[AnthonyMouse]

> What apple charges for repairs almost definitely has markup, so it's possible that they can provide insurance that averages out below the expected "cost" of repairs but still makes apple money.

For them to make money from offering the insurance, it would have to be a gain over their alternative of you not having the insurance and then paying them to repair the device if it breaks.

They also have to be making enough to cover the moral hazard. People who buy insurance are more careless because someone else pays for the carelessness, so the insurance has to be more expensive by the amount of the resulting increase in damage.

[beagle3]

But when your iDevice breaks, you don’t necessarily go to Apple to fix it. Increasingly more, yes, but iPhone screen and battery replacements on the cheap are common where I live (compared to Apple costs).

Mac repairs aren’t anymore, but non-Applecared people might switch off the Apple platform if the cost to repair is too high.

It’s possible that AppleCare is a win for both Apple (customer retention) and the customer (lower cost to stay within favorite ecosystem) because it is NOT a zero sum game between them - there are many other players in the game.

[AnthonyMouse]

> But when your iDevice breaks, you don’t necessarily go to Apple to fix it.

Now you're making the case for not buying the insurance because you have a way of paying less for the repairs out of pocket which makes the insurance less valuable.

> It’s possible that AppleCare is a win for both Apple (customer retention) and the customer (lower cost to stay within favorite ecosystem) because it is NOT a zero sum game between them - there are many other players in the game.

The theory being that if you pay out of pocket to Apple they have a $100 margin, but if you pay out of pocket to an independent repair shop they have a $10 margin, and Apple would profit from selling you the insurance by transferring that $10 profit from the independent repair shop to themselves.

By this logic they should also have lowered the price of their repair service to be price competitive with the independent one because then they would get more repair business and attract customers to their ecosystem by having lower repair costs. But they evidently prefer to have higher margins.

And claiming the independent repair shop's margins, evidently only in the case of the insurance and not for actual out of pocket repairs for unknown reasons, would only be possible if the independent shop's margins are larger than the cost of the moral hazard and all other administrative overhead of offering the insurance. But their margins are very slim.

[beagle3]

But value is not absolute.

I broke my 6s home key last year. The phone was 5 years old at this point. Apple would fix it, for $200 or so. A local guy fixed it for $30. But there is a difference (I was made aware of by both Apple and local guy before choosing):

Fingerprint reader would only keep working if Apple fixed it. Was it worth $170? Not to me. It might to someone else.

In this case, it’s way after the end of AppleCare. But these values (working fingerprint reader, and in general Apple certified original parts vs aftermarket) has a value that differs among people.

Apple decided they prefer to cater to those with higher value for this stuff - and they likely are right economically, as it likely lets them capture value in other places in the ecosystem.

P.s. still typing this from the same 6s.

[Animats]

But when your iDevice breaks

Why should it break? These things have been out for a while now. They should be bulletproof by now. As in MIL-SPEC 810G. You can certainly buy phones that are.[1] They're less bulky than iPhones in cases.

[1] https://www.youtube.com/watch?v=mVPku-xItv8

[saagarjha]

I don't know what kind of case you're putting your iPhone into, but those phones are far bulkier than even the bulkiest OtterBoxes that I've seen. Plus, I have a suspicion that my iPhone even without a case would probably survive being stepped on by a boot and dropped into water.