Why Are Smartphone Replacement Plans Costs Rising?

You may have noticed that the extended warranty, insurance or protection plan offered with your new smartphone likely has a drastically higher deductible than the last time you bought one. Why is that? Because the way we use (and abuse) our phones has changed over the last 5 years.

In the days of regular feature phones, many owners stuck with their same phone for much longer. Keeping a mobile phone for 2 to 4 years wasn’t uncommon. Feature phones were simple, bulky devices that we often kept using even after their plastic cases were badly worn, dented and cracked.

As smartphones arrived, owners started upgrading their phones in shorter periods to get the latest hardware features. Upgrading your phone every 2 years is common, and many upgrade every 12 to 18 months. Phones became lighter, thinner, and more complex.

Over the last few years, those extra plans started getting used more than ever before for a few different reasons. One of the most common replacement issues isn’t hardware, but software.

Smartphones are portable computers, and just like your computer, the software can flake out. In many cases, the same fixes that work for your computer work for the phone, like restarting it or reloading the software.

To add to the complexity are the tens of thousands of 3rd party apps available. I’ve seen individual apps on every platform cause battery issues, lock up a phone and generally cause issues that make an owner think their phone’s hardware is “broken”.

Many owners will insist on an immediate replacement for their phone, even when it’s clearly not the hardware at fault. Issues with the phone’s OS, a poorly written 3rd party app, problems with the carrier, or even just a new owner that doesn’t fully understand the function and limitations of their phone’s platform can create the desire to replace the phone’s hardware.

It also doesn’t help that people seem to be more clumsy with what is a $500 to $900 (unsubsidized) device. And now that many companies are offering to buy your old smartphone, many owners look to replacement plans to get a “fresh” phone free of cracks, dents and general wear and tear to get the most money back.

That’s not to mention the increase in theft of smartphones due to the growing black-market opportunities for the hardware.

Over the last few years, this has driven the number of replacement phones requested through all the different retail and carrier stores exponentially.

This exponential increase in the number of smartphone replacement requests drastically increases the costs of the plans for retailers and carriers, and quite often decreases replacement inventory to the point where certain highly-replaced model phones can have 2 to 6 week wait times for new inventory.

In what’s likely an attempt to reduce the number of replacements made, I’ve seen that nearly every retail and carrier that offers these plans has increased the “deductible” per replacement incident. Most companies will charge $150 to $200 for an accidentally damaged phone replacement. Even Apple’s generous AppleCare program has increased their incident fees.

So keep that in mind when complaining about any one company’s plans and threatening to go to another. The grass is equally expensive on the other side.

One thought on “Why Are Smartphone Replacement Plans Costs Rising?”

  1. I am interested in acquiring a smart phone; however, I have NO idea how to begin the process of selecting one. Since you are an expert, any advice you have for me would be most appreciated. Thank you for your time. 🙂

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