AppleCare+ Is Now Billed Monthly by Default and Costs More That Way

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As its iPhone sales have fallen, Apple has begun focusing on alternative sources of revenue, like its lucrative Services division. Much of the company’s presentation for the iPhone 11 was spent demonstrating games and projects related to Apple TV. Apple wants to be a major media provider and it’s hoping you’ll reward it with lots of content purchases.

One change to AppleCare+ flew a bit under the radar. Up until now, AppleCare was a 24-to-36-month extended warranty available from Apple on various iDevices like MacBooks, iPhones and iPads. The company has typically billed a single flat rate for the service interval, though many repairs still cost money, even if you’ve purchased AppleCare+.

Now, Apple is making a change to the program. The good news is, you’ll be able (in theory) to buy AppleCare+ for a longer period of time. The bad news is, it’s going to cost you more by default even for the period of time that the program normally covers if you choose to pay by the month.


Image credit: 9to5Mac

The screenshot above by 9to5Mac shows pricing for AppleCare+ for the Apple Watch Series 5 and the iPhone XR. Paying month-to-month (you’ll be re-upped automatically) is essentially a subscription, even if Apple isn’t calling it that. But if you do the math, you’ll see that the month-to-month program costs significantly more. Over two years, you’ll pay $95.76 instead of $80 for AppleCare+ if you slap it on the Apple Watch. As for the iPhone XR, the two-year fee comes out to $191.76, up from $150. That’s roughly 1.2x more over the same period of time. The up-front pricing on the iPhone 11 is $149, while up-front cost on the iPhone 11 Pro is $199.

Apple’s legal document states:

For Monthly Plans, your Plan Term is one (1) month. Your Plan will automatically renew each month unless cancelled as set forth in the “Cancellation” Section 9 below, including in the event that Apple is no longer able to service your Covered Equipment due to the unavailability of service parts, in which case Apple will provide you with thirty (30) days’ prior written notice of cancellation, or as otherwise required by law.

There’s no more option to buy a fixed-term service plan and then pay for it at a monthly reduced rate. Instead, you can pay for 24 months of coverage upfront at one price or simply go on the month-to-month program. While the end result of this is that people will be able to have AppleCare+ for longer periods of time on the same device, it’ll also mean paying Apple more money for the privilege of doing so.

If anything, we suspect this change is a nod to the fact that users often keep their devices for longer periods of time these days. Reports have suggested that Americans now only replace their iDevices closer to every three years, rather than every two. Converting customers to a small monthly fee for AppleCare+ gives Apple a steady monthly revenue stream that replaces some of the sales revenue it loses when it sells fewer iPhones. The fact that customers are being billed monthly would also help smooth revenue quarter-over-quarter — people only buy a new device every few years, but if they pay you $8 a month, that’s revenue you can count on. Multiply that by some millions of customers, and you’ve got a hefty chunk of reliable income. Apple, these days, is all about reliable income.

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Apple Unveils iPhone 11, Pro, Pro Max, With Heavy Emphasis on Cameras, Battery Life

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Apple unveiled its upcoming trio of new iPhones today, covering the iPhone 11 and the new iPhone Pro product family. The company is retiring the confusing “XR” and “XS” brands that it deployed last year, in favor of a simplified structure. The iPhone 11 is just the iPhone 11, while the professional model will come in two flavors: iPhone 11 Pro, and iPhone 11 Pro Max.

As expected, these devices make camera features and technology a major component of their own value propositions. But the iPhone 11, at least, subtly nods to the fact that Apple’s price increases were anything but well-received last year. The base model iPhone 11 will be priced at $699, $50 less than last years’ iPhone XR. While this doesn’t make the device ‘entry-level,’ (new or not, $699 is not an entry-level price), it at least shows the company is responding to consumer’s refusal to buy its higher-end devices — at least, a little. The iPhone 11 Pro still starts at $999, while the iPhone 11 Pro Max is a $1,099 device. Pre-orders begin on September 13, with shipments to start on September 20.

The iPhone 11’s multi-colored hues.

The iPhone 11 has a 6.1-inch screen and will be offered in a variety of colors, including black, green, purple, red, white, and yellow. Features like haptic touch, a True Tone LCD, and a dual-camera are all standard. According to Apple, the new A13 Bionic will offer up to an hour of increased battery life over the iPhone XR, which already had the best battery life in the iPhone family.

As for the iPhone 11 Pro and iPhone 11 Pro Max, these two devices are 5.8-inch and 6.5-inch, respectively. They have what Apple is calling a “Super Retina XDR” OLED display with support for the P3 color space, which is a wider color gamut than a standard SDR monitor or phone display. Dolby Vision and HDR10 are both supported on the iPhone Pro family, and the display can handle up to 1,200 nits of brightness. Both the iPhone 11 and iPhone 11 Pro advertise features like Dolby Atmos support and supposedly offer better spatial audio performance.

The iPhone 11 Pro’s triple camera. It’s the best a man can get professional-quality camera ever integrated into a smartphone (according to Apple)

All of these new devices run on Apple’s A13 Bionic SoC, about which relatively little is known at this juncture. Apple claims the new chip offers up to 20 percent faster performance and its neural engine is supposedly more efficient as well. Apple claims the iPhone 11 Pro will get four hours more battery life than the iPhone XS, while the iPhone 11 Pro Max will last five hours longer than the iPhone XS Max. These claims seem unusually large, and I’m wondering about the workloads Apple used to test them. Battery life on smartphones is highly situational depending on what, exactly, you are doing. We’ve absolutely seen these kinds of battery life improvements before — but they’ve typically arrived when a workload that was previously being handled in software (like video decoding) is transferred to fixed-function hardware blocks (like a GPU’s onboard video decoder).

We’re not saying Apple can’t deliver a 4-5 hour battery life improvement, but that improvement may be very workload-dependent. A 4-5 hour improvement in battery life in all heavy use scenarios would be the equivalent of a major leap forward in battery technology. That’s a bit farther than we’re willing to go until device characteristics have been thoroughly tested.

Apple is clearly staking the iPhone 11 on its camera tech. When you visit the landing page for the iPhone 11, you’d be forgiven for thinking you’d actually dropped into a product page describing the advances in Apple’s camera technology as opposed to the general landing page for the phone. The iPhone 11 has a new camera system with one 12MP wide camera and a 12MP ultra-wide camera. The first supports optical image stabilization, while the latter has a 120-degree field of view. The Camera app has been updated to allow you to you see outside the framing of the photo for when you need to take a shot in tight quarters.

Now with 4x more scene. Bangs, bracelets, and skinny jeans not included

The iPhone 11 Pro includes a triple-camera system with a 12MP wide camera with an equivalent focal length of 26mm and an f/1.8 aperture. There’s also a 12MP ultrawide camera (13mm focal length, f/2.4 aperture) and a 12MP telephoto camera with a 52mm focal length and an f/2.0 aperture. Much of Apple’s live event and its webpages are filled with glossy demonstrations of the kind of photos you can take with the new iPhone Pro and professionals extolling the benefits of the new device compared with previous models.

David Cardinal is our resident photography expert, so I’m going to defer to him as far as any professional comparison between professional DSLR cameras and the integrated models present in phones. I expect that this focus on the iPhone’s camera technology will at least help the device close the gap between itself and standalone DSLRs in some cases, particularly thanks to the new Night Mode, but that there will continue to be specific times and places where there’s an advantage to having a standalone professional product. It has been my observation that smartphones have gotten steadily better at providing a very good default, but there are intrinsic challenges to matching the benefits of a DSLR in such a limited amount of space.

The iPhone Pro, at least, includes a fast charger in the box. The iPhone 11 continues not to do so. All of these devices are rated for IP68 water-resistance, commonly referred to as being waterproof.

The iPhone may make photo and video editing on a small device easier, but you != Stanley Kubrick. Don’t feel bad. I am also != Stanley Kubrick.

The iPhone 11 Pro’s landing-page is even more photo and video-centric. It’s basically devoted to a demonstration of all the new device’s photo and video-editing features, or shots that claim to show the benefits of the new cameras. These sorts of claims will have to be evaluated to see how they hold up in objective testing, so I don’t actually have a lot to say about them, other than observing the fact that Apple is trying to push customers towards new products almost entirely on the basis of camera tech.

This may not be the worst approach. There are rumors that the company is planning a fairly major overhaul for the iPhone next year, with new features like 5G support set to be introduced at that date. Customers, meanwhile, tend to respond well to visual improvements — the original introduction of Retina displays was a huge win for Apple, and smartphone cameras are one of the few areas that have continued to improve at a fair pace even as overall device performance and battery life improvements have slowed.

There have been rumors that Apple will re-launch a new iPhone SE in 2020. If it intends to unveil such a device, it will do so at a later date. There was no mention of a new lower-end product. The iPhone 7 has been removed from sale; the iPhone 8 is now Apple’s lowest-end entry-level model at $449.

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Apple Has Begun Software Locking iPhone Batteries to Prevent Third-Party Replacement

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Apple has begun locking its batteries with software to prevent third-party replacements from reporting their status properly. The company is apparently activating a feature that it’s previously built into its products. The message persists, even if you swap in a genuine Apple battery, and it’s an attempt to shove customers towards using Apple and Apple-authorized resellers to the exclusion of third-party stores.

According to Justin at The Art of Repair, via iFixit, the message will pop up if you replace the battery on an iPhone XR, XS, or XS Max. The messaging from Apple pops up in both the latest version of iOS 12 and the iOS 13 beta.

Image by iFixit

But the real kicker here is the fact that this message happens even with a genuine Apple battery. There’s a Texas Instruments microcontroller attached to the Apple battery and it’s capable of acting as an SHA-1/HMAC authentication device. This means the battery can have an authentication code that’s locked to the specific phone and can only be changed by Apple or an authorized reseller. Swapping in an authentic Apple battery doesn’t work because the authentication key associated with that battery is different from the authentication key your phone expects to receive. According to iFixit, the only way to bypass the problem is to remove the microcontroller from your original battery and attach it to the new one. Hope you’re comfortable with a soldering iron.

As iFixit writes: “This “Service” indicator is the equivalent of a “Check Oil” light that only a Ford dealership can reset, even if you change the oil yourself.”

But we can’t say it’s a surprise. In 2017, Apple was caught lowering the performance of older devices without ever notifying end-users it had done so to preserve battery life. The company created a cheap battery replacement program for users who suffered severe device performance problems without knowing why and offered $29 battery upgrades rather than the typical $99 fee it charged. Last year, Tim Cook blamed iPhone owners who took advantage of this program for the company’s sales shortfall, rather than acknowledging it might have something to do with Apple’s decision to raise iPhone prices and kill its cheapest product (the iPhone SE).

When Apple reported its revenue recently, investors seized on two trends: The decline in iPhone sales and the surge in Services revenue. While Apple is making less money from iPhone sales, it’s making significantly more money from investing in other areas of the iDevice ecosystem. Unlike Google, which makes its Android money from advertising and rapacious data collection, Apple is also doubling down on the idea that it’s the company that keeps your information private.

But if Apple isn’t going to keep impressing Apple investors by selling more iPhones, it’s going to need to make considerably more money per user in order to compensate. Viewed with this lens, a lot of Apple’s decisions the past few years make a lot more sense. Why did the company introduce ‘Error 53‘ to lock-out third-party repair shops? To drive more repairs to Apple. AppleCare prices have gone up for most products over the past few years. Apple supports fast charging on its phones, but ships the same 5W phone charger it has used for years. Why? Because if it gives you the fast charger for free, it makes less per device. If you buy the fast charger yourself, you’ve just handed Apple pure profit based on typical cable mark-up. Why has Apple embraced building laptops with short display cables that can’t be fixed without buying a $500-$700 display panel and keyboards that can’t be fixed? Because if laptop repairs are insanely expensive, buying AppleCare looks less like a warranty you won’t use and more like a smart move to save yourself tons of money down the line. Apple was caught bricking repaired devices again last year. You don’t hear about these issues happening to other companies.

If you have to pay Apple’s fee to have a fully functional battery, it means Apple can set the price of repair high enough to encourage you to buy another phone instead. This is particularly true for people who don’t live near an Apple Store or authorized reseller, because Apple knows most people would rather buy a new device than be without one for however long it takes to ship the product off and get it back again. This is exactly what Tim Cook complained about when he blamed lower iPhone sales partly on buyers who purchased $29 battery upgrades instead. Battery repairs on the iPhone X, XS, XS Max, and XR are $69, where other battery replacements are $50. All of these little price increases add up. In Apple’s ideal world, third-party repair shops don’t exist. All device repairs and revenue are handled by Apple, at Apple-approved pricing.

I’m not going to go so far as to claim that Apple killed the iPhone SE purely to improve its iPhone average selling price and to increase revenue per iPhone purchase. But I will note, at the very least, that Apple improved both of those metrics as a result of chopping off its bottom-end product family. Data from Consumer Intelligence Research Partners in 2018 showed that the iPhone SE sold reasonably well. It wasn’t huge, but it accounted for what looks like 7-8 percent of iPhone sales as of June 2018, roughly on par with the 6S and 7 Plus.

iPhone SE sales weren’t huge, but it definitely had a market.

Knocking out the SE raised the minimum price for an iPhone from $350 to $450. It may also be cheaper for Apple to make newer devices based on the iPhone 7 body rather than the SE, which used the older 5S-style design. Good for Apple? Undoubtedly. Good for its customers? No.

Apple is far from the only company that’s taken an aggressive stance against customer right-to-repair. Console manufacturers shipped hardware with illegal “You cannot open this enclosure without voiding your warranty” stickers for years. John Deere has refused to allow farmers to repair their own tractors. But this is why right to repair legislation is important. Apple tries to frame this issue as one of consumer trust. That’s deeply ironic, considering Apple has repeatedly demonstrated that it cannot be trusted not to sabotage device performance in order to improve its own bottom line. I didn’t used to make that argument, but the company’s conduct during its battery fiasco, combined with Tim Cook’s willingness to blame his own customer base for opting to repair Apple’s screw-up changed my mind.

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