Is AppleCare a good deal?
Well, the term ‘good deal’ is a little subjective in this case. Because, as you know if you’ve ever considered buying it, ‘cheap’ is not a good way to describe it. Typically it’s around 15-25% of the purchase price for the entire computer. This is on the high side for any extended warranty, especially when it’s only covering an additional two years tacked onto the automatic one year warranty that every new Apple computer comes with.
But to put this in a broader perspective; there are absolutely zero companies on this planet that would be willing to offer an extension of their warranty if it doesn’t earn them money on their bottom line. So, while it offers a certain peace of mind to know that you’re in no danger of paying for computer repair for 3 years (unless you drop it, spill anything on it, or otherwise destroy it yourself), keep in mind that Apple is cashing in on your feeling of security.

Let’s think about this mathematically: Apple sells AppleCare, at roughly 20% of the price of a new computer, to cover it against failure for three years. As long as less than 1 out of 5 of the computers they sell need complimentary servicing within three years, anybody who gives Apple money for AppleCare is handing them complete profit. They don’t have to create any kind of product with that money, they just have to provide free repair/replacement for the computers that break down. Assuming their standards of quality control are high enough to limit the number of defective products (and they generally are) Apple has nothing to lose by offering Applecare.
To be fair, I don’t want to create the impression that I’m biased against Applecare, or product warranties in general. If you were in control of a company that sold complex consumer electronics (or any other device prone to failure) you would certainly ensure that any warranty you offer costs enough to make it cost-effective.
But as a former Apple Store employee, I can attest to the fact that we were encouraged to adamantly recommend Applecare to every customer purchasing an iPod, iPhone, iPad, or Mac. This is, again, because Apple has very little to lose, and the price of Applecare to gain. If your device fails, and you’re not covered under either the one-year automatic warranty or you didn’t buy Applecare, Apple will fix your product. But they’ll charge you enough that they’ll see a return from it.
With Applecare, they’re just skimming that return right off the top of the initial purchase, and unless your computer undergoes an uncommon and catastrophic failure, they’ve got your money.
Buy Applecare if you can easily afford it, or if you like the peace of mind associated with it. It’s also a slightly better deal if you can get a student discount on it. But just be aware of why it’s so expensive, and how likely it is that Apple will benefit from its purchase more than you will.
Seth






