ATI warranty reduction explained

Sidney · 4th October 2005, 18:28

Quote:

As ATI Technologies continues to grow as a company they are going to have to make some changes along the way. Sure, every company has growing pains along the way, but Legit Reviews does not see this warranty reduction as a bad thing. We hope that it will increase warranty competition among the third party builders and in the end it will be the consumers who win.

http://www.legitreviews.com/article.php?aid=253

Well, I believe it is all B/S. ATI a public company is well known, so what? Private or public company, making money to the shareholdes is a given. Keeping inventory for warranty return does not happen to ATI alone. Replacement of current product at similar performance will satisfy a customer with $600 card that died after 15 months of occasional use.

Sorry, I just don't buy the excuse. Having products available at launch will have good bottom line result; paper launch and cutting warranty don't.

jmke · 4th October 2005, 19:12

Quote:

I've given the warranty situation a bit more thought and I can only arrive at the following conclusions, let me run them by you and see whether you agree, but let me first summarize the gist of the matter:

'In essence it comes down to the fact that there would be no point to reducing the warranty if ATI didn't feel it would significantly reduce warranty fulfillment costs. In other words, they do it because they expect cards to fail which will need to be replaced or repaired which cuts into their revenues.'

Let me illustrate this with an example. Suppose you work at a car manufacturing plant and you machine a part for the gearbox that makes sure it is properly lubricated. For some reason you manage to machine these wrong which will cause them to break within 100K miles and ship a box of 1000 off to manufacturing. The next day you report your error to management and they investigate. The company does an analysis and determines that in 10% of the cases the gearbox will break down while the car is still under warranty. Therefore it is less expensive to only repair warranty claims than to have a full recall for all the cars made that day to replace the part.

So, a warranty is simply a cost item for a manufacturer. The longer you warrant something the more failures you will have to pay for. Especially when you cut corners by using lesser quality parts, as illustrated above, which could very well be the case here. Shorter warranties means less cost, but you have to ask yourself does it come with a price reduction for the consumer? If not then the company is simply trying to up their revenue by cutting costs. Either because they use cheaper, lesser quality parts that have a shorter lifespan, hence the product is now of lesser quality overall, or because current warranty claims eat up a (substantial) part of their revenue. A reduction in warranty should go hand in hand with a price reduction, if not, then the above is true.

Regards,

Sander Sassen
CEO, Founder - Hardware Analysis
http://www.hardwareanalysis.com

5th October 2005, 10:30

first we had the crossfire scam and now this ?

they're full of B/S if you ask me, ATI is history in my book

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5th October 2005, 10:30	#3
Jaco Posts: n/a	first we had the crossfire scam and now this ? they're full of B/S if you ask me, ATI is history in my book