I've said that Apple's Quality Control performance has been
declining rapidly the last few years, but never had anything concrete to
prove that. It used to be the case that we could order a dozen Macs,
pull them out of the box, and have them all work flawless for 5-10
years. The last time I placed an order for new Macs (four high-end
Dual-processor G5s, no less), 3 of the 4 didn't work out of the box.
Of those, one had a manufacturing defect so bad that it couldn't
even be powered on. If you can ship a box that can't be powered up,
how good can your QA be? But this is all anecdotal and only says that
I've had bad luck with Apple products lately, right? It doesn't
show the picture of many thousands of happy Macintosh customers getting
machines that work perfectly out of the box, right? OK, let's see
what Apple has to tell us…
In its own 10-Q statements
filed with the Securities and Exchange Commission (SEC), Apple discloses
its hardware warranty performance to its investors. What do those
statements tell us about the number of warranty returns they're
seeing now versus the recent past?
Here's an excerpt:
----------Nine months ended:---------- 6/25/05 6/26/04 6/28/03 6/29/02 Beginning accrued warranty and related costs $ 105 $ 67 $ 69 $ 87 (in millions)Cost of warranty claims (127) (76) (53) (61)Accruals for product warranties 196 100 51 43
------------------------------------------- ------ ------ ------ ------Ending accrued warranty and related costs $ 174 $ 91 $ 67 $ 69
What does this tell us? For one thing,
we can see that Apple's been unable to correctly estimate its cost
of warranty claims for the last couple of years. They've been higher
than Apple expected, by quite a bit. It also tells us that they perceive
a definite quality problem there, because they estimate that with a
sales increase of 73% that their cost of accruals for product warranties
is up 96%. In other words, the cost of warranty repairs is increasing
faster than their sales (which implies, dollar for dollar, an increased
rate of failures).