Is the $99 Apple Extended Warranty Necessary?

I normally do not buy the extended warranty on electronics but I did buy the AppleCare for my iPad for one reason -- my iPad was locking up playing video and we determined that it needed replacement. The nearest Apple store is 2+ hours away and I did not want to send mine back (on my dime), wait, and get another one shipped to me once they received / processed my return.

With AppleCare they shipped me out a new iPad and got it to my home the next day. They also paid for the return shipping of my defective iPad. No additional cost to me. Plus, of course, now I have 2 years of phone support and product replacement coverage.

So, I paid $99 for convenience + some extra coverage, it was worth it to me.

This extended warranty, Apple Care biz has always intrigued me.

In my experience, the AC has cost far less than the repairs that have been made. I've had good success with it. Big companies profit from it, not because of price gauging per se, but because they can amortize the cost of repair across thousands of cases.

Here's a hypothetical. If AC costs $100, and a thousand people buy it, Apple has $100,000. If 10 out of 1,000 (1 out of 100) need repair, and the repair costs $200, Apple is out only $2,000. A sweet $98,000 for them, but also a half priced repair for those who need it! (Even if 1 out of 10 had problems, an astronomical 10% problem rate, then Apple still profits $80,000! Customer still has half-priced fix.)

Given how responsive Apple often (typically?) is; it's quite a deal. Three things are tipping me towards getting it (rather than Square Trade, which I know covers accident damage, which would be good). One is the commentary about Apple sending out a prepaid mailer on repairs (for those of us not lucky to live within a short car ride of an Apple Store). That's been my experience in the past and I'll need to get confirmation on it now. The second is reading through some of the critiques and hassles of ST listed on nexttag.com (an impossibly difficult site to read with its microscopic font size). Fortunately, they are a small percentage... If we drop it, it may not break, we'd have a case on it, and we'd buy the next gen anyway!

Some time ago I read in Consumer Reports; do not buy extended warranties. The exception being products made by Apple. Not because Apple product are not good, but that their warranties are too short. Consumer Reports advocates buying Applecare. So...I always buy Applecare but not extended warranties or insurance offered by retail stores.

"Am i correct in saying that i can get the warranty within the first 90 days."
Yes.

I strongly recommend AppleCare to people who are new to the Mac regardless of what computer they have bought. The 3 years of technical support hand holding can be invaluable as people adjust to the Mac way of doing things. I also strongly recommend it for notebook computers because due to their size and the way they are used notebooks are stressed in ways that desktops aren't. Inherent weaknesses of computer design come to light more quickly (but often after the 12 month warranty). And finally, for those people who tend to replace a computer every 2 years or so, selling a used computer with a warranty tends to make the sale easier, faster, and bring in a bit more cash.

However, I've never considered buying the extended warranty for my iPods, iPhone, and I'm taking a wait and see on the iPad. We have 12 months from purchase so I'll see how things go and make my decision in February or March.