Best Buy to offer Apple's iPhone 3G S with insurance

[AppleInsider]

Those who want added protection for their new iPhone 3G S units on launch day will have the option of queuing up at Best Buy to purchase both Apple's device as well as a rare accident insurance plan, albeit one which may cost almost as much as the phone itself.

Best Buy stores nationwide next friday will begin selling the next-generation Apple handset on launch day, albeit at the big-box retailer's usual 10 a.m. opening time instead of the early hours both Apple and AT&T promise.

In contrast to these more direct channels, however, Best Buy plans to continue offering Geek Squad's Black Tie Protection service with the new iPhone, people familiar with the plans say.

While Apple has never offered more than a standard two-year extended AppleCare warranty and AT&T has specifically exempted the iPhone from its insurance offerings, Black Tie covers regular technical problems as well as drops, spills and other failures that would normally require a costly repair service or the purchase of an entirely new device.

Under Best Buy's offering, any instance in which the phone can't be fixed or replaced on the spot will see those customers offered a temporary phone until the repair or replacement is ready within three days or less. Battery replacements aren't as likely due to Apple's sealed-up design, but the company vows anti-lemon protection for devices that have to be brought in four times due defects.

Opting for Black Tie will reportedly still be expensive. For other cellphones, the program costs between $7 and $10 per month depending on the model, but the iPhone's rate rises to $15 per month. That leaves iPhone owners paying about $180 per year -- almost as much as the 16GB iPhone 3G S -- even though those with other expensive phones can pay $120 per year for the same coverage.

Well informed people say the added cost of iPhone protection comes from the heavy subsidies attached to Apple's products. Since the actual, retail price of a phone without a contract is between $599 and $699, it becomes prohibitively expensive to offer Black Tie when customers may use it more than once.

Still, for the accident-prone, Best Buy's Black Tie is currently poised to be the only option for protection of the Apple handset outside of credit card insurance or individually obtained policies. The Black Tie Protection even covers broken screens.

[ View this article at AppleInsider.com ]

[Galley]

Ha ha, that was a good one. For a moment there I thought they said $15 per month.

[bluevoid]

Just curious, where is the source stating that BB will have the 3GS on launch day? Haven't heard anything official, even on BB's forums...

[bloodstains]

Doesn't the 2 year extended Apple Care plan proved the same type of coverage for just $69?

[bluevoid]

Originally Posted by bloodstains

Doesn't the 2 year extended Apple Care plan proved the same type of coverage for just $69?

Nope, AppleCare doesn't cover drops, spills or other damage.

[nagromme]

[/quote]For other cellphones, the program costs between $7 and $10 per month depending on the model, but the iPhone's rate rises to $15 per month.[/quote]

So iPhone accident insurance costs 1.5x to 2x what insurance on other phones costs? Considering the real unsubsidized price of an iPhone is higher too, that seems pretty good! (~$700 for 16 and ~$800 for 32? do we know the latest full pricing yet?)

And if other smartphones cost $120/year for insurance while the iPhone's costs 50% more than that, I'd have to know the unsubsidized price of those other phones. Many will be lower, so--paying more is fair enough.

I prefer just to keep my iPhone OUT of the toilet

[al_bundy]

For other cellphones, the program costs between $7 and $10 per month depending on the model, but the iPhone's rate rises to $15 per month.[/quote]

So iPhone accident insurance costs 1.5x to 2x what insurance on other phones costs? Considering the real unsubsidized price of an iPhone is higher too, that seems pretty good! (~$700 for 16 and ~$800 for 32? do we know the latest full pricing yet?)

And if other smartphones cost $120/year for insurance while the iPhone's costs 50% more than that, I'd have to know the unsubsidized price of those other phones. Many will be lower, so--paying more is fair enough.

I prefer just to keep my iPhone OUT of the toilet [/QUOTE]



most other phones are close to the price of the iphone, best buy is just trying to make some money here because they think people will pay up

sprint says my work issued Curve 8330 is $570. now please don't hurt yourself laughing at that one

[brucep]

Originally Posted by Galley

Ha ha, that was a good one. For a moment there I thought they said $15 per month.

[iHSE]

Originally Posted by Galley

Ha ha, that was a good one. For a moment there I thought they said $15 per month.

I work for Best Buy Mobile and, while it does seem a lot, you'd be surprised how many people will buy the iPhone from us just because we're the only ones to offer protection against cracked screens and liquid damage. For the accident prone, it's a great plan. We also cover 1-time battery replacement.

Originally Posted by bluevoid

Just curious, where is the source stating that BB will have the 3GS on launch day? Haven't heard anything official, even on BB's forums...

I've received confirmation that we will be launching alongside Apple and AT&T on June 19th.

[cameronj]

Am I the first to point out that something that costs $180 for a year of coverage isn't "close to" what the iPhone costs, since it costs $499-699?

[iHSE]

Originally Posted by al_bundy

most other phones are close to the price of the iphone, best buy is just trying to make some money here because they think people will pay up

sprint says my work issued Curve 8330 is $570. now please don't hurt yourself laughing at that one

Well yeah, Best Buy is in the business to make money - but the iPhone is not cheap to repair. On average, to fix a cracked plastic screen on say, a BlackBerry Curve 8330, it will cost $95. It costs more than twice that to repair the iPhone's glass screen.

[al_bundy]

this is 2009, no one repairs anything anymore. you junk it and buy new. labor costs around $50 an hour including taxes and benefits so it doesn't make sense to repair most things.

[alansky]

It makes no sense at all to pay $180 a year to insure a device that can be re-purchased for $199 if necessary. So the question is: If you trash your iPhone, will AT&T sell you another one for the same $199 price if you're in the middle of an existing two-year contract? If not, then the insurance possibly makes sense for ham-fisted owners.

[cameronj]

Originally Posted by alansky

It makes no sense at all to pay $180 a year to insure a device that can be re-purchased for $199 if necessary. So the question is: If you trash your iPhone, will AT&T sell you another one for the same $199 price if you're in the middle of an existing two-year contract? If not, then the insurance possibly makes sense for ham-fisted owners.

ATT won't sell you a new one for $199. It will be $599 if you don't manage to keep it for 12 months before damaging it. If you manage to make it 18 months it will be $399. But the kind of people who buy insurance don't take good enough care to have it last that long. I personally don't understand how BB makes money on these deals - I've known several people who should have their picture in the dictionary under "moral hazard" when it comes to these insurance plans.

[cameronj]

Originally Posted by al_bundy

this is 2009, no one repairs anything anymore. you junk it and buy new. labor costs around $50 an hour including taxes and benefits so it doesn't make sense to repair most things.

The customer facing tech people at BB don't make $15 an hour, much less $50. The people who get the phone in the factory to repair it can't make $20 an hour.

[gwarf420]

Originally Posted by alansky

It makes no sense at all to pay $180 a year to insure a device that can be re-purchased for $199 if necessary. So the question is: If you trash your iPhone, will AT&T sell you another one for the same $199 price if you're in the middle of an existing two-year contract? If not, then the insurance possibly makes sense for ham-fisted owners.

They most certainly will not allow you to re-purchase at the new 2 year agreement subsidized cost. Look at all the people complaining that they can't get the subsidized pricing on the iPhone 3G S because they are still under contract on the 3G. It will be full retail unless you are close to the end of your contract, in which case, it may be reduced but not the full new customer price.

[jpoet]

Anyone have experience with SquareTrade?

http://www.squaretrade.com/pages/iphone-landing1


John

[macxpress]

Originally Posted by iHSE

Well yeah, Best Buy is in the business to make money - but the iPhone is not cheap to repair. On average, to fix a cracked plastic screen on say, a BlackBerry Curve 8330, it will cost $95. It costs more than twice that to repair the iPhone's glass screen.

Actually you can get a replacement screen for an iPhone 3G for $58.

Link

That is...if you wanted to fix it yourself!

[mac4youandme]

Do you know if it is possible to purchase the insurance upfront and prepay rather than putting it on your monthly phone bill? Also, are you getting the 32 GB model?

Thanks in advance for the information!

Originally Posted by iHSE

I work for Best Buy Mobile and, while it does seem a lot, you'd be surprised how many people will buy the iPhone from us just because we're the only ones to offer protection against cracked screens and liquid damage. For the accident prone, it's a great plan. We also cover 1-time battery replacement.




I've received confirmation that we will be launching alongside Apple and AT&T on June 19th.

[al_bundy]

Originally Posted by cameronj

The customer facing tech people at BB don't make $15 an hour, much less $50. The people who get the phone in the factory to repair it can't make $20 an hour.

add employee benefits, fica, medicare, unemployment insurance and other costs and that $15 hour salary goes up. i pay $90 an hour labor when i take my car in to the dealer, but i doubt if the guy working on it makes anywhere close to $90 an hour

[al_bundy]

Originally Posted by cameronj

ATT won't sell you a new one for $199. It will be $599 if you don't manage to keep it for 12 months before damaging it. If you manage to make it 18 months it will be $399. But the kind of people who buy insurance don't take good enough care to have it last that long. I personally don't understand how BB makes money on these deals - I've known several people who should have their picture in the dictionary under "moral hazard" when it comes to these insurance plans.

back around 2000 UPS won a case against the IRS. they had an insurance subsidiary in the bahamas and were able to take some huge tax breaks due to the "risks" they took on even though they rarely lost a package. read about it in the WSJ. within a year of UPS winning in court these insurance plans popped up everywhere.

best buy doesn't write them, there is a separate insurance company that takes on the risk. AIG was a big player in this and that part of the company made a lot of money.

[bonklers]

Originally Posted by cameronj

The customer facing tech people at BB don't make $15 an hour, much less $50. The people who get the phone in the factory to repair it can't make $20 an hour.

i worked at fry's electronics for a couple years as a tech, and when i left they charged $70/hour but paid me $15/hour. 1 good thing came out of my time there, i can fix my own laptops and when my iphone breaks i'll replace the screen or battery myself. I've already soldered a nano battery and removed the hard drive of an ipod classic, so it shouldn't be that hard.

The point of insurance is NOT to help out the customer, it is to make money for the company selling it. High labor costs go to BB not the technician.

[cameronj]

Originally Posted by al_bundy

add employee benefits, fica, medicare, unemployment insurance and other costs and that $15 hour salary goes up. i pay $90 an hour labor when i take my car in to the dealer, but i doubt if the guy working on it makes anywhere close to $90 an hour

Do you think the $90 per hour you pay has anything to do with the costs to the dealer of having that employee? If you do... well...

[cameronj]

Originally Posted by al_bundy

back around 2000 UPS won a case against the IRS. they had an insurance subsidiary in the bahamas and were able to take some huge tax breaks due to the "risks" they took on even though they rarely lost a package. read about it in the WSJ. within a year of UPS winning in court these insurance plans popped up everywhere.

best buy doesn't write them, there is a separate insurance company that takes on the risk. AIG was a big player in this and that part of the company made a lot of money.

BB sells the risk, but the cost of the insurance for BB does go up when customers use it more often. It's not a hard concept - if you're 80, smoke and have had 3 heart attacks, life insurance is VERY expensive (impossibly so, I bet), but if you're young and nubile, it's cheap.

BB may not be the insurer, but BB BUYs the insurance from the underwriter.

Back to my original point - "I personally don't understand how BB makes money on these deals - I've known several people who should have their picture in the dictionary under "moral hazard" when it comes to these insurance plans."

The fact that it's not BB who does the actual underwriting is totally irrelevant.

[AdamIIGS]

Bah, so after holding out SO long for an iPhone (or any cell .. that's right I've been without a cell phone for 4 years ... go me!), I pre-ordered my shiny new 3GS today... and found out I have to / had to pay almost 70 bucks in freakin' tax because I live in Cali and they tax you on the unbundled price... Sunshine Tax my butt, it's friggin' cloudy as hell today!

Hopefully we get our pre-ordered phones a couple days early though

[iHSE]

Originally Posted by mac4youandme

Do you know if it is possible to purchase the insurance upfront and prepay rather than putting it on your monthly phone bill? Also, are you getting the 32 GB model?

Thanks in advance for the information!

The iPhone protection plan is not tied to your AT&T bill. You make the first payment of $14.99+tax at the register when you buy your iPhone, then it is automatically taken out of whichever debit card or credit card (or Best Buy Card) that you want to use.

Yes, we will be getting the 32 GB model.

[charlituna]

Originally Posted by bloodstains

Doesn't the 2 year extended Apple Care plan proved the same type of coverage for just $69?

AppleCare gives you a second year of defect coverage. no accidents, loss or theft. And it's unlimited if it is legit defects. since most can't be fixed it's a swap to a service phone (a unit that comes without all the accessories etc) but you don't have to wait 3 days to get it blah blah.

I say rip off on the whole Black Tie thing. A lot of credit card companies now have buyers protection on purchases made with the card so check that. not to mention that many homeowners and renters insurance will cover computers and smart phones now. so check that too. granted it is only one time but how many times do you plan to drop, lost or have stolen your phone. is it really enough times to make $360 (to cover your contract term and likely as long as you might keep a particular model) actually worth it. granted it is only one time but how many times do you plan to drop, lost or have stolen your phone. is it really enough times to make $360 (to cover your contract term and likely as long as you might keep a particular model) actually worth it.

Originally Posted by cameronj

ATT won't sell you a new one for $199. It will be $599 if you don't manage to keep it for 12 months before damaging it. If you manage to make it 18 months it will be $399.

there are situations where you can get the display assembly replaced or buy a service phone from an apple store and it's still only around $199. it might be a refurb but that doesn't bother me cause I've had refurb stuff from Apple before and it never gave me any unexpected trouble.

doesn't do you any good if you lost the phone but at least when the issue is damage all hope might not be lost

[rrod182]

BB insurance is a rip-off. If you have home owners or renters insurance most will cover items like this, some already do. I added iPhone coverage to both mine and my wifes, $30 a year for both ($15 each) with no deductible, full replacement.

[al_bundy]

Originally Posted by rrod182

BB insurance is a rip-off. If you have home owners or renters insurance most will cover items like this, some already do. I added iPhone coverage to both mine and my wifes, $30 a year for both ($15 each) with no deductible, full replacement.

homeowners and renters claims end up on CLUE. best buy claims don't.

[casinoman59]

Here is a link for insurance that might be of interest. http://www.compcoach.com/Total-iPhon...iphoneplan.htm

[squarevince]

Originally Posted by jpoet

Anyone have experience with SquareTrade?

http://www.squaretrade.com/pages/iphone-landing1


John

Hi John, there's a long thread on the MacRumors forum that discusses the SquareTrade Warranty from last year:
http://forums.macrumors.com/showthread.php?t=524685

For those who haven't heard about SquareTrade, SquareTrade’s iPhone warranty DOES cover liquid damage (including immersion), drops, and other accidental damage from handling.

SquareTrade is much less expensive than Best Buy. Our new warranty pricing will be up next week, but the new 3gs warranty will be priced at $120 for the 32gb and $96 for the 16gb (after our current 20% ongoing discount). These prices are for 2 years of coverage. That’s one-third of Best Buy’s price or less.

For more information, go to:
http://www.squaretrade.com/iphone

Cheers
Vince Tseng
SquareTrade

[milkmage]

Originally Posted by bluevoid

Just curious, where is the source stating that BB will have the 3GS on launch day? Haven't heard anything official, even on BB's forums...

why wouldn't they? they're and official reseller.
i expect walmart to have them too.

you can always call the one closest to you.

back on topic. see if your existing insurance will cover you. i'll bet it's tons cheaper to get it added to your homeowners policy or whatever.

insurance might be a good idea (esp if you can get theft/loss protection).. my friend lost his 3G and could NOT buy a replacement for less than the unsubsidized cost.

so.. @rrod182, do you know if your insurance co. would have paid you the purchase price, or the full unsbsidized cost of replacing it?

[dfoltz]

Try your homeowners insurance. http://dougfoltz.wordpress.com/2009/...one-insurance/ I got my phone covered for $25 a year with a $25 deductible. Beats what Best Buy is offering.

[ZIGraphics]

The reason it's $15/month is because there is no deductible to have it repaired/replaced, I have BT protection and i've replaced it free twice for cracked screen. SquareTrade and every other program makes u pay when it's time to utilize

[howyoudoin]

I've had it on my iphone 3g for 9 months now. Cracked a screen once and spilled water on it (wouldn't charge). Based on policy I was suppose to get a loaner while they sent mine out but both times they just replaced it with a refurb in store (which I would rather do). Totally worth it for me. $15 a month is high but no deductible makes it worth it

[teckstud]

Sorry to go off topic- but why is this new model called the iPhone 3G S ? is the S for Steve?

[cameronj]

Originally Posted by teckstud

Sorry to go off topic- but why is this new model called the iPhone 3G S ? is the S for Steve?

1 - you're not sorry to go off topic
2 - yes, the S is for Steve

[tekneeq53]

That is why i tell everyone, buy an ottorbox case!!! most durable case i have had. I have dropped it on concrete and the phone worked just fine.

$15.00 bucks is a little high for insurance, but it may be the best thing if your prone to dropping it. However, if you buy an iphone at an at&t store im assuming that you cant by the insurance from best buy seperately. Also, what about lost or stolen phones? is that covered in the insurance? I didnt see anything about that.

3 best things that i bought for my iphone so far..... ottorbox case, mobile me, and i klear cleaning kit for my iphone and macbook.

[cameronj]

Originally Posted by tekneeq53

That is why i tell everyone, buy an ottorbox case!!! most durable case i have had. I have dropped it on concrete and the phone worked just fine.

I've dropped my completely unprotected iPhone on concrete a handful of times as well. Nary a scratch and of course the phone works fine.

[zinfella]

Okay, VISA said since I have cell phone coverage on my CC, that I'm covered for loss by damage or theft, for the length of the AT&T contract. So, who needs Apple Care, or BB coverage?