Is AppleCare+ really worth it?

So you've just bought yourself a shiny new iPhone. Whether it's the low-end iPhone SE or an over-the-top iPhone 7 Plus, these are expensive devices. If you drop one, you're out a lot of money.

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One way to protect your phone is to put it into a case. Another is to take advantage of Apple's AppleCare+ program. In this article, we look at the cost of AppleCare+ and show you how you can determine if it's right for you.

Back in 2013, I took a look at carrier-based smartphone protection plans. In those days, you bought your phone and your service together, usually under a two-year contract. While that approach is still possible today, more and more people are buying their phones from one source and their communications from another.

For example, I bought my latest iPhone straight from the Apple store (under the iPhone Upgrade program), but get my connectivity from Verizon.

What is AppleCare+?

Let's start with the basics. What is AppleCare+ (and why the plus)? I did quite a lot of poking around online and just couldn't get a clear answer about the difference between AppleCare and AppleCare+. According to "Alex" (probably not his real name), the Apple Online Store support representative, AppleCare is for Macs and AppleCare+ is for mobile devices. Don't think about the fact that AppleCare once protected iPods. It'll give you a headache.

On the other hand, according to last year's TechRepublic article on AppleCare and AppleCare+, AppleCare doesn't offer accidental damage protection, and AppleCare+ does. The thing is, there's no AppleCare (without the plus) listed on the Apple Online Store for iPhones, so it's not clear whether that program is still available.

For our purposes, since we are only talking about iPhones, I'm focusing just on AppleCare+. I know. Headache. If there's interest, I'll come back with a discussion on AppleCare and Macs at a later date.

AppleCare+ extends your device's initial coverage from one year of warranty care and 90 days of telephone support to a full two years of both.

According to Apple Legal's expanded terms and conditions for AppleCare+, the protection plan covers defects in materials and workmanship, the capacity of your device's battery to hold a charge of at least 80 percent, and accidental damage (drops and liquid damage).

It does not cover normal wear and tear nor does it cover theft, or, in the words of Apple, "damages caused by reckless, abusive, willful or intentional conduct associated with handling and use of the Covered Device."

In other words, Apple will not replace the phone used in Will It Blend:

(Disclaimer: I actually own a Blendtec blender. My wife has not yet allowed me to try blending any consumer electronics devices. She's strict about such things.)

AppleCare+ also provides you with technical support after the 90 days that comes with your purchase. Additionally, AppleCare+ allows you to replace your damaged phone or screen up to twice during the term of the service -- at least as long as you didn't try to run it through a blender or commit any other willful evil upon it.

What it costs

AppleCare+ for the low-end iPhone SE is $99. For all other iPhones, AppleCare+ costs $129 for the two year period. Those buying into the iPhone Upgrade Program get AppleCare+ for free, but if you subtract out the actual cost of a phone from the total cost of the program, it still costs $129.

To look at your return on investment in AppleCare+, I'm going to benchmark three phones: a top of the line iPhone 7 Plus with 256 GB, a base iPhone 7 with 32 GB, and a bargain basement iPhone SE with 16 GB.

The total price (in US dollars) of the devices are as follows:

• iPhone SE: $399
• iPhone 7 32 GB: $649
• iPhone 7 Plus 256 GB: $969

Although you can get these devices from many carriers and with a variety of different payment options, as the grid below (for the high-end iPhone 7) shows, the net price of the device winds up the same no matter which purchasing approach you take.

Value of accidental damage program based on one-time costs

The math is relatively easy to do if you just look at the overall cost of each phone and the cost of AppleCare+. The following chart shows the cost of each phone plus the protection plan.

There are two types of accidental damage rectification. The first is for if you've just damaged your screen (with no dents or dings anywhere else). The second is for if you've incurred more damage.

If you have AppleCare+, and you've only damaged your screen, Apple will charge you $29 to replace the screen. If you take it into an Apple Store, most likely you'll get your original phone back. If you don't have AppleCare+, you'll have to use Apple's out-of-warranty screen repair service. Here's what Apple charges to repair an out-of-warranty screen:

• iPhone SE: $129
• iPhone 7 32 GB: $129
• iPhone 7 Plus 256 GB: $149

If all you did was replace a damaged screen, here's what it would cost to use AppleCare+ compared to an out-of-warranty replacement.

As the above chart shows, it actually costs more, between the cost of AppleCare+ and the screen replacement fee, than just replacing the screen and incurring the out-of-warranty cost. The exception to this is the iPhone SE, where you save a whole dollar if you have AppleCare+.

The real eye-opener is how much you'd save if you needed to replace the entire phone. As the chart below shows, that's some real money.

If you drop or damage your phone, it's clear that the more you spend on your phone, the more you'll save using the AppleCare+ program.

Payments and early termination

Not everyone buys their phones outright. Many of us buy our phones on a payment contract, either from Apple via a loan from Citizens One or from a carrier. One strategy for phone replacement, in the event you need to start over with a new phone after some serious damage, is to eat the carrier's early termination fee and buy another phone.

While each carrier is different, Verizon's early termination fee structure is reasonably representative of the industry. It starts at $350, and declines by $10 each month. In later months, it declines at a greater rate. Here's a chart that shows early termination costs across the 24 months of a typical contract.

The bottom line is that if you decide to cancel your contract early, you're going to be eating anywhere from $90 to $350, and you'll still need to get a new phone. At $99 or $129, AppleCare+ is considerably less expensive than any early termination fee across the 24 month contract period, unless you're in the last two months.

A new phone from the Apple Upgrade Plan

The Apple Upgrade Plan allows you to get a new phone every year. All you need to do is sign up again for a two year contract, return your existing phone, and get a new one.

So, if you break your phone in, say, month 10, wouldn't it just make sense to wait until month 12, and just have Apple give you a new phone?

Yeah. No. It doesn't work that way.

The contract you sign with Apple says your phone has to be in good working condition when your trade it into them for a new phone. That said, if you have the Apple Upgrade Plan, you're forced to also have AppleCare+.

So if you break your phone in month 10, exercise your replacement right, pay your $99 fee for a replacement phone, and then trade that phone in when you're ready.

What you get when Apple replaces a damaged phone

When I wrote my analysis of smartphone protection plans back in 2013, readers were quick to point out that the replacement phones they got weren't always as nice as the phones they'd broken. Sometimes they were previous generation phones, which really angered some readers who'd been dutifully paying for a replacement service.

AppleCare+ provides a more satisfying promise: "All replacement products provided under this Plan will at a minimum be functionally equivalent to the original product." Given that each year's phone models have new functions compared to a previous year's model, Apple would have to replace your broken iPhone 7 Plus with an iPhone 7 Plus, not an iPhone 6s Plus -- so no, breaking your iPhone 7 isn't a sneaky way to get your headphone jack back.

So is it worth it?

AppleCare+ is not a bad plan. It has four main features worth considering:

• Extended tech support past the original 90 days
• Another year warranty on material or workmanship defects
• A warranty if your battery starts to suck
• Replacement if you drop your phone (as long as you don't purposely drop it into a blender)

Only you can determine whether or not the extended tech support is of value. For me, the answer is no. Every time I've ever called Apple tech support (and I'm going back to the early days), I've been told one of three things: "You can't do that with our products," "Why are you trying to do that with our products," or "We don't support your doing that with our products."

But that's me. I'd rather Google most basic use questions, so when I call it's usually for something reasonably obscure, like "Will the Rode wireless transmitter/receiver pack work with the lightning-to-eighth-inch jack dongle?" To which the answer was, and I quote, "We can't comment on non-Apple products."

Useful? Not so much.

But what about the extended warranty on defects and battery? Let's just lump that in with the damage protection and ask the question: how important is having a working phone to you? All three of these protections cover situations where the phone you depend on is not working, and you need to get a replacement or get it fixed.

As we've seen, if all you've done is broken your screen once (and nothing else was damaged), then AppleCare+ doesn't buy you anything. But if you break your phone in any other way, AppleCare+ does provide a return on the investment.

So that leads to the next issue you need to consider: how likely is it you're going to break your phone? Personally, I've never broken any of my devices, but there's always a first time. My iPhone is one of the more expensive ones. I carry it from room to room with me. I'd be really upset if I had to spend eight or nine hundred dollars to replace my phone.

For someone on a budget, with an iPhone SE, the replacement value of the phone over the cost of the plan isn't that high. But if you are accident prone with your screens, or hard on your phones in other ways, it might be easier to come up with a little extra for AppleCare+ vs. someday having to pay for a whole new phone.

Bottom-line it for me, David. What do you recommend?

You want me to put it all on the line, right? Okay, here it is. Get AppleCare+. These devices are insanely expensive, and you take them everywhere. The chances that you'll drop them, damage them, or that there's something wrong with them, where a replacement is needed, is pretty high.

But don't lose your phone. If you lose your phone, don't go cryin' to Apple. Because, AppleCare+ or not, if you lose your phone, Apple, like Janice in Accounting, don't give a frak.

You can follow my day-to-day project updates on social media. Be sure to follow me on Twitter at @DavidGewirtz, on Facebook at Facebook.com/DavidGewirtz, on Instagram at Instagram.com/DavidGewirtz, and on YouTube at YouTube.com/DavidGewirtzTV.

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