AppleCare warranty reportedly to become subscription-based: What say you, EU?

AppleCare warranty reportedly to become subscription-based: What say you, EU?

Summary: The EU has been on Apple's case against its "unlawful" warranty practices. A new report suggests the iPhone and iPad maker may switch to a subscription-based model.

The EU has in recent years criticized Apple, which has swallowed fines over its warranty policies. (Image: CNET)

Apple is reportedly switching to a subscription-based model for its AppleCare and AppleCare+ extended warranties.

The report from AppleInsider, citing Apple vice president Tara Bunch at an internal company meeting, AppleCare will be referred to as "One Apple," which would support all Apple devices a subscriber owns rather than individual devices rather than on a per-device basis.

Currently, AppleCare and AppleCare+ plans extend phone tech support and hardware repair from 90 days to one year respectively, to two years for iPhones and iPads and three years for Macs. It was reported than the current 90 days phone tech support will increase to one year.

It comes only a few days after Adobe said it would switch to a subscription-based software-as-a-service model for its newly-created Creative Cloud products — which includes Photoshop, Illustrator, Flash, After Effects, Dreamweaver and Acrobat.

There are some other tidbits: devices under warranty that break will be fixed in-store rather than swapped out, replaced, and the older device repaired elsewhere and re-sold as a refurbished mode. Apple could save as much as $1 billion a year, according to the initial report, with even higher savings on deck once the policy is rolled out internationally.

But here's where it gets tricky.

EU residents already enjoy a free two-year warranty. Apple was in 2011 slapped about by the Italian authorities and fined €900,000 ($1.2m) for misleading its customers over its AppleCare advertising. The bolt-on warranty, available at a premium, fell afoul of EU law.

Apple appealed but lost the case. But the EU didn't loosen its jaw grip on Apple's arm. European Justice Commissioner Viviane Reding said in March that little had been done, and that member states whose task it is to enforce EU consumer law was "diversified and inconsistent." 

Reding dubbed Apple's practices as "unacceptable," adding the company "failed to clearly indicate the consumers' automatic and free-of-cost entitlement to a minimum two-year guarantee under EU law."

Apple eventually changed its policies by tweaking the wording, but some criticized the changes for placing too much of the onus of blame on the customers after they receive their shiny rectangles of multiple sizes.

The EU as a central institution, in the case of Apple's warranties, can't actually do much. But Apple was forced to swallow a bitter pill in its case in Italy. While member states hold the power to criticize and fine Apple, they already have a case in which they can cite in their own judiciaries — the nuances between member state law notwithstanding.

The proof will be in the pudding. Exact pricing and coverage length under the reported plans have yet to be announced. But with Apple keeping its head mostly out of the European hot water, unlike its rivals — both Google and Microsoft have suffered a tongue-lashing by the European Commission in recent years — the maker of shiny rectangles will likely want to keep it that way.

Whether Apple likes it or not, it's in its best interest to keep out of the EU's spotlight. As with repeated cases with the aforementioned rivals, once you're in the EU's crosshairs, you're never coming out of them.

Up until now, Apple has kept its nose clean — or at least to a point where nobody has formally submitted complaints against it, which would be the catalyst the EU would need to investigate the company.

Ergo, it's likely Apple will play ball, at very least to appease its European friends.

Topics: Apple, E-Commerce, iOS, iPhone, iPad, Legal, EU

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  • Extended warranties are largely a scam

    By the time you subtract sales commission, advertising if any, admin costs and profits, the "payout" on extended warranties is probably less than 50% of the gross revenue.

    In the long term a consumer can cut his costs in half by just paying for repairs out of pocket after the regular warranty expires.

    Consumer decisions at times boggle my mind.
    • Apple(don't)Care

      I'd imagine that AppleCare is one of Apple's highest margin products. It is also very vague, by which I mean that most consumers don't really know what it covers. This, in part, results from Apple's generous goodwill in the past. Many people have had handsets replaced for free when they have broken the screens, even though AppleCare does not cover accidental damage.

      Personally I agree that AppleCare is a scam. The only benefit above the protection offered by EU law is the inclusion of software support.

      When I have a phone software support issue I turn to forums for advice first, if no joy there, I will contact the phone maker. Most phone makers offer a 2 year warranty and will answer OS/software questions for the duration of the warranty period, and often longer.. Apple with their 90 days are the exception.

      Frankly I am staggered that more EU member states aren't hauling Apple over the coals with regard to AppleCare. The AppleCare blurb is intentionally misleading and designed to scare customers into coughing up.

      eg "1.In most EU member states, consumers may only claim for defects that were present on delivery." True, but they omit to mention that faults (not arising form wear and tear or abuse) within the first 2 years are considered to have existed at the point of purchase. Apple want you to believe that only faults noticed on the first boot are covered.

      eg2- "2.In most EU member states, consumers may only claim consumer law rights against the seller from whom they purchased the product." Again true but in reality the phone vendor will ask the customer to contact the manufacturer who will work with the customer to resolve the issue. I guess apple are hoping to scare customers into thinking that the vendor will replace components with cheaper ones.

      It amazes me that Apple claim to produce robust and reliable products yet refuses to offer the industry standard 2 year warranties.
  • What is up with "shiny rectangles"? Most Apple devices have matte, not ...

    shiny finishing (iPhone 5, iPod touch, iPad, iMac, Macbook, et cetera). So if you talk about "shiny rectangles", you are talking about Samsung and the likes.
    • Yes it wasn't exactly unbiased reporting was it?

      But he's a salesman - it's cool to bash apple and it's what his readers want to hear.

      As for forcing a two year warranty, I think that's a good thing. I also support apple repairing phones rather than swapping them - seriously how bad is that for the invironment?!

      Few mistakes he made that I know from having been to the Genius Bar a few times before - they don't fix up broken phones and sell them as refurbs.... Seriously where do you see the stockpile of refurbished iPhones?! - they strip them to parts and use them in the phones they swap at the Genius Bar - I just asked the genius if it was new when I paid 140 for a broken screen and got the whole phone swapped. He said that it was refurbished and explained that the broken screen and exterior were likely the only bits that had failed so they would reuse a lotof the rest.

      Also the 90 day warranty is a lie. They don't sell anything with a 90 day warranty. That's if they change your phone once the warranty has ended -the new one has a 90 day one which seems a bit cheap. It could easily be a year.

      As long as they do them in store - I smashed a Samsung about 18 months ago - it took them 5 weeks with an "Alcatel" curtorsy phone and 155 quid to just change the screen.

      Apple need to shape up on this. They know everyone's contracts are two years now - give a warranty to last... Unless they don't think it can? Also... AppleCare+ for the UK please!!

      Additionally everything said above to the other OEMs - they're all just as bad, oh and Samsung... Seriously... How many phones do you sell? It's like 90% or something... You can afford to have Samsung genius bars!
  • You consider that bashing Apple?

    • I am not sure about MarknWill, but, personally, I find this reporting weird

      I mean you really have to try hard finding (and you will fail in that) a character among IT reporters in respectable media to all of sudden use such peculiar phrase to describe a line of products that showcase opposite qualities -- as if the writer tries to prove some point (though, obviously, there is no one).
  • Hmmmm

    Apple will do what it wants in the end.
    That said, why just a 2 year warranty? Oh ya. The battery will die out just after 2 years and you can't change them [on most products].
    • Re: The battery will die

      Of course, you can change the battery in any Apple device. It's just not desiged so that you do it while on the road.

      It's another question, whether in two-five years when it no longer holds enough charge you will still want the same old device with a new battery or not.
      • assult and battery

        Replacing batteries in some of apple's products can result in damaging the device or personal injury.

        The practice of gluing in batteries can result in the cells puncturing whilst trying to remove them.

        My laptop cost £2300 when new. It is now 2.5 years old and will need a replacement battery soon. I expect to be using it as my primary machine for at least another couple of years. Had I purchased a cheaper MacBook Pro, paying for a replacement battery would have increased the total cost of ownership, making the inferior Pro more expensive.

        Under UK law I have 6 years of cover. Batteries are consumables and thus not covered. If I had an Apple Laptop and decided to open it myself to replace the battery on day 731, I would be invalidating the (expired) warranty and probably end up with no right of recourse if the screen fails the next day.
  • You can say many thing about...

    ...they European Union, but when it comes to consumer protection and warranties I think they are on the right track. It forces all sort of companies (maybe especially tech) to spit out products of a certain quality because otherwise they a screwed when people start to return the products. And the European consumers know their rights - at least in my part of Europe, Scandinavia.
    With that said and a bit a side track, us consumers have another "weapon" now when being sold bad products - the social networks. Companies have to be careful, because one bad consumer experience can be spread world wide. So can a good one - so the companies just have to keep their game up. Which I think give a certain needed balance in the relationship between big companies and "the people".