Best Buy to offer Apple's iPhone 3G S with insurance
Best Buy stores nationwide next friday will begin selling the next-generation Apple handset on launch day, albeit at the big-box retailer's usual 10 a.m. opening time instead of the early hours both Apple and AT&T promise.
In contrast to these more direct channels, however, Best Buy plans to continue offering Geek Squad's Black Tie Protection service with the new iPhone, people familiar with the plans say.
While Apple has never offered more than a standard two-year extended AppleCare warranty and AT&T has specifically exempted the iPhone from its insurance offerings, Black Tie covers regular technical problems as well as drops, spills and other failures that would normally require a costly repair service or the purchase of an entirely new device.
Under Best Buy's offering, any instance in which the phone can't be fixed or replaced on the spot will see those customers offered a temporary phone until the repair or replacement is ready within three days or less. Battery replacements aren't as likely due to Apple's sealed-up design, but the company vows anti-lemon protection for devices that have to be brought in four times due defects.
Opting for Black Tie will reportedly still be expensive. For other cellphones, the program costs between $7 and $10 per month depending on the model, but the iPhone's rate rises to $15 per month. That leaves iPhone owners paying about $180 per year — almost as much as the 16GB iPhone 3G S — even though those with other expensive phones can pay $120 per year for the same coverage.
Well informed people say the added cost of iPhone protection comes from the heavy subsidies attached to Apple's products. Since the actual, retail price of a phone without a contract is between $599 and $699, it becomes prohibitively expensive to offer Black Tie when customers may use it more than once.
Still, for the accident-prone, Best Buy's Black Tie is currently poised to be the only option for protection of the Apple handset outside of credit card insurance or individually obtained policies. The Black Tie Protection even covers broken screens.