What They Say
Warranty Week estimated that “the world’s largest extended warranty program(me)” run by Apple has reached a level of around $8.5 billion upo 20% in 2021. Despite the growth in its warranty revenues, its actual product warranty expenses have continued to decline. The site also looks at Apple’s warranty provisions and reserve funds, although it said that in connection to the provision:
“It’s never proportional to sales, and it soars and plummets on a schedule only Apple understands.”
What We Think
There is quite a lengthy analysis of what Apple is doing. It seems that Apple’s minimal product warranty (it has been forced to increase it in some markets outside the US) has actually encouraged the sales of extended warranties. There are very different views by consumers of longer and shorter warranties. I remember hearing that long warranties are seen as negative in Japan, where consumers then assume that there must be some problem if the maker has to extend it, whereas in Europe, they are seen as atractive. (BR)
Apple’s Product Warranties Claims Paid per Quarter, 2016 to 2021 (in Millions of U.S. Dollars)
