Apple plans to offer the iPhone as as Disservice (iaaD), ensuring you never own even the hardware.
Dave Ramsey offers simplistic financial advice to “consumers”, but his advice on “extended warranties” is dead on. People should refuse to buy “extended warranties”.
They’re essentially a way to pay a “service company” that you may not actually get to honor any claims, or worse, the manufacturer itself, a portion of the device’s cost, in order to get a “service plan”.
The reason I say paying the manufacturer is worse is because it essentially tells the manufacturer that it’s fine to produce junk that breaks a lot, and even if you are buying it through the store, it signals to the store that it’s fine to carry products that are unreliable because they’ll only make more money when customers bet against the reliability of the device they are there to purchase.
Ramsey advises not to buy them because devices tend not to break down within the extended service period, and by the time one thing you buy has a problem, you’ll have paid for so many plans that you’ll be out more money than had you declined all of the plans, and have to fix one thing yourself out of the money that you saved by turning down the plans. And that’s _if_ you can get anyone to honor the plans. Half the time, they come up with some total bullshit reason why they don’t have to, or never even respond to your claim.
Car “warranties” are the worst. My mechanic says never buy one because most of them don’t pay and then customers get mad at the shop. He says it becomes a hassle where they fill out papers, and then 90% of them deny the claim while the remaining 10% usually want to buy a part on eBay and then haggle with the mechanics for half their hourly rate to put it on your car.
I just bought a deep freezer for $259 from Home Depot, and they wanted my to buy a $75 extended service plan that covers breakdowns for 4 years after the warranty ends. That’s nearly a third of the cost of buying another one and these things usually work for 10-20 years or more, trouble free. So the plan is a license to print money for the store and the con artists who sell them.
Now, you may be wondering, why I’m talking about cars and freezers and stuff on an article headlined “iPhone”. Well, Apple has their own extended service plan called AppleCare, and they arm wrestle people (I guess that’s a pun since the iPhone is an arm device.) to get them to bet their new $1,429 iPhone will fail between the end of the year that Apple has to warrant it, and the two following years. Even though in most cases, the hardware doesn’t fail if you just take care of what you buy. (In addition, carriers like “protection plans” with deductibles. They wanted $13 a month on my Google Pixel 6 (MSRP $600) and $18 a month on my spouse’s iPhone 13 (MSRP of $800)….
(I got them on an upgrade promo for $0 and $400 because they took over Sprint and shut down the network our old phones used.)
Even if you have to pay full MSRP at some point because your phone is totally destroyed, you’ll never break even with the plans over the long haul.
Ten years of the plans are $3,720 added to your phone bill even if you never use the plans once, and then each time your phone has an issue, there’s some bullshit deductible preventing them from even covering the full cost of repair.
In other words, if you used the plan twice over 10 years, you could have fully replaced 6 brand new phones. New phones….not some “You pay a $129 deductible and we throw you an old phone someone else traded in…..LOL!”
Remember that the longer you own it, the less remaining value it has. Shortly, the carrier is basically charging you for the market value of the phone even though they call it a deductible to your “service plan”.
This is how bad people are at doing basic math! Or budgeting. They keep throwing money at “service plans” because they go “I’m too broke to buy a replacement for this.”
If you’re too broke to replace it, what are you doing buying it?
They “asked nicely” to pay for a “service plan”, and something like half the people out there are not stupid enough, so it will no longer be a request. 🙂
I suppose Apple is angry that some people prefer to own their phone outright at some point and spend the next 4 years with no phone payment running it into the ground, like my mom did with her iPhone 6, albeit AT&T kept billing her for the “protection plan” because she’s not financially savvy. She just kept using the old iPhone because she didn’t want to pay money to upgrade, which she would have had if she had turned down the plan.
With iPhone as a Disservice, Apple can just refuse to sell you a device that you own, and they can call it a “subscription”. If you modify the phone at all, you’ve messed with “their property” because you’ll never be able to pay it off, and included in the plan of course, will be “AppleCare” so that you won’t have the option to decline it and save money and just be careful with your phone.
And while they’re in there, they can force you to pay for i”Clown”, Apple Music, and i”Clown” drive, and Apple TV, even though they collapsed twice in the past week and weren’t even accessible for hours.
The more people accept in order to stay in the “Cult” the more the cult leaders try to get away with. There’s no telling what Apple will try to shove into these “subscriptions” that you’ll be forced to pay for even if you don’t want them and never used them before.
The Verge keeps saying Apple doesn’t charge any “interest”. Why would they? The iPhones only cost them between $150-$350 to produce and they sell them for up to $1,429, and they get more expensive every year.
What is the profit margin when they start making you pay every month whether you “upgrade” to a phone that’s not that much better than the last one or not?
All of this is clearly designed to shore up Apple’s bottom line. They did lose a lot of money YTD and at some points, alarmingly so if you’re an investor.
They have had no new products in the pipeline since the iPhone came out (unless you count a watch that overworked ER doctors hate because it panics people when there’s nothing wrong with their heart), and they’re selling phones into a saturated market where Android clipped their wings a while back.
Steve Jobs was always furious about Android, because he knew it would limit the iPhone’s success with iterative updates that improved it until it overtook the iPhone…..which is what has happened, certainly with the Pixel series from Google. Then Jobs died and the Peter Principle put Tim Cook in as the CEO of Apple.
Unbelievably, Apple’s stock price has continued to rise, until you look at the fact that they’re using share buybacks and other financial engineering to raise Tim Cook’s salary without adding any real value to the company.
How else does a company that treads water continue to “add value” even as the job destruction in America and indeed the world (COVID-19 being the excuse) cause the number who can afford their products to plummet? The Federal Reserve has had interest rates at zero, so not only has Apple bought its own shares, but it did it at the expense of the American public, taking in subsidized loans which help strip the American dollar of its value, and putting it right into the hands of American Oligarchs, which include Tim Cook.
Also, being “so valuable” puts them in the S&P 500, where American workers who are basically forced at the end of a gun to put their life savings (401(k) plan) are captive investors.
How else do you think they buy a megayacht while you can’t get chicken at the grocery store? Whoopsie.
The curtain pulls back and the charade reveals itself. They do have a real business, but their “side hustle” is much better.
Buying anything on subscription where it goes away if you stop paying for it, instead of doing your computing locally, is a really really BAD idea.
When we were sending files to our immigration attorney last year, her Microsoft 365 kept crashing and it was really annoying. I kept having to send documents two, three, five times before she got them. We’d go down to Chicago to her office and she’d try to open her mail and it didn’t work and we’d have to take a lunch break.
Clown Computing is unprofessional and it saps productivity, but Apple doesn’t want you to choose. They want to license the iPhone to you and then bundle all of this crap so you’ll start using it because you have to pay for it anyway.
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