This specifically covers Apple Watches but most of the principals apply to other Apple devices like iPhones, iPads, AppleTV and Macs with AppleCare+.
How long does AppleCare+ last?
Up to five years or as long as Apple has replacement parts in stock. With Apple watches, it’s probably in Apple’s interest to keep your monthly $5/€5 coming forever so
The lower monthly cost for an Apple Watch SE might tip the balance in favour of that device over time, as the monthly rate is $3/€3.50 which adds up over time. Over the course of five years, that’s another €90. With AppleCare+ it becomes worth planning a five year lifespan for the watch/device of your choice.
What would the total cost of ownership be for a new Series 8, SE or Apple Watch Ultra?
The cost for an Apple Series 8 watch without discount becomes €500 up front, with an initial €99 for two years with another €180 years over three years for a total cost of ownership of €779 or €156/year.
Apple Watch SE would be €300 + €69 + €126 for a total cost of ownership of €495 or €99/year.
Apple Watch Ultra would be €999 + €119 + €226 for a total cost of ownership of €1344 or €270/year, almost double what a Series 8 costs.
If you buy an Apple Watch on sale (look out for the Series 7 now) and add AppleCare+ total cost of ownership becomes significantly lower.
Is the ROI (Return on Investment) for AppleCare+ positive?
For Apple or the consumer? Let’s start with the consumer first.
How many incidents you suffer and how many replacements you require is individual specific. If you have no incidents and your watch lasts five years (unlikely the battery is likely to go below 80% by the end of year three), you’ve almost doubled your cost of ownership for the SE or the Series 8. Very poor ROIEven a single incident over five years means AppleCare+ has paid for itself.
Given the fragile electronics inside and the parts subject to degradation (battery, crown, water seals), watches do require service. Even my non-Apple watches. I was unable to get a beautiful Seiko solar watch serviced after three happy years together. My Casio diver keeps on ticking though. It has to be the best value watch in the entire world, simple and built to last.
Apple wins when you give up on your Series 8 when the Series 10 comes out and you upgrade all over again, without ever using AppleCare+. No matter what happens Apple wins.
Consumer ROI is much better on devices which move around like Watches, iPhones and MacBooks. Mac Minis, Mac Studios and displays which don’t travel should work reliably without AppleCare+ in a clean environment. Devices which go under water and into extreme sports environments like the Apple Watch should definitely have coverage.
Is an Apple watch worth it?
Probably not. Most of the things which an Apple Watch can do, an iPhone can do better, GPS tracking for instance, making phone calls, playing music. An Apple Watch can track your swimming and your heart rate during workouts. For an older athlete or an older person with health issues, a rechargeable autonomous medical device with continuous monitoring and water/impact resistance at €150/year is the bargain of a lifetime. An Apple Watch also offers real value to iPhone-centric filmmakers (I’ll cover that in a separate article/video).
What’s not covered by AppleCare+?
Right off the top, in most jurisdictions there’s no coverage for theft (in the US, there is a more expensive version of AppleCare+ which does cover theft). There’s some surprising damages which are not covered by AppleCare+ hidden in the fine print of the contract:
- fire (your house burning down)
- “earthquake or other external causes”
- “cosmetic damage”(i.e. scratches/wear&tear)
- damage caused by “reckless, abusive, willful or intentional conduct”: i.e. if you destroy your Apple Watch by dropping it off a skyscraper, Apple probably won’t cover it, unless you can prove it was accidental (the strap became undone while you were tightrope walking).
The vague clause about “other external causes” worries me. There’s quite a bit of legal wriggle room there for Apple. Is a car running over your Apple Watch an external cause?
How is Apple enforcing the wriggle room clauses?
For now Apple seems to be luring people into these service/leasing contracts by generously providing replacements when required. AppleCare on the computers used to be pretty good. Then Apple decided to put absolutely useless paper sticks in their MacBooks and allege water damage when there is none to wriggle out of AppleCare.1
In the case of the watches, I’m estimating an approximate €20 to €40 watch cost of production. Not counting the AppleCare+ monthly payments, Apple makes a profit even when handing out replacement watches in relatively high volume. The low marginal cost of replacement (at a profit) makes it unlikely that Apple will become an Indian giver with its watches.
The low marginal cost of production doesn’t change the cost of replacement for consumers though so paying €50/€65/€75 for a refurbished watch when yours has failed is extremely enticing. While the total cost of ownership for the Ultra is high, if you are doing extreme sports and can expect two or three failures over five years, the €75 replacement fee on €1000 of hardware is a boon.
What if I buy a two-year term? Can I renew?
You can buy a two year plan and switch to monthly at the end. If these are business purchases, it’s a lot less accounting (and accounting charges) to pay up front for 24 months.
Sounds great. My AppleCare+ plan is up and I’ll smash my watch to get a free new one.
On Reddit, Palbi answered this well:
Intentionally breaking the item under warranty to claim a replacement would be breach of contract. While you likely will not get caught, it is still unethical.
If you choose to steal, please not not advertise that: we do not need to encourage others to do the same and with that push Apple to address the problem by tightening up the terms of service or raising prices.
For more primitive beings, who prefer arguments predicated on self-interest, here’s another argument.
If your watch ran well for two years, there’s a very good chance it will run well for another two years. There’s a reasonable chance the replacement could be a dud/lemon. Replacements are mostly refurbs or returns. No guarantee that a replacement will be new or problem free.
And then you would be left with a dud device and no warrantee. I agree with Palbi about the ethical ramifications of smashing all our devices at the end of AppleCare+ to get “free” replacements. It’s poisonous behaviour as a consumer and destroys the planet. Millions of devices thrown away for no reason is not free for the planet. Apple will just change the prices/conditions or cancel the plans altogether if people behave like this.
Image credit reeadwrite, James Webb.
It took me two months of quarrelling with Apple to get the to replace a bad battery in an MacBook Pro 13″ 2014. Apple also were grumpy at the third party screen we put in the computer after our toddler smashed the original (more accurate colour profile amazingly), even though the screen had nothing to do with the rest of the computer. In the end, Apple replaced the whole upper part of the computer, including keyboard and trackpad. The new trackpad never worked properly or reliably. But I was too exhausted by the first battle to ever bother requiring yet another replacement. Until this year, I bought no new Apple computers again and have not put Apple Care on any of them. In the end, it was very expensive for Apple to mess us around on Apple Care as I buy not just for myself but a company. Stupid MBA beancounters don’t know a knuckle-headed policy when it hits them in the face like a two by four. Unfortunately the MBA’s are long gone by the time the long time results of their policy are visible. ↩
Alec has been helping businesses succeed online since 2000. Alec is an SEM expert with a background in advertising, as a former Head of Television for Grey Moscow and Senior Television Producer for Bates, Saatchi and Saatchi Russia.