Thanks to our fans, word is getting out about how we help save your money and your gadgets! SquareTrade was featured in Gizmodo Friday: SquareTrade's iPhone 3GS Warranty Covers Clumsiness, Stupidity, and Human Nature
....and our updated iPhone study has been featured in TechCrunch: iCrack: The iPhone Is An Accident Magnet
The study has generated quite a buzz! You can view the full study or check out coverage in the news.
Mark Arnold was hanging out by his local river when he pulled out his Apple iPhone to make a call. It flew right out of his hand, smashed hard against a rock and then fell into the drink.
"So I'm thinking impact and water damage," says Arnold, "nice double whammy, there." Luckily, he'd taken precautions.
When Arnold bought an extended warranty for his iPhone, he took the option to add Accidental Damage from Handling (ADH) coverage. SquareTrade, his warranty provider, now reports that 50% of all iPhone owners who buy a SquareTrade warranty also buy ADH - almost double the rate for all other cell phones - and while the ADH rider is offered on everything from laptops to GPS devices, the numbers show it's the iPhone that needs it the most.
"There's something delicate about the iPhone that makes people think something has to go wrong," says SquareTrade CEO Steve Abernethy. "It's going to slip right out of their hand and break on the kitchen floor."
A lot of them do. Nearly all iPhone claims - 85% - made on SquareTrade policies are accidental damage claims, more than all other cell phones combined.
The iPhone's smooth glass and metal surfaces often make for a slick, tough-to-grip gadget. Cracked screens from drops on hard tile floors are by far the most common problem, and the $400-500 phone is known to slip out of pockets as people get in or out of cars. One SquareTrade customer described watching a TSA screener accidentally bang their iPhone against the metal exam table while passing it through airport security.
The table won that encounter.
Silicon grips and carry-cases are now almost as standard as iPhones themselves, but none are fool-proof. SquareTrade received one claim where the iPhone was in a protective case - and in the owner's pocket - when the man slipped and fell down. He later found his phone's face completely ruined.
iPhones also have a tendency to go swimming. In addition to Mark Arnold's river mishap, SquareTrade claimants have spilled various liquids on their iPhones and one slightly embarrassed individual sent theirs right down the toilet bowl.
Despite - or because - of all this, SquareTrade is currently the only warranty provider offering accidental damage coverage on the iPhone.
Interestingly, most of SquareTrade's clients spend their cash reimbursements on another iPhone. Arnold admits he went out and bought a new one the same day. "I use it for business purposes. I felt I kinda needed one."
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After taking a good sample of SquareTrade warranties, we can report a 16.4% failure rate for the Microsoft Xbox 360.
These numbers represent 171 claims made on a sample group of 1040 Xbox 360 warranties purchased between April 1 and July 31, 2007, shortly after we began offering warranties on gaming consoles. All claims were normal-use mechanical or electrical failures from non-commercial units. No accidental damage issues were included.
PLEASE NOTE: this report only tracks this test group for a period of 6 to 10 months after warranty purchase (ending January 31, 2007). Once this same test group is tracked for 24 or 36 months, the fail rate is certain to go up. Our data shows that failures spike in the third month after warranty purchase but remain fairly steady after that, with only incremental drop-off until the eighth month. This pattern is fairly consistent with all electronics failures.
Also, after Microsoft's well-publicized warranty extension, it is possible some of our warranty owners are not reporting failures to us, but going directly to Microsoft. If so, our 360 fail rate is skewing lower than is entirely accurate.
The sample group includes all three Xbox SKUs available at the time;
• 27 Elites, the 120GB flagship model.
• 57 Core models, the basic package.
• 956 Premiums, the standard 20GB model.
Splitting out the Premium model results in a slightly higher fail rate: 17%. The low volume of Core and Elite warranties/claims (one claim on an Elite, eight on Cores) in the sample group does not make them acceptable statistical candidates on their own.
Out of the 171 claims, 102 were "Red Ring of Death" (RROD) general hardware failures. This represents roughly 60% of all claims, and 9.8% of all warranties in the sample group. It's believed that overheating is the main cause.
Of the other 69 claims;
• 18% were disc read errors.
• 13% were video card failures.
• 13% were hard drive freezes.
• 10% were power issues.
• 7% were disc tray malfunctions.
These would NOT be covered by the extended Microsoft warranty, and are therefore more reliable numbers. Overheating (without a Red Ring error), controller connectivity, and undetermined errors made up the balance of claims issues.
In July 2007, Microsoft announced hardware changes to fix the Xbox's overheating problem. It is unlikely any modified Xbox 360s were a part of our sample group.
Also in July, Microsoft extended their warranty to three years for RROD issues ONLY, with a $1 billion fund set aside to cover repair/replacement costs for "any Xbox 360 console that experiences the “three flashing red lights” error message." We have referred our warranty owners with RROD issues to Microsoft since that time (and offered pro-rated refunds) while continuing to service all other 360 failures within our 5-day turnaround window. Microsoft's turnaround is reportedly anywhere from one to three weeks.
SQUARETRADE
Analytics Team
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Our analytics team just finished running a report on the reliability of the Microsoft Xbox 360, and discovered it has a 16.4% normal-use failure rate.
That's roughly half the 33% failure rate once claimed by Best Buy, Gamestop and EB Games, but way above the standard 3-5% failure rate Microsoft announced a year ago... the only official numbers they've ever released. By comparison, their main competition - Sony's PlayStation 3 - hovers in the 3% range for hardware failures.
Gamestop indefinitely suspended sales of product replacement plans for all 360s last October.
Not surprisingly, the dreaded "Red Ring of Death" played a heavy part in our report, factoring into 60% of all service calls. Almost from day one, three flashing red LED lights on the power display (signaling a general hardware failure) has symbolized the 360's reputation as a machine with serious design flaws. Damage caused from severe overheating soon reached epidemic proportions. Peter Moore, Microsoft's then-Vice President of Interactive Entertainment Business, finally responded last July by retroactively extending all Xbox 360 warranties to three years at a cost of 1 billion dollars, but only for Three Red Lights issues.
The other 40% of the Xbox's hardware failures are limited to the standard one-year warranty. Microsoft charges $99 to fix any non-Three Red Lights issue, with a reported turnaround time of 21 days.
Disk read errors account for nearly half of all non-TRL claims. Other problems we see crop up fairly often are fried video cards, hardware freezes, on/off failures and, interestingly, disc tray malfunctions that also tend to damage game discs.
Last June, Microsoft released modified hardware on all new and repaired 360s, adding a second GPU heatsink to fix the console's overheating problems. It's highly unlikely any modified 360s were included in our report.
UPDATED: The full report, including numbers and methodology, has been released.
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Based on the rate of claims made on thousands of warranties issued for the Motorola Razr V3, SquareTrade has announced the popular cell phone has an 18% failure rate over a two-year period of normal use.
These numbers reflect Motorola Razrs purchased in brand-new condition, across all hardware generations and carriers. Accidental Damage claims were not included.
The overwhelming majority of Razr claims - 58% - were unexplained general failures that rendered the phone completely unusable. Razrs bricked in this way were reimbursed without an attempt to repair. No satisfactory cause was determined for these failures, though they were determined to be mechanical or electrical in nature. Software errors, not covered by SquareTrade's warranty, were ruled out.
T-Mobile and Cingular Wireless suspended sales of Razr handsets for several days in March 2006 - during the SquareTrade study's time frame - due to a component issue that led to widespread dropped calls and power-downs. Motorola never disclosed which component caused the problems. SquareTrade's report shows a 4.5% dropped call claim rate, and 5.2% unexpected power-downs on a charged battery. By comparison, 8% of all Razr screens failed in the first two years, with keypad breakdowns following at 5.7%.
Other major issues included phones that couldn't be shut down or turned on (5.5%), and phones that either could not call out or had poor call quality (4.5%). The Razr's well-known battery issues only accounted for 3.7% of all Razr problems.
The Razr's slick design put Motorola at the top of the cellular phone market when it became available to the masses in 2005, but it's since been overshadowed by more powerful smart phones. While the Apple iPhone, Blackberry, and various LG phones have brought a steady stream of new features and innovations to consumers, the once-dominant Razr has only seen a few scant upgrades to its original design. A recent CEO shakeup and layoffs followed a disastrous few quarters that have many speculating the company will only break even when final numbers for 2007 are released.
Despite loosing 10% of their global market share in six months, last summer's introduction of the RAZR2 and a lack of new announcements at this year's CES indicates Motorola is sticking by its guns.
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Motorola Razr problems, Razr warranty
Our analytics department released some interesting numbers this morning.
Based on the rate of claims made on the thousands of iPod warranties issued by SquareTrade, the Apple iPod Classic purchased in brand-new condition has a 12.4% failure rate in its first year of use. By comparison, the iPod Nano measures in with only a 5.2% failure rate.
These numbers run across hardware generations and only represent mechanical or electrical failures covered by the standard warranty. They do not include Accidental Damage claims.
The now-discontinued 40 GB model, long regarded as the problem child of the iPod line, has the largest percentage of claims of all the iPod Classics, followed by the 20 GB. Problems typically range from docking/synching errors, freezing during playback or simply refusing to turn on. The 60 GB and 30 GB models show 9% and 9.4% normal-use failures respectively, well under the curve.
The Nano tends to brick in the same way, but on a smaller scale. Apple's popular 2 GB Nano shows 7.2% failures in the first year, but the 4 GB version drops to only 3.8%. Nanos use more durable flash drives over the Classic's hard drive, which might explain their greater reliability.
However, CompactFlash II drives didn't help the Nano's predecessor, the iPod Mini. According to our claims data, the overall Mini failure rate is stable at nearly 13%, usually due to standard-use hardware failures.
In all cases, attempts to reset these iPod did not fix the problem, and more extensive repairs - or complete refunds - were necessary.
It's too early in the life cycle of the 80 GB and 160 GB Classics (and the 8 GB Nano) to release accurate numbers on their reliability, but there were no significant hardware changes from the previous generation and reports of software issues persisted through November. Nevertheless, the iPod's infamous battery issues seem to be on the decline, and given that the overall failure rate across all makes and models is only 8.4%, it is unlikely that Apple will make any major manufacturing changes anytime soon.
iPod warranty, iPod insurance
