Entries in carrier (2)

Sunday
Dec102017

Warranty vs Insurance and what it means for you

 

When purchasing smartphones and mobile devices such as iPhones, Androids, Galaxies and tablets the most common question that comes up; typically from a sales rep at your carrier store is: "Would you like insurance for the device?"

Often times we see confusion around what a warranty is, what insurance is and even extended warranty and what they do and don't cover.

 

 

 

  • Warranty

 

 

A warranty is "contract" or claim between the consumer and the manufacturer that the purchased product from said manufacturer will be free of defects in materials and workmanship or it will be replaced within a period of time. Most manufacturers offer a 1 year (12-months) [limited] Warranty whch vary according to jurisdiction, but commonly new goods are sold with implied warranty that the goods are as advertised.

 

  • A warranty is typically free and included with a the sale of a new product from an authorized vendor.

 

"In the United States, various laws apply, including provisions in the Uniform Commercial Code which provide for implied warranties. However, these implied warranties were often limited by disclaimers. In 1975 the Magnuson–Moss Warranty Act was passed to strengthen warranties on consumer goods. Among other things, under the law implied warranties cannot be disclaimed if an express warranty is offered, and attorney fees may be recovered. In some states statutory warranties are required on new home construction, and "lemon laws" apply to motor vehicles."

What this means for you as the end-user customer is if you purchase a device such as an iPhone from Apple they are guaranteeing the device will last a full 12months (1 calandar year) from the date of purchase.

There are exceptions to this implied warranty, such as physical damage, customer tampering and unauthorized modifications.

When a manufacturer produces a [tangible] product they know the exact specifications, working conditions and capabilites of the device. In the case of a phone, it will function as claimed, it will not show any signs of failure, it will remain in good physical condition and lastly it will meet the customers expectations of usability. 

When a customer changes the device from its original condition, as with a broken or cracked screen from a fall or drop, this invalidates the warranty and the claim between the end-user and the manufacturer. At this point the warrenty is no longer valid for said device. 

Another example of a warrenty no longer being valid is when the user chooses to open the device and make modifications outside of the normal operating conditions. This could be such as modifying the software on android by rooting it to run un-approved third party applications, or in the case of an iOS device; jailbreaking would open up the software in the device to make changes that were not intended from the manufacturer.

Exceptions to this are laws passed such as the Magnuson-Moss Warranty Act 

The statute is remedial and is intended to protect consumers from deceptive warranty practices. Consumer products are not required to have warranties, but if one is given, it must comply with the Magnuson-Moss Act.

Enacted in 1975, the federal statute governs warranties on consumer products. The law does not require any product to have a warranty (it may be sold "as is"), but if it does have a warranty, the warranty must comply with this law. The law was created to fix problems as a result of manufacturers using disclaimers on warranties in an unfair or misleading manner.

 

Examples of valid warrenty claims:

 

  • Device not booting
  • Faulty battery causing random shut downs
  • Software inconsistencies 

 

 

Examples of invalid warrenty claims:

 

 

 

 

 

  •  
    • Insurance 
  •  


    Insurance is an optional form of protection on a device often sold with the product at the time of sale.

    Insurance is a means of protection from financial loss. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.

    An entity which provides insurance is known as an insurer, insurance company, or insurance carrier. A person or entity who buys insurance is known as an insured or policyholder. The insurance transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate the insured in the event of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms, and must involve something in which the insured has an insurable interest established by ownership, possession, or preexisting relationship.

     

 

 Mobile phone insurance is rarely provided by the manufacturer or vendor, but instead offered by bigger companies. Within the mobile device market exsists 3 main insurance providers; SquareTrade, Asurion, Geek Squad.

 

Mobile phone insurance exsists to cover the gap between a warranty and physical damage caused to a device.

 

Phone insurance is normally provided with a month by month plan ranging from $15 - $99 as well as a Deductible at the time of the claim. The insurance companies will "repair" or replace the device with a unit of the same or similiar model when requested.

Different from a warranty, the insurance will offer a solution when presented with a broken device such as a cracked screen, broken charger port, or liquid damaged device.

The insurance plan is typically attached to a customers bill ontop of a carriers monthly account. This is because most often the carriers are given a share of the payment which is typically passed down to the sales reps in the form of commission, although most insurance providers will offer open enrollment in periods shortly after a device was purchased.

On the surface insurance seems like a great option to protect your investment and potentially extend its life, there are some downfalls which are often not mentioned.

Insurance is a cash cow for everyone involved except the customer, as mentioned previously the sales rep earn commission when included with the sale, this may be at a retail location such as Best Buy, Verizon Wireless, AT&T, Sprint, T-Mobile. Often times the insurance plans will require a monthly fee plus a payment (deductable) when the user starts a claim. Most of the time this amount will exceed the amount of any repair that could have been performed at a local repair shop. When submitting a claim through an insurance provider you often need to provide the original receipt with proof of purchase for insurance. Once this is provided a representative will open a claim with a payment of about $99. (average market price) The user will then need to wait for a replacement phone to be shipped to the customers address within 1-2 business days. Most of the time the phone sent to the user will not be new, but instead be a refurbished device, typically having fake or used parts, often times a phone in lesser condition then the phone submitting a claim for. We've already gone into detail about the devices we see as insurance phones in a separate post:

Secrets Your Mobile Phone Insurance Company Doesn't Want You To Know

If you owned an iPhone 6 for 1 year and then dropped the phone and developed a cracked screen then submitted a claim to an insurance provider such as Asurion or Squaretrade you would typically pay $220 to replace the device. This would be broken down into 12 monthly payments of $10 ($120) + $100 deductable and then wait 1-2 days for a replacement device to be sent. Once the replacement device is received a 72hr window is allowed for the original device to be sent back to the insurance provider. But what if you have sensitive data on the device you wish to obtain before sending away the device? This then causes more expense to the end user to get data extracted from the device from a local repair shop, often times averaging to $65. This claim that was submitted for only a broken screen on a device can quickly rise to be almost $300 when most repair shops offering cracked screen repairs only cost $99 and take less than 20mins, all while retaining the original data.

The insurance providers often only allow 2 claims per year.

 

Insurance providers are so keen on keeping their cash cow flowing that even in the case of claim that was submitted for a lost device they will often block the IMEI or ESN even if the original phone is found. This can prevent some cases of fraudulent claims, but it can also present problems for users who wanted to keep an older device as a backup or transfer files over a cellular network. 

In conclusion, we can see that unless you have suffered loss or theft on a device then it is not finacially sound to use mobile phone insurance as a form of "repair" for you device. 99% of the time most insurance providers will only replace the device, only then to send you a device of lesser quality and force you to pay high fees and wait times for something that could have been repaired same day often within 1hr of the damage at a repair shop.

   

Saturday
Dec172016

What is a Sim Card?

A Sim card or also known as a Subscriber Identity Module is found in almost all mobile devices which have the capability of mobile wireless service for data and/or calls via a wireless company carrier such as AT&T, T-Mobile, H2O, Net10

 

 Contrary to popular belief, sim cards contain very little [if any] user saved data. The main purpose of a sim card to to authenticate your device onto the network of choice and facilitate wireless transfers to and from your device to the wireless towers in the form of data and/or voice calls.

 

A SIM card contains its unique serial number (ICCID), international mobile subscriber identity (IMSI) number, security authentication and ciphering information, temporary information related to the local network (MCC-MNC), a list of the services the user has access to, and two passwords: a personal identification number (PIN) for ordinary use, and a personal unblocking code (PUK) for PIN unlocking.

 

  • The use of SIM cards is required in GSM Devices

 

 

Sim Card Cross Section

 

SIM cards store network-specific information used to authenticate and identify subscribers on the network. The most important of these are the ICCID, IMSI, Authentication Key (Ki), Local Area Identity (LAI) and Operator-Specific Emergency Number. The SIM also stores other carrier-specific data such as the SMSC (Short Message Service Center) number, Service Provider Name (SPN), Service Dialing Numbers (SDN), Advice-Of-Charge parameters and Value Added Service (VAS) applications.


SIM cards can come in various data capacities, from 8 KB to at least 256 KB. All allow a maximum of 250 contacts to be stored on the SIM, but while the 32 KB has room for 33 Mobile Network Codes (MNCs) or "network identifiers", the 64 KB version has room for 80 MNCs. This is used by network operators to store information on preferred networks, mostly used when the SIM is not in its home network but is roaming. The network operator that issued the SIM card can use this to have a phone connect to a preferred network, in order to make use of the best commercial agreement for the original network company instead of having to pay the network operator that the phone 'saw' first. This does not mean that a phone containing this SIM card can connect to a maximum of only 33 or 80 networks, but it means that the SIM card issuer can specify only up to that number of preferred networks; if a SIM is outside these preferred networks it will use the first or best available network.

 

 

Sim Card Sizes

 

An integrated circuit that is intended to securely store the international mobile subscriber identity (IMSI) number and its related key, which are used to identify and authenticate subscribers on mobile telephony devices (such as mobile phones and computers). It is also possible to store contact information on many SIM cards. SIM cards are always used on GSM phones; for CDMA phones, they are only needed for newer LTE-capable handsets. SIM cards can also be used in satellite phones.

 

The SIM card introduced a new and significant business opportunity for MVNOs — mobile virtual network operators — who lease capacity from one of the network operators rather than owning or operating a cellular telecoms network, and only provide a SIM card to their customers. MVNOs first appeared in Denmark, Hong Kong, Finland and the UK. Today they exist in over 50 countries, including most of Europe, United States, Canada, Mexico, Australia and parts of Asia, and account for approximately 10% of all mobile phone subscribers around the world.

On some networks, the mobile phone is locked to its carrier SIM card, meaning that the phone only works with SIM cards from the specific carrier. This is more common in markets where mobile phones are heavily subsidised by the carriers, and the business model depends on the customer staying with the service provider for a minimum term (typically 12, 18 or 24 months). SIM cards that are issued by providers with an associated contract are called SIM only deals. Common examples are the GSM networks in the United States, Canada, Australia, the UK and Poland. Many businesses offer the ability to remove the SIM lock from a phone, effectively making it possible to then use the phone on any network by inserting a different SIM card. Mostly, GSM and 3G mobile handsets can easily be unlocked and used on any suitable network with any SIM card.

In countries where the phones are not subsidised, e.g., India, Israel and Belgium, all phones are unlocked. Where the phone is not locked to its SIM card, the users can easily switch networks by simply replacing the SIM card of one network with that of another while using only one phone. This is typical, for example, among users who may want to optimise their carrier's traffic by different tariffs to different friends on different networks, or when traveling internationally.

In 2016, carriers started using the concept of automatic SIM reactivation whereby they let users reuse expired SIM cards instead of purchasing new ones when they wish to re-subscribe to that operator. This is particularly useful in countries where prepaid calls dominate and where competition drives high churn rates, as users had to return to a carrier shop to purchase a new SIM each time they wanted to churn back to an operator.