iPhone gets special treatment on handset warranties

A court undertaking between Australia's competition watchdog and VHA, which formed the basis of new rules for mobile carriers around the length of phone warranties, featured one glaring exemption: Apple's iPhone.

The ACCC announced late last month that carriers offering handsets bundled with 24-month service plans would have to provide a warranty for the handset for the full 24-months.

It was a significant decision for the industry - most handset manufacturers only offer the carriers12-month warranties.

The announcement was based on an enforceable undertaking between the ACCC and mobile network operator VHA (Vodafone Hutchison Australia) and some formal discussions between the watchdog and VHA's two larger competitors, Telstra and Optus.

But what was not revealed at the announcement late last month was that VHA had specifically requested Apple's iPhone be made exempt from its enforceable undertaking.

"All Apple iPhone handsets are exempt from VHA's express 24-month repair warranty," VHA has since confirmed in a statement.

"The Australian Competition and Consumer Commission (ACCC) agreed to this exemption when it accepted VHA's undertaking on this issue."

VHA requested the exemption, arguing that that Apple prohibits the carrier from servicing iPhones at its service centres.

"VHA is unable to offer an express repair warranty for Apple products which extends beyond 12 months," a spokesman for the carrier told iTnews. 

All other handset manufacturers allow VHA to repair faulty devices at the carrier's own service centres or via other authorised repairers. But not Apple.

VHA has instead had to come to an agreement with Apple whereby those customers with faulty iPhones outside of Apple's 12-month warranty can BUY a refurbished (ie repaired) iPhone for $288.

Never again

ACCC chairman Graeme Samuel told iTnews that the exemption of the iPhone was limited to the VHA undertaking but warned that it was not something the regulator would agree to "in practice."

There would still be good cause for consumers to take VHA to court if the carrier attempted to charge them for a refurbished iPhone within their 24-month contract.

"The proposition was put to us that Apple charge a significant premium for service," Samuel said. "[The carrier] put to us that Apple iPhones are more difficult to repair and can therefore only be repaired by Apple.

"But frankly, I don't think that matters. Most manufacturers - be it Nokia, HTC, Motorola - they will all tell you they only have warranties for 12 months. It doesn't matter who the manufacturer is. What I'm saying to retailers is, your relationship with your manufacturer is your problem," he said.

"An exception was made in this undertaking, but I am not sure it is tenable in practice and not something I would condone in the future."

A tough business partner

The Apple iPhone has been a game changer for the mobile industry.

In its wake, carriers like Telstra have been forced to hand over control of the application environment on its handsets, whilst competitors such as Optus have had to accept financial losses due to the incredible strain the data-hungry device places on their network. And all carriers have also suffered device shortages at the expense of Apple's own retail stores.

It now appears VHA is making yet another concession to the manufacturer.

"While Apple products are exempt from VHA's express 24-month repair warranty, they are not exempt from the warranties implied by the Trade Practices Act which may extend beyond 12 months," the carrier told iTnews. 

"Of course, VHA will honour its obligations under the Trade Practices Act as well."

Apple's smartphone competitors were given the opportunity to comment on the apparent double-standard, but most took the opportunity to highlight their willingness to be a better business partner to carriers and more responsible supplier to consumers.

A spokesman for HTC said the ACCC's new rules represent "a great policy, which HTC wholeheartedly support.

"We have a 24-month warranty on our devices already in place with Vodafone for Australian customers," the spokesman said.

Apple's corporate affairs spokesman was asked for comment but supplied the company's stock-standard response.

"Apple does not comment on its business practices."

What do you think? Should Apple be treated any differently to any other device manufacturer?