I've received 4 calls and 3 letter from Apple asking
me to sign up for the extended warranty.

Although their doing a service to benifit me technically,
it is a bit annoying.

I've received 4 calls and 3 letter from Apple asking
me to sign up for the extended warranty.

Shows they are confident you won't need it. Warranties are a big profit center for a lot of companies.

The future isn't looking so bright. Notice the increased warranty claims of $48 million, that's a lot of broken Macs. High prices and low quality is real recipe for success.

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RealityCheck wrote:
The future isn't looking so bright. Notice the increased warranty claims of $48 million, that's a lot of broken Macs. High prices and low quality is real recipe for success.

OK Reality Check, since you seem to be knowledgable of all things PC, how does reliability on the PC side of the fence compare to that of Apple? Since Apple has a relatively small product line, it is easy to put them under a microscope. Do you have any evidence that other companies are any better, or do you just enjoy taking swipes at Apple? My guess is that you simply like to stir things up, without offering something known as "facts" to back up your claim. We're all ears...

A Mac desktop 3 year warranty is $249, A Dell desktop 3 year warranty is $169. Guess who has the more reliable system?

I know you'll claim that Apple's just gouging customers for warranty, but really Macs are more reliable. Let's look at the facts, Apple had warranty claims of $48 million, a pay out of 72% of the $67 million in warranty sales. 72% of the $249 Apple warranty is $178 which is more than the cost of the $169 Dell warranty. This proves Apple quality is worse than Dell's, unless you believe Dell is selling warranty coverage at a loss.

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RealityCheck wrote:
A Mac desktop 3 year warranty is $249, A Dell desktop 3 year warranty is $169. Guess who has the more reliable system?

I know you'll claim that Apple's just gouging customers for warranty, but really Macs are more reliable. Let's look at the facts, Apple had warranty claims of $48 million, a pay out of 72% of the $67 million in warranty sales. 72% of the $249 Apple warranty is $178 which is more than the cost of the $169 Dell warranty. This proves Apple quality is worse than Dell's, unless you believe Dell is selling warranty coverage at a loss.

Without knowing Dell's warranty payout, you can't possibly make a claim about their reliability versus that of Apple. Well, you could try, but the math isn't valid. And yes, I think one could imagine that, with their economies of scale, Dell could offer a lower priced warranty.

Keep trying, though!

$169.

Check Apple's own 10-Q report. Cost of Warranty Claims was $27 million for the last quarter, compared to $17 million for the same quarter of last year. An increase of 59% in warranty claims cost. Yikes!

There's not 59% more Macs than last year, so there's no other way to spin this than a very dramatic decline in Apple quality. Instead of defending the indefensible, you should be demanding that Apple fix its quality problems.

A Troll is a Troll is a Troll, by any other name.

RC, Dell's aren't even useful 2 years down the road. We flipped over our entire Dell desktops 18 months TWICE while the three Macs in the office were still doing mid to high graphics and video work. The old Dell's could hardly keep up with the internet, let alone do anything solid.

A cheaper warranty on a crappy ass product doesn't make the product better. It just guarentees that if it dies before its usefullness runs out, you can get another cheap ass product.

Hi,

I finally agree with both arguments. Apples extended warranty is overpriced ... yes.

Dell's usefulness is limited and you need a new box after 18 months, yes...

I bought a mac knowing full well it would cost more money. Is the experience worth it? Yes. Is my time more productive? Yes. Do I have to think less about maintaining my system and just doing the work... and fun stuff YES!

Mac is worth every cent I put into it, even though it's expensive. It's like going for the penthouse at the Hilton vs the econo room at the Econolodge. Yes, there's a bed in both rooms, but you'll have a much better time and a much better sleep at the hilton.

Two things: RC isn't yet trolling, at least not IMNHO. He's making an argument based on his interpretations of the facts.

The other thing is that his arguments are spurious, at best, as well as illogical, selective, and irrelevant. As such, they aren't really worthy of serious discussion.

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RealityCheck wrote:
Check Apple's own 10-Q report. Cost of Warranty Claims was $27 million for the last quarter, compared to $17 million for the same quarter of last year. An increase of 59% in warranty claims cost. Yikes!

There's not 59% more Macs than last year, so there's no other way to spin this than a very dramatic decline in Apple quality. Instead of defending the indefensible, you should be demanding that Apple fix its quality problems.

Well every quality issue I've had with both Apple and Dell equipment has been repaired to my satifaction, so I have no need to demand that anyone fixes anything.

As for "defending the indefensible," I'm trying to make the point that you are comparing Apples (heh) and oranges, trying to draw reliability data from warranty spending. An increase in warranty spending only shows this increase, nothing more. For example, an equal number of components or subsystems may have needed warranty replacement, but since the parts were more expensive, you get a higher dollar figure, and the same reliability figure. Understand?

Please do a bit more research before pulling figures out of thin air. Perhaps you should go check out the Dell 10-Q, get their figures, and come back to us with some hard data.

I see nothing has changed. All that work coding the new comment board, and it's still being run by the trolls.

I love you guys who try and use numbers in creative ways. Dell charges less so their machines are better?

What are you smoking?

We have Dell, Toshiba, Seanix, and Apple systems here at work. The PCs in general have a failure rate 3x that of the Macs when it comes to hardware.

You can't seriously use the number and cost of warranties as a basis for reliability of a system. What kind of weenie are you?

Well sorry to shoot down RC (yet again) but here's some hard data on PC reliability from Consumer Reports. This survey was based on reports from around 48,000 readers, so is nowhere near the total number of Apple and PC owners worldwide. But I think many who are familiar with statistical methods would agree that this is a decent enough sample size to indicate a trend.

Alas, the data shows that Apple is one of the best platforms in terms of reliability. Check out the chart for yourself:

http://www.consumerreports.org/content/Categories/Computer/Reports/Images/0403des301.gif

Jeesh, Zato. Give more than a single day to lick this problem...

I would also add that there is already a substantial improvement.

Just read the BBB's website and see how many complaints Dell has vs. Apple. Looks like their computers fall apart faster than a Chineese motorcycle. My apologies to Rodney Dangerfield.

The Consumer Reports chart covers reliability of computers over a 5 year period, 1999 through 2003. Macs used to have good reliability but starting in 2003 things went down hill fast. 2003 saw major quality problems in iBooks, Powerbooks, and G5s.

If Apple quality is still good, how come Apple's warranty costs shot up 59% over last year? What's the cause of this huge increase in warranty costs? There's only one possible explanation, Apple quality has fallen dramatically during the past year.

If you disagree, how do you explain the 59% increase in Apple's warranty costs?

Apple is playing big games with our warranty. The reason why the numbers have significantly increased is due to the fact that at the end of fiscal year 2003, Apple shorted everybodies warranty in order to make their number. Then a number of months later, end of first quarter 2003 Apple added these days back on to units. At the same time, we also turned many thousands of AppleCares off only to turn them on during the 2nd Quarter 2004. We look at all the available days of warranty as an accrued liability. By doing the above, we have saved over 50 million days of warranty between End of FY 2003 and end of first quarter 2004. then throw in the white spots on the Aluminum books, iBook Logic Board Recall program, iPod failures, mini iPod probles to name but a few problems at this time. The management is really concerned! They are doing everything they can to change peoples impression of what is going on. These lawsuits ontop of everything else really have the management concerned. The dealer lawsuit is but the tip of the iceburg, and Apple knows there is no way to come out of this in one piece. Things have gotten better for the dealers, but based on how bad it had been for them to deal with us, there is only room to improve.

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RealityCheck wrote:
The Consumer Reports chart covers reliability of computers over a 5 year period, 1999 through 2003. Macs used to have good reliability but starting in 2003 things went down hill fast. 2003 saw major quality problems in iBooks, Powerbooks, and G5s.

If Apple quality is still good, how come Apple's warranty costs shot up 59% over last year? What's the cause of this huge increase in warranty costs? There's only one possible explanation, Apple quality has fallen dramatically during the past year.

If you disagree, how do you explain the 59% increase in Apple's warranty costs?

True, the Consumer Reports report is dated, but is the most recent available. If you have access to any other report that contains repair or reliability data, please share it with us.

And if you insist on asssociating an increase in quarter to year-ago quarter warranty claims as a measure of quality (which I personally don't agree with) we can do the math a few other ways that puts your claim in a much less spectacular light.

One reason for the increase could be that, if they sell more machines, and realize higher revenue, they will naturally realize a higher cost of warranties, all other things being equal. Another reason, as I mentioned in a previous post, is an increase in the cost of components. But let's do the math...

If we compare warranty claims as a percentage of total revenue, then, based on the 10-Q data, warranty claims were 1.1% of revenue for year ago, versus 1.4% for the most recent quarter. Gee, that's only a 0.3% increase in claims. Not quite as dramatic as the 59% figure you like to toss around. If you take the 6-month data, then warranty claims as a percentage of revenue is 1.2%, versus 1.1% for the year ago period. Oh my that's only a 0.1% increase.

Another interesting measure, taken from their 10-K, is that their cost of warranty claims has consistently gone down from 2001 to 2003, with their payout being 92, 79 and 71 million dollars. This would certainly seem to be a downward trend.

If Apple quality is so bad, how do you explain these figures that show a tiny increase in warranty payout, or on a yearly basis, a reduction?

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Zato wrote:
I see nothing has changed. All that work coding the new comment board, and it's still being run by the trolls.

The thing about numbers is that their results can be emphisized according to the objectives of the publisher.

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Guest wrote:
Apple is playing big games with our warranty. The reason why the numbers have significantly increased is due to the fact that at the end of fiscal year 2003, Apple shorted everybodies warranty in order to make their number. Then a number of months later, end of first quarter 2003 Apple added these days back on to units. At the same time, we also turned many thousands of AppleCares off only to turn them on during the 2nd Quarter 2004. We look at all the available days of warranty as an accrued liability. By doing the above, we have saved over 50 million days of warranty between End of FY 2003 and end of first quarter 2004. then throw in the white spots on the Aluminum books, iBook Logic Board Recall program, iPod failures, mini iPod probles to name but a few problems at this time. The management is really concerned! They are doing everything they can to change peoples impression of what is going on. These lawsuits ontop of everything else really have the management concerned. The dealer lawsuit is but the tip of the iceburg, and Apple knows there is no way to come out of this in one piece. Things have gotten better for the dealers, but based on how bad it had been for them to deal with us, there is only room to improve.

John wrote;

"If we compare warranty claims as a percentage of total revenue, then, based on the 10-Q data, warranty claims were 1.1% of revenue for year ago, versus 1.4% for the most recent quarter. Gee, that's only a 0.3% increase in claims."

Based on 8th grade math, a change from 1.1% to 1.4% is a 27% increase in warranty costs based on revenue. Good Grief, it's not a 0.3% increase. Here's an example to help. If I spend 10% of my income for gas one year, then next year spend 20% of my income for gas, I'm paying twice as much for gas, not just 10% more.

Actual warranty costs were up 59% for the quarter, or as a percent of revenue still up 27%, certain proof of significant quality decline.

But don't take heart in warranty costs only up 27%, because warranty costs as percent of revenue understates the significance of Apple's quality problems because revenue includes Apple software, iTunes, and .mac sales which have no warranty, although maybe they should.

Final analysis, Apple's 10-Q proves significant quality decline compared to last year. Maybe next time Apple has an analyst conference call someone might have the guts to ask Steve why warranty costs are up 59%... Nah that'll never happen.

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RealityCheck wrote:
John wrote;

"If we compare warranty claims as a percentage of total revenue, then, based on the 10-Q data, warranty claims were 1.1% of revenue for year ago, versus 1.4% for the most recent quarter. Gee, that's only a 0.3% increase in claims."

Based on 8th grade math, a change from 1.1% to 1.4% is a 27% increase in warranty costs based on revenue. Good Grief, it's not a 0.3% increase. Here's an example to help. If I spend 10% of my income for gas one year, then next year spend 20% of my income for gas, I'm paying twice as much for gas, not just 10% more.

Actual warranty costs were up 59% for the quarter, or as a percent of revenue still up 27%, certain proof of significant quality decline.

But don't take heart in warranty costs only up 27%, because warranty costs as percent of revenue understates the significance of Apple's quality problems because revenue includes Apple software, iTunes, and .mac sales which have no warranty, although maybe they should.

Final analysis, Apple's 10-Q proves significant quality decline compared to last year. Maybe next time Apple has an analyst conference call someone might have the guts to ask Steve why warranty costs are up 59%... Nah that'll never happen.

Lacking any sort of figure which directly measures quality as a number of units requiring repair versus number of units shipped, all of this analysis is, sadly, taking numbers which don't directly address this metric, and trying to come to one's own conclusion.

In my prior example, I was trying to demonstrate that, with the right numbers and math, one could come to any sort of conclusion that they wanted to. Your observation that there's a relative increase in warranty versus revenue of 27% is perfectly valid. My observation, which I should have worded better, that there's a 0.3% increase between the percentages, is also valid. Again, it depends on what you think you're trying to prove.

But let's get past the 8th grade stuff, which it seems you can handle, and talk about big boy math. In statistics and other areas, there's a concept known as correlation, when you try to create a relationship between two sets of data. For example, you are trying to map warranty dollars to quality. Alas, there could be other figures which could increase warranty spending but not impact quality, such as an increase in the cost of components. You'd need to present data showing a direct correlation between warranty dollars and quality. If you can do this, your analysis is valid.

Another important consideration in this this sort of exercise is the concept of "dimensional analysis." To state this concept briefly, you must be able to show how the ratio you are trying to measure (past warranty expense/current warranty expense) can be converted to the units which support your conclusion (units repaired under warranty/total units shipped.) If you can provide this important piece of information, that would also support your analysis.

But, as I mentioned, this is all a moot point, since dollars spent on warranty claims are just that, a measure of dollars spent on warranty claims. To try and derive quality figures from this measure is questionable, at best, and flawed, at worst. But if you feel your analysis is valid, then by all means spread the word far and wide. It will certainly gain you a reputation for creativity.

There are valid questions raised against Apple here, but they must be balanced against the fact that this is a litigious society. My take on the story can be outlined in these points.

-The iBooks dual USB G3s are lemons. Apple has a logic board replacement program in place to stave lawsuits, but I think they will ultimately have to do better by their customers. It is now generally believed that all of these G3 models will eventually succumb to this problem-not good.

-iPods-what can you say they're great. The battery issue, especially replacement costs need to be addressed. For those of you with iPods-the batteries WILL wear out. Batteries wear out, now say it (slowly) to yourself-batteries wear out. Customer service should strive to get the replacement cost down to 50 bucks or so. Anyone with less than 150 full cycles has a real gripe in my estimation.

-Finally, warranty claims are up. Why does this surprise anyone? Anytime a new product revision is sold-bugs crop up. Apple has released a lot of new product offerings and revisions in the last fiscal year, ergo, an increase in bugs and invariably claims.

So, that is my post, save one final detail, RC hasn't a clue when it comes to things tech, but hey, he can bang on a keyboard. Making his commentary about as valid as that skill implies. I wish him luck with his platform-he'll need it(in the long/short run). In the mean time, I'll continue doing multi media work Windows sufferers can only dream of-poor saps.

I am no longer working there, but I left due to the tricks that have been going on. Other people have spoken up about this inside, but they are no longer employed. Amazing what happens when you find out about such things.

When I first saw this happen, I thought it was an accident, but since then it was consistently done at or near the end of fiscal quarters or years. I don't know ultimately who is responsible for this, but it is definitely going on. Our customers have suffered, our dealers have been abused and the executive team is incented via bonuses, stock options and other incentives to hit their goals regardless of who is affected.

I've owned 9 different Mac systems since 1987, with very few problems. However, as the newer systems come out, jam packed with more technology, I would be very comfortable buying a service plan. My PowerBook 12" runs very hot and I am constantly lugging it around. Plus, the Apple warranty includes replacing the battery. That alone nearly pays for itself.

Bob in Long Beach