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Apple Inc. (AAPL) Has an Apple Watch Problem

Apple extends Apple Watch warranties due to faulty batteries

Lithium-ion batteries and the problems they cause has become the tech industry headache that simply will not go away. Samsung Electronics (OTCMKTS:SSNLF) may be the poster child for the battery technology’s downside, but Apple Inc. (NASDAQ:AAPL) has had it’s share of issues — particularly with the iPhone 6 series.

Apple Inc. (AAPL) Has an Apple Watch Problem
Source: Apple

Now it looks as though the Apple Watch battery may also be vulnerable. Apple is extending the standard one-year Apple Watch repair coverage to three years for cases of swollen batteries.

 

Apple Watch Battery Has a New Problem

When Apple first released the Apple Watch, the battery was a problem. The (now defunct) smartwatch leader at the time was Pebble and its watches would easily get a week or more on a battery charge. Fitness trackers from wearables leader Fitbit Inc (NYSE:FIT) would also go for multiple days on a charge.

The Apple Watch battery lasted about a day — sometimes less if it was used for actively tracking a fitness session. Battery life became an issue that Apple had to convince consumers to overlook, and the same shortcoming has extended to the Apple Watch Series 2.

But now it looks as though Apple has another Apple Watch battery problem. There have been stories of Apple’s smartwatch battery swelling to the point that it physically pops the display out, rendering the device unusable. Checking the company’s online support forum, there are threads discussing the issue. It appears the problem may be more common than AAPL is letting on.

9to5 Mac published a notification from Apple stating that it is extending Apple Watch repair coverage for three years from date of purchase (from one year) for the first generation device if it suffers an expanded or swollen battery.

A service advisory like this is an official — although not public — acknowledgement by AAPL that the battery problems have happened frequently enough that they need to be addressed.

The company currently charges $79 for an Apple Watch battery replacement, but if there is damage to the device, out-of-warranty Apple Watch repair service starts at $199.

At this point, it seems unlikely that the second generation Apple Watch battery is affected. But with the original coming up on two years since its introduction, the number of Watch repair orders related to the lithium-ion battery seems likely to increase. So AAPL is quietly getting ahead of the problem.

Potential Impact on Apple Watch Sales?

When lithium-ion batteries explode, they can decimate the sales of an affected device.

Case in point, Samsung’s Galaxy Note 7 — which turned into a $10 billion disaster. Fitbit is likely walking on eggshells at the moment after reports a Flex 2 fitness tracker exploded while strapped to a woman’s wrist.

So far, AAPL hasn’t had any Watch battery horror stories. The swollen batteries all seem to have happened while the smartwatch was being charged, not while being worn. And while displays have been popped off by the force of the swelling, there haven’t been reports of injuries or of the devices actually catching fire. In that sense, AAPL has been fortunate.

But with a new Apple Watch Series 3 potentially arriving in the fall, you can bet AAPL is paying close attention to its battery. That new Apple Watch is expected to have additional functionality including optional cellular connectivity.

Making the battery even last all day without expanding the size of the smartwatch is going to be a challenge. And now — thanks to the original Apple Watch battery issues — Apple Inc. is going to need to balance that need for more power, with being extremely cautious about strapping lithium-ion batteries to owners’ wrists.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/05/apple-inc-aapl-has-an-apple-watch-problem/.

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