Apple to drop prepaid multi-year AppleCare+, but keep subscription option

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in General Discussion edited February 2

Apple products will continue to come with a year of AppleCare included in the purchase, but the company reportedly intends to move its extended AppleCare+ plan to a subscription-only model.

Red Apple logo above the text AppleCare Plus on a white background.
AppleCare logo -- Image credit: Apple



A new report claims that Apple will stop offering extended AppleCare plans at retail worldwide, including its own Apple Stores. The AppleCare+ subscription option will continue to be offered online, as it has since 2019.

The shift is expected to take place before the end of February 2025.

Going forward, the company may just continue to sell prepaid two- or three-year AppleCare+ plans online, at least for now. Consumers can also opt to buy the monthly subscription for AppleCare+, which currently can be extended indefinitely, said Bloomberg's Mark Gurman in a tweet on X.

A notable change coming to AppleCare+ next week: Apple is dropping the 2-3 year pay in advance option at physical retail stores and on devices and will only offer monthly and annual subscriptions. You'll still be able to get those multi-year plans on the online store.

-- Mark Gurman (@markgurman)



The included AppleCare warranty only covers defects found in the product, along with 90 days of free telephone support. AppleCare+ extended warranties cover accidental damage for most hardware products, apart from the Apple TV, and include two years of free telephone support.

AppleCare+ extended warranties



Buyers could previously add AppleCare+ at the point of purchase, or online through Apple within 60 days of purchase. Starting in the second week of February, prepaid options will be dropped at all retail outlets, but will continue to be offered from Apple's online store.

The retail AppleCare+ plans had a longer lifespan than the one-year AppleCare warranty, but could be purchased in advance for a maximum of two or three years, depending on the device purchased. Apple introduced the indefinite-length AppleCare+ subscription option in 2021.

The subscription option gives buyers the choice of covering their purchase for as long or as little time as they desired. The subscription is in effect a lifetime warranty, as long as the user keeps paying the monthly charge.

Collection of Apple products including a MacBook, iPad, iPhone, Apple Watch, AirPods, HomePod, and Apple TV, with an AppleCare logo in front.
Products covered by AppleCare warranties for the first year of ownership.



AppleCare+ is available for multiple classes of Apple products: Mac, iPhone, iPad, Apple Watch, Apple Vision Pro, Headphones, and TV & Home. Monthly prices for eligible subscriptions range from as low as $2.49 for an Apple Watch to $24.99 monthly for the Vision Pro.

Plans for the Mac and Apple Displays AppleCare+ subscriptions can be billed annually, starting at $34.99 per year for extended Mac coverage and from $49.99 annually for an Apple display. Any current purchased two- or three-year warranties will continue to be honored until they expire. Prices above are in USD.

Rumor Score: Likely

Read on AppleInsider

Comments

  • Reply 1 of 5
    The catch which is not mentioned in this article is that the Applecare+ warranty cannot be transferred to another owner/account, whereas the prepaid version can be.  So if you have a subscription Applecare+, it is only good for the original subscriber.  This is a way that Apple is preventing Applecare+ being purchased by anyone other than the original owner.  So if you buy a used Apple product, be aware you will not be able to get Applecare+ even if it was recently purchased.
    realjustinlongMisterKitdewmewatto_cobra
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  • Reply 2 of 5
    That's interesting. It does raise a few questions.

    * Can you just decline the monthly "subscription" at the Apple Store point of sale and then just pay that one-time online within 60 days?
    * Are they reacting belatedly to many people waiting longer between replacements? Having a 3 year warranty plan, in some ways, sets an (incorrect) expectation that your phone has reached the end of its life and needs to be replaced. Many IT departments prefer to have computers under warranty so do think of their computers this way. A perpetual warranty gives people some confidence that their phone is safe or, at least, removes warranty as an arbitrary lifespan.
    * Is the intention to at least draw some revenue from older phones?
    * Is there a difference in accounting when seeing revenue as recurring rather than up-front?
    watto_cobra
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  • Reply 3 of 5
    dewmedewme Posts: 5,862member
    That's interesting. It does raise a few questions.

    * Can you just decline the monthly "subscription" at the Apple Store point of sale and then just pay that one-time online within 60 days?
    * Are they reacting belatedly to many people waiting longer between replacements? Having a 3 year warranty plan, in some ways, sets an (incorrect) expectation that your phone has reached the end of its life and needs to be replaced. Many IT departments prefer to have computers under warranty so do think of their computers this way. A perpetual warranty gives people some confidence that their phone is safe or, at least, removes warranty as an arbitrary lifespan.
    * Is the intention to at least draw some revenue from older phones?
    * Is there a difference in accounting when seeing revenue as recurring rather than up-front?
    I tend to keep my Apple products for longer than the time-limited AppleCare+ subscription so this has been a benefit, convenience, and added peace of mind for me. Whether it is financially sensible is kind of a crapshoot depending on your usage and duration of ownership patterns. If I think about things that are most likely to crap out, like batteries, the battery replacement value diminishes over time because you’re effectively prepaying for the battery replacement. In that case, having the battery give up the ghost shortly after the time-limited AppleCare+ expires and you change over to the subscription model is a good thing. But any catastrophic repairs will take longer to reach the point where you have essentially prepaid for the repair or replacement. 

    It will be interesting to see just how long Apple allows you to keep paying for AppleCare+ on older machines, especially ones that are no longer supported.

    For me, one of the main reasons for pushing off upgrades is because the residual value I’m getting from an older Apple product is always much better than the pathetic trade-in value that Apple offers to offset the cost of a newer version. I know some people have a nearly fetish level of attraction (non sexual of course) to owning the latest and greatest hardware and hardware-dependent features whether or not their current version is meeting their needs. For a lot of people the value of any Apple product is based on what it does, not what it is. When I see that Apple will give me $25.00 USD for a 3-4 year old product that I still find to be quite useful, it’s very hard to justify upgrading to a new one.

    The down side of keeping working older products around is that you can end up with a houseful of still working Apple products that you feel are more valuable than what their trade-in or salvage value is. For me, I try to give my older but still working as well as they ever did Apple products away or donate them to charity. Otherwise my house would be cluttered with more Apple products than I’ll ever need. It may be more financially beneficial to trade them in or sell them while they still command a higher price. I’m sure it would be easy enough to do an economic analysis, like most businesses do, to come up with a strategy for upgrading products and paying for extended warranties that minimizes your total cost of ownership. Most companies I worked for did bulk computing refreshes every three (3) years, but with the longer period of viability for newer Apple products the cycle could be quite different, plus I can’t depreciate my personal products like businesses do.
    edited February 3
    watto_cobra
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  • Reply 4 of 5
    melgrossmelgross Posts: 33,662member
    My wife, my daughter and I have been in the subscription model since it came out. This is great. Much better than the usual version. Ny paying monthly, you can stop payments when you give up your phone without a problem. Before, it was a hassle, unless you gave your phone back to Apple. Also, as much as I can recall, you couldn’t renew it when it ended. Now you can renew it for as long as you like. For less expensive products, it might not pay, but for more expensive ones, having an extra year or two of warrantee would be helpful for these who keep their devices linger. 
    watto_cobra
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  • Reply 5 of 5
    I wonder if Apple has customers who pay for Apple Care even when they no longer have the device.
    watto_cobra
     1Like 0Dislikes 0Informatives
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