Apple(s appl) is making some simplifications to its AppleCare program for iOS . Starting on Tuesday, when you purchase a new iPhone or iPad, you have 60 days — up from 30 — to decide whether you want Apple’s extended warranty.
When you purchase an iPhone or an iPad, you get free 90-day coverage that includes tech support and a one-year warranty against manufacturing defects. If you want a two-year warranty, there were previously two available option: The $69 AppleCare plan, and the $99 AppleCare+, which was first introduced with the iPhone 4S in 2012. The salient difference between the two plans is that AppleCare+ covers accidental damage up to two times, with a $69 replacement fee for an iPhone or a $49 replacement fee for an iPad.
Now the lower-cost option is going away, leaving AppleCare+ as the only extended warranty Apple offers on its devices, as first reported by 9to5Mac. This change makes it a lot simpler to explain and sell AppleCare to a prospective iPhone customer: you’ve got one option for extra coverage, it covers dropped phones, and it costs $99.
AppleCare+, even though it is a warranty and not a device insurance plan, offers comparable value to such plans at a lower cost. While insurance rates vary from carrier to carrier, they often consist of a monthly fee plus deductible. For instance, AT&T charges $6.99 per month plus a $200 deductible to replace an iPhone 5S, but that plan does cover loss and theft as well as cracked screens.
Apple’s pushing AppleCare+ for a reason. As CEO Tim Cook said last July in an internal meeting, only 20 percent of iPhones are sold at Apple Stores, which is significantly lower than the proportion of iPhones that go through Apple Stores for tech support. Earlier this week, Apple made it possible to buy a full-price unlocked iPhone and connect it to either an AT&T or T-Mobile prepaid plan in-store. By having attractive Apple-based alternatives to both cellular service activation and device insurance — two services traditionally sold at carrier stores — it has suddenly gotten a lot easier to buy an iPhone from an Apple Store, and just might represent the first shockwaves to the carrier-subsidy model in the United States.