Understanding Your Apple ID

If you want the short version of this post, here it is: Any time Apple asks you to log in, just enter your Apple ID and password. Buying a song from iTunes? Enter your Apple ID and password. Visiting the Apple Online Store to buy a new Mac? Enter your Apple ID and password. Making a Genius Bar reservation? Enter your Apple ID and password.

There are not separate accounts for iTunes, iCloud, etc. They all share a single account, and that account is known as your Apple ID.

If it’s so easy, then why do some folks find it so confusing? Mostly because Apple hasn’t done a good job of explaining it. Many users don’t realize that every Apple service and online store share a single sign-on.

Any newly created Apple ID must be an email address that does not use an Apple-owned domain. So john.doe@example.com is a valid Apple ID, but john.doe@icloud.com is not. ((Under the old rules, Apple IDs could end in mac.com or me.com, and those users have been grandfathered-in. For technical reasons unknown to me, those are also the only users who may not change their Apple ID.))

When you sign up for an Apple ID, your email address becomes your Apple ID. If you ever change your email address, you will need to change your Apple ID to match the new address.

You can sign up for an Apple ID using any web browser, even on Windows and Linux. But the Mail feature of iCloud can only be set up on a Mac or iOS device. To create an iCloud email address, go to System Preferences and clicks on iCloud:

Choose an iCloud email address

If you set up an iCloud email account (i.e. john.doe@icloud.com), you will now have two email addresses associated with your Apple ID. Apple conveniently accepts either address at any login prompt, but don’t let that confuse you. Even though your Apple ID is now linked to an iCloud address, your Apple ID is still your primary email address.

Making things even more confusing, the iCloud account panel incorrectly labels the email address as an Apple ID. This is just plain wrong.

iCloud account-annotated

Just remember this: your Apple ID is your primary email address. If you enter a new primary email address, you will change your Apple ID, but not your iCloud email address (which cannot be changed).

If you visit the My Apple ID page and click “Manage your Apple ID,” you’ll see something that looks this:

Apple ID manage

As a practical matter, any time you’re prompted for your Apple ID, you can enter either your primary email address or your iCloud.com address. ((If you’ve been around long enough to also have a mac.com or me.com address, those may work too; see this article for details.))

Any questions?

Unforeseen consequences: The End of Smartphone Subsidies

Cellular carrier T-Mobile announced (and Apple confirmed) that they’ll be getting the iPhone in 2013. And they also announced that they’re ending smartphone subsidies.

For those unfamiliar with how the subsidy model works, a brief explanation: All the big cellular carriers make their money selling 3 types of services: voice minutes, text messaging, and internet connectivity, commonly referred to as talk, text, and data. Data is especially profitable—AT&T charges an extra $50/month for a 5GB data plan. Add in the talk & text charges, and the total monthly bill is $110 to $140. ((Pricing clarified at the suggestion of Motley Fool user NailThatJello. Detailed rate plans from the big 3 US iPhone carriers can be found here.)) Of course, only smartphone users need data plans, and so carriers want to encourage as many customers as possible to use smartphones. And one of the tricks they use to encourage smartphone ownership is subsidizing the purchase price of the phone itself.

So AT&T pays Apple $650 for an iPhone, then they resell it for just $200, meaning they actually subsidize $450 of the cost. They’re happy to do this knowing they’ll more than make up the difference in the monthly service charges they collect from users. The subsidy costs them about $19/month, but they charge more than that just for the data portion of the bill. (I use AT&T as an example here, but the same logic applies to Verizon and Sprint as well.)

At the end of 2 years, if the customer keeps their existing phone, their profit magically goes up by $19/month, since they no longer have to pay off that subsidized phone. AT&T does not lower the service price after the subsidy is paid off.

But T-Mobile is going to change things. Right now they offer a plan for unlimited talk, text, and data for $50. Two years of that service is $1200. Add in the $650 cost of the iPhone, and your out-of-pocket expense is $1850. You’d pay almost twice as much — $3,560 — with AT&T for the same phone and similar service. Furthermore, T-Mobile will let spread the payments out over 24 months, meaning that you don’t have to pay for that $650 iPhone in advance.

So what will happen when T-Mobile gets the iPhone? My guess is that lots of users will switch. (For technical reasons most current iPhones can’t easily be switched to T-Mobile’s network, but that will likely change with the next iPhone model.) Eventually AT&T, Verizon & Sprint will be forced to compete, offering discounted rates for customers who buy their own phone.

Everything I’ve written above is reasonably obvious, so now let me get to the unforeseen consequences mentioned in the title to this blog entry.

It’s well known among industry analysts that US carriers strongly favor Android phones over iPhones. The web is full of stories about people asking for iPhones at Verizon and AT&T stores, and being rather forcefully steered toward competing Android models. Carriers prefer Android phones for two reasons. The obvious reason is that Android phones are cheaper, requiring smaller subsidies. The less obvious reason is that the average Android user doesn’t use much data. The average iPhone users uses 10 times as much data as the average Android user.  ((Do the math: Worldwide, Android phones account for about 75% of all in-use smartphones, but only about 30% of all mobile web traffic. iPhones are about 15% of all smartphones, and account for about 60% of all mobile web traffic. Thus on a per-phone basis, iPhone web usage outpaces Android by about 10-to-1.))

So Verizon et. all. like Android phones because they are cheaper to subsidize and don’t place a heavy burden on their data network.

Now, what happens when the subsidies disappear? Android users may figure out that they’re paying for data they aren’t using. They’ll switch to cheaper data plans, or maybe even turn off data completely (if their carrier lets them). And carriers suddenly have no one who wants to buy data — except iPhone users!

The unforeseen circumstance which I’m predicting here is that the end of the subsidy model will lead to carriers favoring iPhones because iPhone users will buy lots of data.

Time will tell if I’m right.

If anyone spots any errors in spelling, grammar, or logic, please let me know. If I agree, I’ll acknowledge & correct the error, and give credit to whomever first brought it to my attention.

For those of you who want specifics, I got the following rate quotes from the big three carriers. I tried to make them as similar as possible. (Rates vary by location, phone selected, and, for all I know, the day of the week.)Smartphone plans

Myths About Voiding Your Warranty

There is a widespread perception that installing third-party upgrades can void your warranty. My consulting clients are sometimes hesitant to use non-Apple memory, or 3rd-party hard drives to upgrade their Macs.

In the United States, federal law protects consumers who want to use 3rd-party parts. Upgrading your computer does not void your warranty. You can buy your RAM, hard drive, or other parts from any third party. Likewise, you are not required to use an authorized service provider to install those upgrades.

The law in question is known as the Magnuson-Moss Warranty Act. Passed in 1975, this federal law prohibits requiring that only branded parts be used. The Federal Trade Commission’s website explains the so-called “tie-in” provision thusly:

Generally, tie-in sales provisions are not allowed. Such a provision would require a purchaser of the warranted product to buy an item or service from a particular company to use with the warranted product in order to be eligible to receive a remedy under the warranty. The following are examples of prohibited tie-in sales provisions.

In order to keep your new Plenum Brand Vacuum Cleaner warranty in effect, you must use genuine Plenum Brand Filter Bags. Failure to have scheduled maintenance performed, at your expense, by the Great American Maintenance Company, Inc., voids this warranty.

So if your Mac or PC  is still covered by the original warranty (or an extended warranty like AppleCare), and you want to upgrade your RAM or hard drive, go ahead. Better yet, pay me to do it for you!

Note: If you accidentally damage your logic board when you’re installing an upgrade, that probably will void your warranty. Accidental damage is usually not covered, and it doesn’t matter if the accident was spilling water in your keyboard or breaking a connector while installing a new hard drive. So if you’re not confident about your skills, you’re probably better off paying someone else to handle it for you.

Disclaimer: Magnuson-Moss is a US law, so of course it doesn’t apply outside of the United States. I’m not familiar with warranty laws in other countries.

If you have an iMac, read this!

Certain iMacs sold between October 2009 and July 2011 may have defective hard drives.

All the affected drives are 1 TB models. Apple is replacing them for free. You need not be experiencing any problems to qualify.

Don’t take chances with your data. If yours is one of the affected models, back up your drive right away, and have it replaced.

For more details, and to see if your iMac is one of the affected models, click here.

Does Apple compete via innovation or litigation?

In the weeks following the Apple v. Samsung verdict, I’ve seen many blog posts and comments claiming that Apple is fighting their competitors in the courts instead of competing through innovation.

A moments thought demonstrates the silliness of that argument.

Apple earned their arsenal of patents through innovation. Without innovative inventions, they wouldn’t have earned the patents. But innovations only provide a competitive edge if your competitors don’t have access to them.

So competing through innovation requires both patenting inventions and preventing competitors from infringing those patents.

If Apple didn’t innovate, they wouldn’t have the patents, and there wouldn’t be any lawsuits. Likewise, if Apple competitors like Samsung relied on innovation instead of copying, there also wouldn’t be any lawsuits.