Applecare+: Reason enough to buy an iPhone

Let me recount a sad tale.

Nikki dropped her Samsung Droid Charge in the toilet about 2 weeks ago.  This phone cost her $200 when she purchased it new.  This $200 was a subsidized price.  Verizon gave her a discount, according to their site HERE, of $300.  This is how the cell phone market works here in the U.S.  Cell phone carriers love to give you a subsidy in order to get you locked into that nice 2 year contract.  However, they don't love to give it to you any sooner than they have to, which for most carriers, is between 18-24 months.  Ok, so back to the story.  Nikki's $499(retail price) phone is now dead.  What are her options?  Well, when she goes in to Verizon, they will kindly tell her that she is eligible for an upgrade in roughly 15 months and can get a discounted phone then. In the meantime, she can pay full retail price to buy a new Droid Charge.  They will happily sell her this phone for $499.  She will leave the store with a new phone and will now have invested $700 into her phone when we factor in the price of the phone she purchased 5 months ago.  This is the Samsung, LG, HTC, Blackberry, Motorola way.  If I am mistaken, please correct me in the comments.  Now let me explain the Apple way.

If you buy a 16GB iPhone 4S on a 2 year contract, the price of the phone is $199.  The full retail price of this phone is $649.  You receive a discount of $450.  You also have the option to add Applecare+, a $99 coverage plan of a two year duration.  Let's now investigate two scenarios had Nikki's situation occurred with an iPhone with and without Applecare+.

Without Applecare+

Nikki drops her 5 month old iPhone 4S in the toilet.  The phone is completely dead.  She schedules a genius bar appointment at the Apple store.  The store will give her two options.  She can pay $199 and receive a new iPhone 4S.  Now APPLE is giving her the $450 discount.  This will replace her phone and her warranty will continue until the end of the 1 year mark from the original purchase of her iPhone 4S. She has now invested $400 total.  Or she can purchase Applecare+ for $99 and she must pay iPhone replacement cost of $199.  However, as a kind gesture, Apple will discount the replacement phone cost by $50.  So she would pay $149 + $99 and now you have a new phone and coverage for 2 years from the original purchase date. She has now invested $450.

With Applecare+

Nikki would have paid $299 for her phone at time of purchase, this being the $199 cost of the phone and the $99 Applecare+.  Nikki drops her 5 month old iPhone 4S in the toilet.  The phone is completely dead and so she schedules an appoint at the Apple store.  She walks in, pays $49, and leaves with a new iPhone 4S.  She has now paid $350 total and is still covered for the 2 years from her original purchase date.

Luckily Nikki's sweet mother let her use her upgrade and we purchased Nikki a new iPhone 4S at the subsidized price and added Applecare+.  So, were the same fate to strike twice, we would fall into the third scenario listed here.

Lesson to be learned?  Buy an iPhone. 

Note:  I really hate the Verizon employees.  I don't hate them on a personal level but I hate them for talking Nikki out of the iPhone when she went to purchase one back in June.  She isn't the only one either.  I have heard from other people that AT&T employees have done the same thing.  Why would this happen?  Why would Apple's partner carriers talk people out of the iPhone, which, as we learned today, has a 96% satisfaction rate?  I have no idea.