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From: filbo@gorn.santa-cruz.ca.us (Bela Lubkin)
Newsgroups: comp.sys.amiga
Subject: Re: Amigas -- why the 90 day warranty?
Message-ID: <76.filbo@gorn.santa-cruz.ca.us>
Date: 4 Nov 89 00:01:55 GMT
References: <23416@cup.portal.com> <61.filbo@gorn.santa-cruz.ca.us> <1989Oct31.180829.8054@ddsw1.MCS.COM>
Organization: R Pentomino
Lines: 58
X-Claimer: I >am< R Pentomino!

In article <61.filbo@gorn.santa-cruz.ca.us> I (Bela) write:
>I would GUESS that the cost for a 1-year extended
>warranty for an A500 or A2000 would be about $80; about $20 for an
>external drive, also about $20 for a CBM-supplied hard disk; near zero for
>memory expansions.  2-year versions would go for about 40% more than 1-year.

In article <1989Oct31.180829.8054@ddsw1.MCS.COM> Karl Denninger writes:
>Let's look at this:
>				Cost		Warranty	Fail %
>	External drive:		$150		$20		13% (!)
>	A500 System unit	$700		$80		11% (!)
>
>Is this realistic?  If it's 1 in 10 to break in the first 12 months, I'm 
>not buying it.  Those are TERRIBLE odds, far worse than any of the PC lines
>we handle, and far worse than any consumer product I have ever owned.

I thought I already posted about this.  If you think a $20 warranty on a
$150 item suggests a 13% failure rate, you're crazy.

I'm assuming a parts-and-labor warranty.  If it takes the technician half an
hour to reseat the Denise chip, Commodore pays for it.  If a switch goes bad
on the keyboard and needs to be replaced, Commodore pays for labor as well
as the part.  In the rare case of a total failure, Commodore pays for
several hours worth of investigation, then for an entire replacement machine.
Or they can choose to replace the machine automatically in certain failures,
and save the cost of labor.  In any case, the warranty also pays for the
dealer's red tape costs, and must pay some profit to the dealer to provide an
incentive to honor the warranty correctly.

Let's look at $20 on a $150 external drive.  Let's say we start with 100
drives, or $2000 to pay for warranty stuff.  $20 is probably a pretty typical
charge for having the technician look at something.  So if that's all that
was being done, we could assume a 100% "look-at" rate.  Now, some of those
drives are going to need more than just a cleaning, like perhaps an
alignment.  If 10% need a $50 alignment, that eats $500 of the warranty
money.  If 3% need replacement, that's another $450.  If Commodore pays the
dealer 25% of the warranty price to cover paperwork and provide some profit,
that's another $500.  The remaining $550 will cover having 28% of the drives
in for a cleaning.  Realize that if a consumer product has a comprehensive
warranty, some owners are going to bring their product in even if it doesn't
have a specific product, just to get it "tuned up".

Yes, all the numbers are bogus.  I don't know actual figures, I just know
that the warranty money gets split up a LOT more ways than just straight
replacement cost.

>Hell, my $1200 laser disk player has an extended warranty -- it was $80.
>But that warranty covers EVERYTHING, including routine cleanings, for FIVE
>YEARS.  What you're proposing isn't a warranty, it's another profit center,
>and a darn good one at that (or the product's failure rate is unacceptable).

This says to me that the cost of such a warranty is already figured into
your *$1000* laser disk player and that you'd be a fool not to pay the small
incremental amount to actually qualify for what you've already payed for.

Bela Lubkin    * *    //  filbo@gorn.santa-cruz.ca.us  CompuServe: 73047,1112
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R Pentomino    *   \X/    Filbo @ Pyrzqxgl +408-476-4633 & XBBS +408-476-4945