Is Apple the worst good company?

So IT (inevitable tragedy) happened. I dropped my iPhone.

Options?

  • pay $250 for a replacement unit (by mail or in an Apple store)
  • pay $150-200 for some company to put in a replacement screen (which voids the Apple warranty)
  • continue using it, although the glass is cracked, the beauty is gone, and my eyes tear up every time I look at it
  • (no, the $5 DYI option is not an option)

I’ll pay $250 for the replacement unit. Although I know I’ll probably drop this one too, sooner or later (please, God, later!). So I investigated the possibility of buying some kind of insurance against accidental damage.

Apple sells an extended warranty, but no insurance against accidental damage. Of course, the regular $3.99-5 AT&T phone insurance is not available for the iPhone.

An AT&T store manager recommended Safeware, and other sources suggested checking with home/renter’s insurance companies. Geico doesn’t offer it, but apparently State Farm does. I called two State Farm agents and they both told me State Farm stopped writing this policy for the iPhone because they were losing money. A Safeware customer rep. told me Apple hasn’t released components for the iPhone, so no one can repair it – that’s why insurance is not available. I did find one company who offers iPhone extended warranty (just like Apple Care) and Accidental Damage Protection (ADP): SquareTrade. You can buy ADP only within the first 30 days of getting a brand new iphone. The rep. told me they’re also considering dropping iPhone coverage, because it doesn’t make financial sense.

I hate Apple.

But I love my iPhone.

So, does having a good/revolutionary product mean you can abuse your market? Dictate your own terms, set high prices, refuse insurance, make it difficult for other companies to insure your product, charge a fortune for a replacement unit when you know it will, sooner or later, break?!

What are the factors that make it possible for Apple to “abuse” customers and still keep them coming back?

  • a good product. After having the iPhone for a few months, I can’t imagine living without it. It’s useful! It’s beautiful. I’m emotionally attached to it, to the pleasant experience of using it, and to the unique feeling of “cool!” (powerful branding, there). I know it’s silly, but I can’t help it. It’s gotten me at a level deeper than reason.
  • targeting a high-end market. People who buy the iphone (most of them, anyway) can afford the $250 replacement cost. They won’t be happy about it, but it won’t break the bank.

Apple’s marketing strategy works – but is it good PR? Apple has the potential to define a new type of organization-public relationship: the (happily) abusive one! Can this type of relationship last, in the long run? Does it provide enough of a trust cushion to carry Apple through a major crisis, should one happen?

What do you think?

Is Apple’s marketing strategy somewhat abusive? What makes it work? What does it mean for PR and the long-term relationship with publics? How do you feel about your iPhone? How do you protect your iPhone? If it broke, would you pay $250 to replace it? If it broke again, would you pay $250 again?

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2 Comments

  1. I can’t tell you how many times I’ve had the same thought. I got a complete lemon when I bought my first Macbook and it took us four times sending it to Apple plus more than 12 hours on the phone and countless hours on e-mail to get a replacement. Ridiculous.

    My iPod has completely stopped working three times now, all about 10 months apart, but they won’t replace it, they make me pay to buy a discounted new one.

    I bought a Airport that was DOA, sent it back, they still haven’t returned my money.

    At this point, with all those things listed out, why do I keep coming back?

    My theory is that while Macs mess up big when they do mess up, they’re a joy to use on a daily basis … and I can’t say the same for other products I’ve tried.

    But Apple should really work on customer service.

  2. I spent $1300 on my iPhone – $600 for the unit itself, $200 for my first month of service, and a $500 deposit.

    I dropped mine yesterday and now it’s broken. It won’t even turn on, it’s not just a cracked screen. They decided mine was “accidental damage” and told me to go fuck myself, more or less.

    I’m 20 years old and I bought this iPhone with a bonus I was lucky enough to receive from work. Now I’m in the midst of this wonderful depression our economy is facing, I’m thousands of dollars in the hole… I really don’t have the means to replace this damn thing, but apparently Apple doesn’t give a damn about keeping their customers happy. (Just a week ago I brought them my MacBook Battery which was swelling up to almost twice its original size, and all they told me was, “It’s out of warranty, so we can’t replace it.”

    I’m sorry, but I’m starting to believe Apple to be just as horrible as Microsoft. Fuck Apple and their bullshit.


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