Why AppleCare+ is still not worth it

Thinking of getting AppleCare+ for your next iPhone? Think again.

Back in 2014, I strongly recommended against AppleCare+. Following my own advice, I skipped getting it when I upgraded to an iPhone 6s this past fall.

Last month, my decision collided with a worst-case-scenario accident to my phone. This gave me a “real-life” opportunity to assess the financial wisdom of my choice. As it turned out, the accident, while unfortunate, only served to reinforce that I had chosen wisely.

At the time, I had no protective case on my iPhone (a decision I made for aesthetic reasons). While the wisdom of “going naked” can be debated, that’s a separate matter from the AppleCare+ one.

On the fateful day, while taking the iPhone out of my pocket, it slipped through my hand and dropped to a concrete sidewalk. Upon examining the phone, I was relieved to see that the screen was still intact and all functions were working. I had dodged a bullet. Or so I thought.

I was wrong. A day later, I noticed that the protruding sapphire cover over the camera lens, that little piece that annoyingly sticks out from the back of the phone, had cracked. I could still take photos but, under many lighting conditions, the crack resulted in significant flaring visible in photos. Not good. I immediately made an appointment with the Genius Bar at my local Apple Store to see what could be done.

As I had anticipated, the news was bad. The Apple Genius informed me that, despite what might seem minimal damage, there was no way to repair it. My only option was to get a replacement phone. As accidental damage is not covered by the standard warranty (which was still in effect, as my iPhone was less than a year old), the replacement would cost me $300.

Ugh! Feeling that I didn’t have much choice, I handed over the cash and walked out with a new iPhone. As a bonus, the employee threw in a case for free.

At this point, I can hear at least some readers chiding: “Hah! Now I bet you wish you had purchased AppleCare+.”

Nope. While I wasn’t happy to shell out $300, I did so knowing that I was still ahead of the game. How so? Here’s how:

AppleCare+ for the iPhone 6s costs $129. Even had I paid for this coverage, I would still have to pay an additional $99 (accident coverage service fee) to get a replacement phone. That adds up to $228. In other words, ignoring any sales tax issues, not having AppleCare+ cost me only $72.

“Okay,” you may counter, “You didn’t lose $300. But you still lost $72. That’s still a loss. Doesn’t that make AppleCare+ worth getting in the end?”

The answer remains no. That’s because assessing my true cost involves more than simply looking at this incident in isolation. The question is not: “Would AppleCare+ have saved me money this one time?” Rather it is: “Does getting AppleCare+ save me money in the long run?” This requires estimating how often I expect to to damage my iPhone over the course of several years. This can be tricky to determine, as it involves making probability judgments. Just as with predicting election results, there is a margin of error involved. Still, reasonable judgments can be made.

For the sake of argument, let’s say I get a new iPhone every two years. Let’s also say that I expect to damage my phone once every 4 years on average. [In reality, I’m more careful than that. In fact, prior to this incident, I’d never had any accidental damage to any of my iPhones — going back to 2007. So I’m actually stacking the numbers against me here.] Assuming I get AppleCare+ during this four year period, I will have paid $129 x 2 (for AppleCare+ for each phone) and $99 for the damage replacement phone — for a total of $357. That’s $57 more than if I had skipped AppleCare+ and just paid the $300 for a lone replacement. [Note: If all you need is a screen repair, rather than a replacement phone, the downside of AppleCare+ is even greater.]

In my particular case, given that I had never purchased AppleCare for any of my iPhones and that this was the first time I ever paid for a replacement iPhone, I was clearly way ahead of the game — by much more than $57.

Moving beyond the cost of damage replacement…

AppleCare+ does add a second year of standard warranty coverage (the first year is included with your iPhone, even without AppleCare+). However, I contend that this is almost worthless — as iPhones very rarely need non-accident-related repairs in the second year. Further, if you’re the type of person that gets a new iPhone every year, the second year of standard coverage is entirely irrelevant.

AppleCare+ also extends the period for free telephone support. However, I again contend this is not of great consequence for most people, given the availability of free online and Genius Bar support.

Finally, there’s Apple’s new iPhone Upgrade Program. This is designed especially for people who want to get a new iPhone every year, trading in their old one. The cost of the program includes paying $129 for AppleCare+, spread over installments. Solely in terms of the standard warranty, the iPhone Upgrade Program is a terrible idea. As you’re getting a new iPhone every year, you never get the benefit of the extended second year of coverage. With this program, the only rationale for AppleCare+ is for its accident protection. Here’s where it gets interesting: Unique to this program, Apple doesn’t charge $129 for AppleCare+ each year — even though you’re getting a new iPhone annually. You only pay once every two years. In contrast, if you instead purchased a new iPhone with AppleCare+ every year from a carrier (such as AT&T or Verizon), you’d pay $129 each year.

Regardless, under the Upgrade Program, the calculations regarding accident damage remain exactly as described above. Over 4 years, you will have paid $64.50 x 4, or $258, for AppleCare+. If you only damage your iPhone once during this 4 year period (for a cost of another $99 to replace the phone), you still lose $57 by getting AppleCare+. If you get AppleCare+ from a carrier, and thus pay $129 each year, the disadvantage of AppleCare+ becomes much worse. So the best I can say here is that, if you plan to get a new iPhone every year and insist on getting AppleCare+, get it via Apple’s iPhone Upgrade Program.

Bottom line

The above calculations were based on my personal history. Given my track record, assuming that I would need to replace an accidentally damaged iPhone no more than once every 4 years was a reasonable one. And it meant that getting AppleCare+ was a poor financial decision.

Your mileage may vary. What if your personal history suggests that you are likely to need to replace a damaged iPhone about once a year? In this case, AppleCare+ will work out to your advantage. However, you might instead work on out how to take better care of your iPhone so it doesn’t get damaged as often.

At a minimum, all of this means you should not automatically assume that AppleCare+ is worthwhile. Before making a decision, consider your track record. Unless you are accident-prone, AppleCare+ is a bad deal. You’ll wind up paying more for the insurance than you would spend on non-insured repairs. And the more years you go without any accident, the more you save by skipping AppleCare+.

Of course, in the end, you’re taking a gamble no matter what you do. You place a bet based on what you expect to happen in the future. If you guess wrong, you lose. For some, the peace of mind obtained by getting AppleCare+ may be worth it, even if you are more likely to lose money by doing so. However, if you are willing to take a small risk, I contend that the long-run odds most often favor a win if you skip AppleCare+. It has certainly worked that way for me. Having to shell out $300 for a replacement phone last month did not change that.

Posted in Apple Inc, iPad, iPhone, Technology | 2 Comments

Secure your data before selling your iOS device or Mac

Before I listed my iPad for sale on craigslist.com last month, I thought I knew what to do. My number one concern was security. More specifically, ensuring that all personal data had been removed from the device and all links between the device and any cloud services had been severed.

To that end, I restored the iPad to its factory settings. I decided not to use the “Erase All Content and Settings” option (from the Settings>General>Reset screen on the iPad). Instead, I elected to use “Restore iPad…” from iTunes on my Mac. Somehow, it seemed superior, although both methods are supposedly sufficient to do the job. And that was basically it. I didn’t think there was anything else I needed to do.

In the end, I was probably right; a Restore (or Erase all) was all I needed to do. None of my data was ever at risk. However, subsequent to selling my iPad, I stumbled across several Apple support articles that made me a bit nervous on this count. It seemed there were recommended actions that I did not take. How critical were they? Did I need to do anything about this now? Could I do anything about this now? Or was I stuck trying to close the proverbial barn door after the horses have left?

Let’s find out…

The iPad

Apple’s key article is “What to do before selling or giving away your iPhone, iPad, or iPod touch.” In general, the article confirmed my faith that restoring the iPad was all I needed to do. Major hassles only involved cases where you sell your device without erasing. In such cases, you can find yourself forced into taking progressively more and more desperate measures as you attempt to protect your data. In one worst case scenario, you may need to change your Apple ID password — to at least protect your cloud-based data, if not data on the device itself. But this was not my situation.

However, the article did list some things to consider doing before erasing/restoring the device.

First, turn off Find My iPhone, if enabled. Fortunately, at least in my experience, you can’t erase/restore an iOS device until this is done. So it’s hard to skip this step. I certainly didn’t.

Second, if you are selling an iPhone and you have an Apple Watch, unpair the Watch before erasing the iPhone. This ensures that Activation Lock has been disabled for the Apple Watch. As I had sold an iPad, not an iPhone, this didn’t concern me.

Third, sign out of iCloud and delete the iCloud account from your device before erasing it. This was the most worrisome for me, as I had not done this. Unfortunately, the article did not make clear the consequences of omitting this step or whether my restore was sufficient to make it OK that I had bypassed it (I think it was).

This led me to delve further into the status of my iCloud account. I logged in to icloud.com on my Mac and checked Find iPhone. I was mildly dismayed to see that my iPad was still listed in the All Devices list. Without the new owner having access to my Apple ID, I didn’t think I was in any danger. Regardless, I selected “Remove from Account” for the device — and was pleased to see the item vanish from the list. I next went to iCloud’s Settings>My Devices. Happily, the device was not listed here.

I was beginning to feel a lot more comfortable. And I made a mental note for the future: check these items prior to selling my next Mac or iOS device.

iTunes

As it turned out, I was not yet at the end of the road. Another Apple support article, titled “View and remove associated devices in iTunes,” warned that, before selling my iPad, I should go to my Account settings in iTunes and click “Manage Devices” from the iTunes in the Cloud section. From here, check to see if my iPad is listed. If it is, click its Remove button. I hadn’t done this beforehand. So I checked it now.

Uh-oh. My now-sold iPad remained on the list. Worse, its Remove button was grayed out…so I could not delete it. [Note: this is not just a matter of not waiting the 30 days mentioned in the article; there were devices in list that I had not accessed for way more than 30 days and their Remove button was still gray.] From what I subsequently read elsewhere, the only way to get the device off the list now was either (a) sign out of iCloud on the iPad itself (too late, given that the iPad was already erased and sold) or (b) wait and hope for Apple’s servers to automatically remove the item from the list after some unspecified period of time. Otherwise, the item may stay on the list forever.

Once again, I doubt I am in any real danger here. Without my iTunes account password, the new owner should have no access to my data. But it’s still irritating to have the iPad stuck on the list — especially because there is a maximum of 10 devices that you can maintain here. If devices continue to accumulate and remain stuck, I might eventually reach that maximum. There should be some escape hatch here.

By the way, if you’re selling a Mac (rather than an iOS device), also remember to “Deauthorize This Computer…” from the Store menu in iTunes of the computer before you erase the device and part ways with the computer. Even erasing the Mac’s hard drive is not sufficient to break this link. If you forget to do this, there is no way you can individually deauthorize it from any of your remaining devices — not even after logging into your iTunes account. Your only option is to go your iTunes account settings and select the “Deauthorize All…” button (which you can do only once a year, for reasons I do not entirely get).

I made another mental note for the future: definitely check these items prior to selling my next Mac or iOS device.

My request to Apple…

I’m an experienced Apple user…very experienced. Yet I still wound up a bit dazed and confused here, anxious that I had failed to do something critical before I sold my iPad. Apple can and should do better at keeping users calm. Here are two suggestions:

• Revise the Apple Support articles so there is one clearly written article that goes over all the matters I’ve covered here. If erasing a device eliminates the need to do most (or all) of the other actions, make that especially clear. Users should not have to guess or go hunting to find the relevant information.

• Even better, provide software that assists users in preparing a device for sale. I can think of two ways to go here:

First, when you select to Restore/Erase a device to its factory settings, the software should inquire if you are doing this in preparation for selling the device. If you answer yes, it walks you through all needed steps.

Second, Apple could develop a utility (akin to Migration Assistant on a Mac, maybe call it Sell My Device Assistant) that performs all the needed actions “automatically,” prompting for your permission as appropriate.

Either way, you can then be confident that you have taken all necessary steps to secure your data before you part with your device.

Posted in Apple Inc, iOS, iPad, iPhone, Mac, Technology | 1 Comment

Waiting for Apple’s “next big thing”

The next big thing.

It’s what we are all waiting for. Well, at least most of us are. If you’re Samsung, there’s no need to wait; the “next big thing is already here.” Just kidding. Either way, the next big thing is a big deal.

Time was, Apple delivered the next big thing on a regular basis. Now, not so much. Inevitably, there are grumblings that Apple has lost its mojo and that we won’t be seeing a “next big thing” from them anytime soon — if ever. Last week’s media event added (or should I say “subtracted”?) fuel to that fire. The only two product announcements were a retro 4-inch iPhone and a downsized iPad Pro — hardly groundbreaking.

Personally, I found the smaller iPad Pro to be a compelling product: faster, brighter, louder, worthy new software features. It was certainly good enough for me to order one and dump my 3-year-old iPad Air. Still, it’s obviously not equal to the excitement surrounding the introduction of the original iPad.

This got me thinking: What exactly are the minimum requirements for a product to be justifiably labelled a “next big thing”? And when can we expect Apple to deliver the next one?

As today is the 40th anniversary of the founding of Apple (yes, April Fools day, but it’s no joke), it seemed worth pausing to reflect on this.

My definition of the “next big thing” dates back to the arrival of the original iPod in 2001.

There were already several MP3 players on the market, such as the Archos Jukebox and the Diamond Rio. As I recall,  Sony (trying to capitalize on the success of its Walkman products) also had some sort of proprietary mini-disc device. Most had limited internal storage — relying on discs to supply the music rather than a built-in hard drive. Their user interfaces were clunky; their battery life was poor (some used standard AA batteries). I don’t recall any non-iPod that allowed you to scroll through the device’s entire music library and play individually selected songs.

Then came the iPod: a thousand songs in your pocket, a revolutionary scroll wheel interface for navigation, easy syncing and custom playlists via iTunes on your Mac (or later Windows PC). It was, as they say, a game-changer. Today, no one remembers the MP3 players that came before the iPod. Every one remembers the iPod (heck, almost every one owned one at some point).

As I see it, the reason for the iPod’s breakout success was that Apple attacked the problem from a different angle than its competitors (“Think Different”?). Everybody else tended to be satisfied with eking out an incremental edge in features or quality — however small. Having a marginally better variation of  your top competitor (or at least being able to claim you did) was more than good enough.

In contrast, Apple was willing to throw out the playbook and, if necessary, start over with an entirely new design. Their premise was: “Let’s build a product that consumers will love, one that’s not limited by what’s on the market now. Let’s not be satisfied with being 1% better than our competitors. Let’s blow the competition out of the water.” And that’s what they did. The iPod became the “next big thing” and — probably more than the iMac — was the turn-around product for Apple’s financial recovery.

Even if you feel I’m exaggerating a bit here, you cannot make that claim for the iPhone. It could well rank as #1 on a list of most ground-breaking product introductions. You can divide the history of mobile technology into “before the iPhone” and “after the iPhone.”

Again, prior to the iPhone, companies struggled to come up with a winning concept. I am always reminded here of the ROKR — Motorola and Cingular’s Frankenstein phone. This disastrous attempt to meld a mobile phone and an iPod was so poorly conceived that it smelled like two-week-old fish before it even hit the shelves.

It was only after Steve Jobs and Apple maintained complete control over the end result that the iPhone emerged two years later. With its touchscreen keyboard, iOS app-based interface, visual voicemail, a full-featured web browser, and an MP3 player better than Apple’s own iPod — it was unlike any previous mobile device.

Back in 2007, the smartphone market was dominated by RIM’s Blackberry. According to the book Losing the Signal, RIM executives didn’t understand (or didn’t want to understand) what the eventual impact of the iPhone would be. They were certain the iPhone would fail. They were wrong of course. Today, the Blackberry is effectively dead. And every smartphone on the planet is either an iPhone or something that looks and acts like one.

Although the arc is longer, the story is the same for the Mac. Back in 1984, it was the first mass-market computer to feature a bit-mapped screen with a graphical user interface navigated by a mouse. PC users scoffed and called it a toy, doomed to fail. And yet today, MS-DOS is dead — and virtually every desktop or laptop computer uses either OS X or Windows (which began as Microsoft’s unabashed copy of the then Mac OS).

Sometimes, I wonder: Where would the computer and smartphone markets would be today if Apple never existed. Very different, and far less enjoyable, I am sure. My nightmare vision is that the market would be typified by ROKRs instead of iPhones.

The next “next big thing”

So…a “next big thing” has two primary attributes: (1) it derives from a “ground-up rethinking” of  a product (or even the invention of an entirely new product category), rather than relying on incremental improvements to an existing category and (2) the resulting product becomes so successful that all competitors either imitate it or die — leaving the “next big thing” as the primary or sole survivor.

The Mac, the iPod, the iPhone, the iPad. With some small degree of stretching, they all fit within this definition.

What, if any, more recent Apple products similarly qualify as a “next big thing”?

I would definitely include the Apple Watch — even if current sales aren’t as great as Apple might have hoped. I remain optimistic that the Apple Watch will continue to improve with each update and that, within a few years, the device (and its imitators) will represent the entire digital watch market.

The Apple TV comes close. It was groundbreaking when it first came out; it preceded Roku and Chromecast and all similar competitors. What started out as a “hobby” has become a big success and an important piece of Apple’s product lineup. Still, I am uncertain about its future. Is it the prototype for all televisions going forward or will it get left behind by a competing vision? It’s very possible that some entirely different approach — from Sony or Samsung or Vizio or TiVo or (heaven forbid!) Comcast or even a new as yet unknown company — will emerge as the winner. How we use and control our televisions in still very much in flux.

So where does that leave us going forward? Is there another “next big thing” on Apple’s horizon?

An Apple Car could become the next big thing. But that’s still several years away. In the nearer term, Apple may be secretly planning to release a potential “thing” as soon as later this year. But I doubt it. If that were true, I believe there would at least be vague rumors by this point.

So, for the sake of argument, let’s assume Apple has no potential “next big thing” in its immediate pipeline. Does this mean Apple is in trouble? Is it even something we should worry about?

Probably not. Coming up with a “next big thing” is rare almost by definition. You can’t manufacture “next big things” on demand. It’s not like ordering pizza. Apple has had a remarkable run. But all runs come to an end.

Perhaps, as the company matures, its approach needs to change. This doesn’t necessarily imply a descent into complacency or mediocrity. It certainly doesn’t mean Apple is “doomed.” Apple can still strive to maximally improve its existing products as well as venture into new categories. And all the while, it can remain open to finding the “next big thing.” Even if one doesn’t come along, Apple can remain a very successful company.

Think about it. Many (probably most) successful companies never have even one “next big thing.” Certainly not more than one. When was the last “next big thing” from Toyota? Or Cuisinart? Or even Samsung?

And yet…there’s always the risk that some other company will come out with an unexpected “next big thing” — a product that could do to Apple what Apple did to RIM. Apple has become so huge and profitable that this no longer seems very likely. Apple can absorb damage and deal with it with less permanent harm that it could have in decades past. Still, companies like Amazon and Google certainly are not resting on their respective laurels. Dangers to Apple lurk on all sides.

In the end, I’m confident that Apple has a bright future. We’ll be seeing many exciting new products in the years ahead — regardless whether or not one of them qualifies as a “next big thing.” But it’s just as certain that Apple’s top competitors will be aiming to do the same. So keep your seat belts fastened. This ride is far from over.

Welcome to Apple’s next forty years!

Posted in Apple Inc, iOS, iPad, iPhone, Mac, Technology | Leave a comment

Trump: Vacuous, Phony, and Violent

The vacuousness of Donald Trump’s answers in the debate last Thursday was truly astounding. And to the extent there was any substance to what he said, it was almost always factually wrong.

Two quick examples:

When asked what he would do to fix Common Core, Trump replied he would get rid of “education through Washington, DC.” That was completely vague. There was no mention of even one thing he would specifically change to accomplish this goal. But it also turns out to be wrong, as the moderator pointed out (and later confirmed by others) when he noted that states and local governments actually set the Common Core agendas.

When asked about his position on Social Security, Trump said he would maintain it at its current levels. To pay for this, despite growing deficits, he said he would get rid of “waste, fraud, and abuse.” Again, this is completely vague, offering no specifics of what precisely he would cut to reduce the waste etc. And again, the entire notion is factually in error, as the moderator pointed out when he noted that, according to several analyses, the total amount of “waste, fraud and abuse” in Social Security only accounts for a small fraction of its deficit.

And so it goes.

And when challenged to defend his statements intended to incite violence against protestors at his rallies (such as this one), Trump countered that the protestors were the “bad guys” and had started the trouble. Even if true, this would by no means justify his schoolyard bully replies, especially coming from a potential President of the United States. Further, as the moderator yet again pointed out, there is no evidence that supports the truth of his assertions.

As a last avenue of attempted escape from this dilemma, Trump now claims some of these incidents never happened. Incredible!

Despite all of this, my initial read of “mainstream media’s” coverage of the debate found almost no mention of any of these matters. The press instead chose to focus on how “subdued” and “policy-oriented” the debate was, making the whole affair, including Trump, sound almost positive. The press is far too timid here, but that’s hardly a surprise.

It goes without saying that none of Trump’s antics will dissuade any of his supporters to change their minds at this point. Their brains are already on “do not disturb.” In many ways, this is the bigger problem. There will always be people like Trump running for office. We’ve seen it before. We’ll see it again. But never before have so many voters seemed so willing to elect one of these people President.

That’s the bottom line: It is both scary and embarrassing to think that someone like Trump could actually become the next President of the United States.

[Note: I originally posted a version of this on Facebook.]

Posted in Media, Politics | Leave a comment