Apple escapes Australian two-year warranty commitment

Australian carrier Telstra has agreed to offer warranties on all handsets that match the length of the contract to which the handset is attached. But the Apple iPhone is not covered by the agreement, raising concern at the Australian competition authorities.

In response to pressure from the Australian Competition and Consumer Commission (ACCC), Telstra now offers 24-month warranties on all handsets sold with a two-year contract, other than the iPhone. The carrier already had the deal in place for RIM, HTC and ZTE handsets. The ACCC secured a similar commitment from Vodafone Hutchison Australia last year and said Monday that it was in discussions with third carrier Optus towards the same end.

“Telstra has decided to do what’s right and fair for consumers, and has been negotiating with manufacturers to bring in warranty periods that last for the length of a consumer’s contract,” ACCC chairman Graeme Samuel said in a statement. “Just because the manufacturer’s warranty period is up, it does not mean that consumers can be hung out to dry if they are left with a faulty product and ongoing service contract.”

But Apple iPhones are excluded from the agreement, which the ACCC said was a cause for concern. “Although nearly all major handset manufacturers have agreed to honour full warranties, the ACCC continues to have concerns in relation to warranty issues with the Apple iPhone,” the organisation said.

In an interview with the Sydney Morning Herald, Samuel suggested that Apple’s immovability on the issue of warranties — the firm insists on charging for cover beyond its standard one-year warranty — might impact on the popularity of the handset in the Australian market. “The retailers are saying well we can’t negotiate a 24-month warranty with Apple because it’s too expensive,” the newspaper quotes him as saying.

“The truth of it is they can but it’s going to cost them, and of course that cost would then be passed on to the consumer in the purchase price of the phone. Consumers will then make up their mind whether it’s a better deal to buy an Apple iPhone or a Samsung or HTC.”

In the 12 weeks to June 13 2010, smartphones accounted for 45 per cent of the 1.8 million handsets sold in the Australian market, according to Figures from Kantar Worldpanel ComTech. More than 30 per cent of Australian subscribers over the age of 16 are smartphone owners, the company said. The iPhone accounted for 18.5 per cent of handset sales in the 12-week period, and 37 per cent of all smartphones sold. Nokia’s share of the high end in Australia was 39.6 per cent in the period, while Android handsets accounted for 4.2 per cent of all smartphone sales.