One way of determining reliability.

How many times have you read words like this?

“Oh! gee, they just replaced everything, no questions asked, in my dead Mac. AppleCare rocks – everyone should have it”.

How about “Why the hell did it blow after 15 months and why should I have to pay another 20-30% on top of the price of an already premium priced product? And what about my time and data and productivity lost during the repair period? Shouldn’t Apple be paying me?”

Welcome to AppleCare.

I addressed the extended warranty business back in 2008 explaining why, for most reliable devices like cameras and TVs, the cost of an extended warranty would accomplish but two things. Rob the buyer and enrich the seller.

A warranty is nothing other than an insurance contract, so its pricing reflects three things:

• The likelihood of failure of the warranted item
• The cost of parts, labor and shipping to repair
• The required profit margin

Now it’s hard to put a price on the parts and labor component but if, as a first approximation, we assume that the ratio of that cost to the selling price of the item is constant over a large population (some Macs need a costly new screen, some a screw or two – it averages out) then what is left is the profit margin – assumed constant – and the likelihood of failure, which is an unknown variable.

So if you buy those assumptions, simply looking at the ratio of warranty cost to selling price gives you a metric which indicates the likelihood of failure – the unknown variable.

How do these data stack up for AppleCare which extends the new item’s 12 month warranty by an additional 24 months?

Using the lowest selling price of each item (except for the iPhone where the much more popular 3GS model has been used), the ratio of AppleCare cost:selling price is as follows in rising order:

• Mac Pro – 10%
• iMac – 14%
• Apple TV – 21%
• MacMini – 25%
• MacBook – 25%
• MacBookPro – 29%
• iPhone 3GS – a whopping 35%

These are troubling statistics from which I glean the following:

• The Mac Pro is dead reliable (can you say ‘proper cooling’?)
• Only a fool buys an iPhone with or without warranty
• Now I’m really worried about having bought that MacMini to replace the FriedMac
• The MacBookPro is a real dog
• By Apple’s reliability standards, the iMac is one of the most reliable products they make. This is no consolation.

Another great reason for building your own Hackintosh – check the build list. No single part costs more than $100 with the exception of the exotic $250 Core 2 Quad CPU – how many properly cooled CPUs have you known to fail? All the parts come with a one year warranty and all cost less than one AppleCare insurance policy …. so when they fail in month 13, you throw them out and buy a newer, better replacement. For $100. And you don’t have to ship the whole 50lb megillah back to Mr. Jobs for repair. What’s not to like?

But you have to give it to the merchant huckster in charge. He gets to look the good guy (“AppleCare looks after you, no questions asked” – no need to ask at those margins), charges you up the kazoo and makes huge profits on the insurance business in the process.

The 20″ iMac is no more.

I have long known that one of the key dictates of being a smart investor is knowing when to cut your losses. I now know that the same applies to iMacs. It also makes sense, like with investing, to have alternatives. Read on.

The garbage awaiting collection

The repair place said they couldn’t fix the logic board from the 20″ iMac so I removed the remaining components and trashed the case, beautifully drilled as it was. A $2,000 machine dead after 30 months. Please, no cracks about buying AppleCare. When you pay a 100% premium for a machine, you should not be required to pay another 10% for insurance.

The 24″ iMac with its new graphics card is up and running so stay tuned for developments and some measurements of temperatures.

Meanwhile, I have bought a Mac Mini and an HP display. We will reuse the Apple keyboard and mouse. The display at least comes with a 3 year warranty and at $580 the Mini with a 12 month warranty is a whole lot less than a new motherboard for the dead iMac with a 3 month warranty. After selling off the bits my Mac ‘investment’ will come down maybe $200.

As we all know, the white iMacs were replaced by the aluminum-bodied ones with the ghastly glossy screens and purportedly improved graphics. So you thought the cooling problems would have been fixed by now, huh? Oh! I forget – what problems? At least, that’s Apple’s line.

Well, here’s an ad from yesterday’s Craigslist which I chanced upon when listing the components removed from the dead iMac:

It just works fries.

Not all is bad, however. One day my 24″ iMac will die and be uneconomical to repair. In my techie phase I learned some interesting things. Macs use industry standard components. They come in lovely cases. They are poorly heat engineered. They are overpriced. They are cheaper to build yourself.

Clearly, buying another iMac is out of the question. With its core audience of photographers and movie makers abandoned, and with quality control having fallen off a cliff, all that remains is the pretty looks and the high price tag. My primary reason for switching to Macs a decade ago was the software. Constantly rebooting the fraud that is Windows was getting old and OS X delivered – and continues to deliver – in spades. Rare reboots, no spam, maybe three kernel panics in ten years. That’s why I use Macs.

And, by the way, our first iMac, the lovely ‘screen on a stick’ design, remains perfectly operational to this day. Not a statistically meaningful sample, but, for this user, a meaningful fact. Too slow for heavy Lightroom work, but great for surfing and email use.

So my next desktop Mac will have the following specifications:

• 3.8 gHz Intel Quad Core CPU (Yes, 3.8)
• nVidia 9800 GT GPU with on board cooling fan and 512mB of video memory ($100 compared to $260 to replace the nVidia 7600 in my 24″ iMac)
• 700 watt power supply with dedicated fan
• ‘Superdrive’ DVD burner/reader
• 8gB of DDR3 system RAM
• Sound insulated heavy steel case with three 120mm fans
• 8 USB, 3 FW400, 2 FW800 and Dual DVI connections
• 1 terabyte HDD

Cost? $1,012 including $62 for delivery. Assembly time – 2 to 3 hours.

Number of cooling fans? 5.

Maximum temperature of any key component? 90F.

All parts easily user upgradeable at low cost as technologies improve.

And no, you cannot get it from Apple whose MacPro starts at $2,500 and which will be left in the dust by this machine. The nearest comparable Mac Pro configuration would run you $3,350, or more than three times as much. So much for all that nonsense about ‘you pay more but you get more’. And as for the ‘server quality hard disk’ in the machine (Jobs’s words, not mine) it’s nothing more than a bottom-of-the-line POS Western Digital, unlike the better quality one shown here.

Can you spell ‘Hackintosh‘?

Don’t get mad. Get even.

Here’s the build list, in case you are skeptical:

Hackintosh build list

The Intel CPU is easily and safely overclocked to run at 3.8gHz if that is your thing. Trivial to do. Every component is as good or better than its counterpart in the MacPro at a fraction of the cost. And you don’t get the single electronic part that Apple actually designed in its computers – the mother board. The one that fries. My seven year old, now a recognized Lego expert, could probably assemble the bits in an hour …. and at $5/hr, half the payroll rate of the alleged Apple ‘Genius’.

You can add a screen of your choice, but don’t waste money on the dated Apple 30″ Cinema Display (made by LG, by the way). Get the newer technology from HP, model LP3065 at $1,180 with HDCP support, and save another $720 while you are at it – why, that almost pays for the other hardware. (The Mac Display is $1,800 but you are hosed down an additional $100 for Apple Care to equal the HP’s 3 year warranty). The HP includes on site service. Nice, as you can be sure Steve Jobs ain’t coming by to fix your Apple Display when it blows. And as for the OS, use the goddamned disks that came with that iMac in the garbage. You paid for them.