it.
  - dkonofalski 4y ago
    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.
    - hot_gril 4y ago
      That just makes it faster. They still have to repair it either way.
      - dkonofalski 4y ago
        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.
hoorible 4y ago
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.

hot_gril 4y ago

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.

dkonofalski 4y ago
Here you go: https://appleinsider.com/articles/19/11/20/apple-says-repairs-cost-more-than-they-earn-in-charges https://appleinsider.com/articles/19/11/20/apple-says-repair...
- hot_gril 4y ago
  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.
  - dkonofalski 4y ago
    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.