[Spliffdaddy]

1st quarter results reflect the fact that Apple has serious quality issues. Any idea what would have caused such a massive upsurge in claim activity? It's way, way, way out of line with what is considered normal. Unless sales also increased 59% during the same time period, which didn't happen.

Thoughts?

59%

[ManOfSteal]

Damn, that's pretty bad to say the least...

[Disgruntled Head of C-3PO]

Does it just mean someone called under warranty or something had to be repaired?

[Spliffdaddy]

Originally posted by Disgruntled Head of C-3PO:
Does it just mean someone called under warranty or something had to be repaired?

It means that Apple spent 59% more on warranty-related expenditures in the 1st quarter than in the previous quarter. Which would be OK if sales had increased 59%, as well. But they didn't.

Granted, the overall warranty expenses absorbed by Apple are still rather good....but another bad quarter or two could be a trend developing.

I thought it was interesting that, of all things, hard drive manufacturers have such high warranty claims across the board. Apparently, having a 5% defect rate is average. I'm not sure how computer manufacturers are able to have warranty claims under 5%, when they use hard drives which tend to fail at that rate.

(edit: I interpreted the data wrong. It shows warranty costs as a percentage of retail sales. Which may not have much to do with a product's failure rate).

[ManOfSteal]

I doubt the "Apple iBook Logic Board Repair" program helped very much...and now they are replacing the PowerBook LCD's with the "white-spot" issue...

[AB^2=BCxAC]

85% of Applecare calls in the last year go EXACTLY like this.

Applecare: "describe your problem..."
Customer: "It won't turn on. It just happened. One minute it was working the next, it wasn't! What a piece of crap!"
Applecare: "Did you drop your iPod? Did you tamper with the battery?"
Customer: "uh....well, uh, you see... It's broke, so now you gotta fix it!!!"

[djohnson]

The logic board, specifically the airport controller, went out on my brand new PowerBook. It took a long time, but I finally got it back. Not a single problem since. At least their service is good!

Oh and I bet most were iPods that people dropped.

[ASIMO]

I contributed. Premature PowerBook battery death. Relatively minor issue, but an issue nonetheless. Now, the new battery yields me more than four hours of charge.

[wdlove]

When I was at the Apple Store on Sunday a lot of ipods were being brought in for repair.

My wife just had her 15" PowerBook in for repair yesterday the Superdrive had to be replaced. This is the second repair in just the first year of ownership.

[Diggory Laycock]

iBooks.

[Spliffdaddy]

When compared to other computer manufacturers, Apple's quality appears better than most, if not all, of them. Compared to *all* other companies, Apple appears to be doing better than most of them. Don't misunderstand me...I'm not suggesting that Apple's quality (or reputation) is bad. I just happened to stumble across that Top-50 ranking of companies while researching an unrelated topic. I noticed that Apple Computer fared poorly, and then I wondered why. There is probably a simple, unremarkable explanation for the 59% 'spike' - bookkeeping, for one. Was the previous quarter exceptionally low?

From the website link I posted >

What follows is a ranking of the top 50 warranty providers by the percent change in the amount of claims, in dollar terms. Warranty Week has received a fair amount of criticism from readers for always ranking based on claims as a percent of sales, and always placing those with the highest claims rates at the top of the chart. Some readers worry that marketing types will equate high rates with bad products, and low rates with good products. Setting aside the obvious differences in product type, materials, longevity, and durability, there are numerous other good reasons why claims and accrual rates are not directly comparable between companies.

[Skip Breakfast]

In my store I've seen an awful lot of PM G5 towers come in, and LOADS of iPod problems (which we can't resolve).

[TheJoshu]

My first Mac, as a kid, was an SE/30. I've been loyal ever since. Had to bring in a 1st-gen iMac DV/SE due to faulty RAM in Dec. 1999, but other than that, I've never had a problem. That is, until this summer. The hard drive on my year-old 1st-gen 12" PBG4 died, and then a few weeks later a refurb-from-Apple iBook G4 arrived in need of a new motherboard. Tried to go through the Apple Store and then TekServe to repair, and found the experiences all deeply unpleasant. I wasted way too many hours on those issues this summer.

[Truepop]

I say ipod.

I've gone through two first gen 10GB and three 3G 30GB because the hard drives kept crapping out.

[ManOfSteal]

Repair backlog on Apple portables...

[Spliffdaddy]

In what appears to be some sort of worst-case-scenario-come-true, Apple spent 1.6% of their revenue from 1st-quarter sales on warranty-related expenses. Pfft.

That's about ten times better than I would have guessed. Seriously, what percent would you have guessed? 15% ?

Quality-wise, Apple is in good shape. I agree the that iPod might be a factor in the recent increase in warranty costs. There's really no way to service it, which means it's easier to simply replace it. Which has got to be expensive. It's essentially a circuit board and a hard drive, with the hard drive being responsible for nearly the entire cost of the iPod. It ain't got very many serviceable parts.

[TheJoshu]

Originally posted by Truepop:
I say ipod.

I've gone through two first gen 10GB and three 3G 30GB because the hard drives kept crapping out.

Hm. Does 59% account, then, for the huge increase in marketshare? If adjusted, could that make the number seem less damning?

[Y3a]

a 59 percent increase to 1.6 percent. So it was about 1 percent last time? The summertime and drunk careless iPod users could account for it.

[MacNStein]

I know the iBook logic board REA program cost Apple a ton of $. The store I frequent (and own a small part of) has sent of a huge number of them to be repaired. I'd hazard to guess that the REA program along with the iPod are 90% of the new claims.

As for why the iPod claims are so high... most are probably kids who don't know how to take care of their stuff.

[Eriamjh]

Hmmm. It does depend on how it is calculated.

If Apple fixes 1.0% of all units shipped and repairs go up 59%, then they are now fixing 1.59% of all units. That is only a 0.59% increase.

It depends on what you are calculating the percent OF.

Remember: A company with 1$ in profit has a 1 million percent increase if the next profit is $10,000. However, a company with a profit of $.01 one year increased to $10,000.01 (the same $10,000) is over 100 million percent!

So which is it?

[Spliffdaddy]

Maytag - "the dependability people™"

Have warranty claims which are double that of Apple's (1.6% vs 3.2%).

nice little factoid.

[Spliffdaddy]

Originally posted by Eriamjh:
Hmmm. It does depend on how it is calculated.

If Apple fixes 1.0% of all units shipped and repairs go up 59%, then they are now fixing 1.59% of all units. That is only a 0.59% increase.

It depends on what you are calculating the percent OF.

Remember: A company with 1$ in profit has a 1 million percent increase if the next profit is $10,000. However, a company with a profit of $.01 one year increased to $10,000.01 (the same $10,000) is over 100 million percent!

So which is it?

It's calculated like this:

Total cost of warranty claims divided by Gross revenue from sales of product equals percentage of gross revenue spent on warranty claims.

Even if sales double, the percent of warranty claims should remain steady - contrary to what I stated earlier.

[mitchell_pgh]

It's the iPod...

[RAILhead]

I blame Halliburton.

Maury

[mitchell_pgh]

I worked at Best Buy for a while... at one point, 60%+ of our HP computers were coming back...