White Paper 2012

Better Safe than Sorry: The Benefits of

Protecting Electronic Devices

Why individuals, businesses and schools seeking to save money, recover lost or stolen

electronics and foster peace of mind would benefit from purchasing device insurance,

extended warranty or protection.

by Allison Way, Inboun

March 13, 2012

ProtectMe Plans | 1

Better Safe than Sorry:

The Benefits of Protecting Electronic Devices

Why individuals, businesses and schools seeking to save money, recover lost or stolen electronics and

foster peace of mind would benefit from purchasing device insurance, extended warranty or protection.

Executive Summary

There are few industries that have continued to thrive in

spite of the recession. The obvious ones include the

healthcare industry and the sin industries (which include

liquor, cigarettes and gambling). But another industry that

has not only survived the recession, but has flourished

during it, is that of consumer electronics (CE).

According to the Consumer Electronics Association, the

average American Household spent $1,380 over the past

year on consumer electronics such as HDTVs, cell phones,

video game systems, computers, portable music devices

and Blu-ray players. Consumer electronics is now a $165

billion per year industry.1

Society today relies heavily on electronic devices for

typical, everyday actions and interactions. Electronic

gadgets wake users up in the morning, reminds them of

birthdays on their calendars and even allows them to

check-in for flights with the touch of a button. In fact,

psychologists and psychiatrists alike have seen such a

dramatic rise in electronic dependency that terms such as

“cell phone obsession” and “obsessive phone disorder”

have been coined.

1 Mangan, Holly. "How Addiction to Electronics Affects the Environment & Our Lives."Money Crashers. SparkCharge Media, LLC, 13 Oct. 2011. Web. 02 Mar. 2012. <http://www.moneycrashers.com/are-we-addicted-to-consumer-electronics/>.

Because of the rising electronic dependency as well as the

boom in the consumer electronics industry, protecting

damaged, lost and stolen gadgets seems more crucial than

ever before. The scary reality is that many times, devices

cannot be recovered, they cannot be replaced quickly, and

they cost a great deal of money to restore. But with a

satisfactory protection plan, insurance plan or extended

warranty, these scenarios can be avoided.

Nonetheless, users continue to ask themselves:

“Is electronic protection worth it?”

“Am I really going to use the protection plan?”

“Are my electronics worth the protection?”

This white paper confirms that device protection is well

worth it, as it provides users with money-saving

opportunities, better electronic recovery options and

much-needed peace of mind.

ProtectMe Plans | 2

Insurance vs. Extended Warranty vs. Protection Plan

Many consumers are unaware that there are options when

it comes to device protection. The most common options

include traditional insurance, extended warranties and

protection plans (also known as service agreements).

Traditional Insurance

Many consumers know traditional insurance because it is

the avenue that most take when protecting personal

property, usually as a rider to a homeowner’s or renter’s

policy. Traditional insurance covers only expenses

resulting from a covered peril (for instance, theft, fires,

flooding, wind and other natural disasters). Traditional

insurance will not cover property that has been lost or

misplaced. In addition, traditional insurance does not

cover mechanical failures, breakdowns or accidental

damage (unless it has been caused by an insurable peril, as

mentioned above). But most importantly, traditional

insurance does not offer individual coverage for smaller,

portable electronics such as mobile phones, tablets and

laptops.

Extended Warranty

Oftentimes, consumers look into purchasing extended

warranties for individual devices. Before purchasing an

extended warranty, the consumer must understand that

this type of coverage only protects against mechanical

breakdowns or device failures covered under the

manufacturer’s limited warranty. In other words, an

extended warranty does not cover damaged, lost or stolen

items. Extended warranties catch the eyes of many

consumers because there are usually no deductibles

included.

Protection Plans (Service Agreements)

A protection plan, also known as a service agreement, has

been classified as a combination of both traditional

insurance and an extended warranty. Protection plans

offer extended warranty coverage without the deductibles

and also cover accidental damage from drops, spills and

other unpredicted accidents. Some protection plan

companies, such as ProtectMe Plans, also offer coverage

for water damage. In addition, protection plans offer

enhanced coverage to protect against both lost and stolen

items. This type of protection is only provided by

independent third parties rather than by device retailers

and is often the most cost-effective option.

THREE PROTECTION TYPES

TYPE LOST & STOLEN

MECH. FAILURE

DAMAGE WATER DAMAGE

INDIV. COVERAGE

Insurance X* X* X*

Extended Warranty

X X

Protection Plan

X X X X X

*only if caused by a covered peril

A DAY WITHOUT DEVICES

No alarm clock or mobile phone to wake up to • Silence

throughout the house without a TV • Unable to check the

weather before leaving the house • Lost in the car without a GPS

system • Handwrite all important documents at work • Get

info and updates from a local newspaper instead of Twitter •

Hand wash all dishes without a dishwasher • Work out in silence

without an iPod or MP3 player • No access to

emails/texts/calendars

ProtectMe Plans | 3

Putting a Price on a Device

There are consumers who purchase basic cell phones and

standard appliances and refrain from buying any cutting-

edge electronics such as tablets, smartphones or laptops.

And for those users who are still using flip phones and

basic appliances, a protection plan may not be necessary.

However, for the majority of consumers using more

expensive, sophisticated gadgets2, can you really put a

price on a device?

Devices are made up of much more than sleek, modern

hardware and intricate wiring. The software programmed

inside many of today’s devices may be of more value. Just

look at the standard smartphone. These devices hold

more precious material and information than any other;

contact lists, apps, email, music, GPS systems, notes,

calendars, calculators, Internet, pictures, video and much,

much more. Therefore, when a smartphone is lost or

broken, all of its precious information is either lost or

irretrievable as well. Even the most basic mobile phones,

tablets and laptops have the potential of losing valuable

information in a matter of minutes.

Household appliances and electronics are worth more

than their price tag to fully replace them as well.

Refrigerators keep food cool, healthy and nutritional.

Televisions entertain and inform. Washers and dryers

spare users from the inconvenience of hauling loads of

clothes to the laundromat. When household appliances

break, it’s not just the product that is missed—it’s the

value it adds to an everyday routine.

The Benefits of Device Protection

Phones, tablets, laptops, televisions, appliances: they’re all

electronic, therefore, they’re fragile, easily lost and

susceptible to theft. Technology is never fail-proof and

downtime is an inevitable and daily risk. According to

Asurion, 164,383 cell phones are lost every day. This adds

up to approximately 60 million phones that are lost, stolen

or damaged each year.3 Lucky for device users, there are

options out there for protecting devices (and pocketbooks)

from facing these drastic scenarios.

2 Elmer-DeWitt, Philip. "Nielsen: 66% of Americans Ages 24-35 Own a Smartphone."CNN Money. CNN, 20 Feb. 2012. Web. 05 Mar. 2012. <http://www.digby.com/mobile-industry-resources/mobile-industry-statistics/>. 3 Asurion Homepage. Asurion, 2011. Web. 2 Mar. 2012. <http://www.asurion.com/>.

Saves Money in the Long Run

Users have been asking the same question for years: is it

worth it to protect my devices? Am I going to spend more

money by purchasing a protection plan than replacing my

device? Is a protection plan a smart purchase?

These questions are raised for good reason. Protection

and insurance are solid, but they always come at a price.

It is up to the user to decide whether that purchase is

worth it or not. According to TrackItBack, the world’s

largest lost and found recovery service:

Mobile phones won’t cost you an arm and a leg when

you are signing a new contract or upgrading. But if you

want to buy a new phone while on a contract, that can

start to become expensive. In fact, it will most likely

be more than what you paid for it the first time. And

even after you get your new device there are still many

things to do such as re-enter all of your contact

information, reprogram your phone, reinstall your

software, and so on.4

A full-blown protection plan may be the biggest money-

saver in the long run. Users who have purchased

warranties and extended warranties often find themselves

wishing they would have purchased a full protection plan

because of the increased level of coverage. Warranties

and extended warranties do not cover spills, drops and

theft that often take a toll on gadgets, and especially on

those that are on the move like phones, tablets and

laptops.5

In addition, some insurance companies give users the

opportunity to purchase in bulk and receive discounts. In

fact, on some protection plans, users can save up to 30%

more on plans when covering fleets of phones, tablets,

laptops or other devices. This option makes the most

sense for families, businesses and schools.

4 TrackItBack. Technology. Losing Your Cell Phone Can Mean Losing So Much More.PR Leap. 19 Oct. 2006. Web. 02 Mar. 2012. <http://www.prleap.com/pr/52253/>. 5 "Is Tablet Insurance All It's Cracked Up To Be?" ProtectMe Plans. Web. 02 Mar. 2012. <http://protectmeplans.com/blog/46-is-tablet-insurance-all-its-cracked-up-to-be.html>.

ProtectMe Plans | 4

Recovery of Lost or Stolen Devices

As mentioned above, one of the biggest benefits of device

protection or insurance is that they often cover lost and stolen

items; a feature that warranties and extended warranties do not

offer. Extended warranties, traditionally sold by retailers, also tend

to be more expensive than comprehensive protection plans.

According to ProtectMe Plans, 113 cell phones are lost or stolen

every minute.6 FOX News WFLD in Chicago tested this statistic and

many others when it purposefully lost two cell phones in the busy

city in November of 2005. A little over three hours later, the cell

phones were returned to their rightful owners. But many device

users do not get so lucky. In a study conducted by Pointsec Mobile

Technologies, a mobile-data protection software company in

Chicago, it was found that one cab company in Chicago found 387

mobile phones, 97 PDAs and Pocket PCs and 20 laptops toward the

end of 2004.7

But lost and stolen items do not limit themselves to mobile phones. Thousands of tablets are lost each week in US airports.

Another 4,425 laptops disappear from Chicago cabs in just six months.8

Source: http://thefw.com/lost-cell-phones-infographi

6 "ProtectMe Plans." ProtectMePlans. 2011. Web. 02 Mar. 2012. <http://protectmeplans.com/>. 7 TrackItBack. Technology. Losing Your Cell Phone Can Mean Losing So Much More.PR Leap. 19 Oct. 2006. Web. 02 Mar. 2012. <http://www.prleap.com/pr/52253/>. 8 "ProtectMe Plans." ProtectMePlans. 2011. Web. 02 Mar. 2012. <http://protectmeplans.com/>.

0%

20%

40%

60%

80%

100%

The Top 10 Worst Places to Lose a Mobile Phone

Lowest Chance of Recovery Highest Chance of Recovery

CHECK THE FACTS:

96% of the U.S. population uses cell phones.

The average cost to resolve & replace a phone is $125.

Miami, FL has the highest rate of lost or stolen phones.

The top 3 worst places to lose a phone: the swimming pool, a

taxi and the airplane or airport.

54% of all smartphone users do not password-protect their

phones.

Source: http://thefw.com/lost-cell-phones-infographic/

ProtectMe Plans | 5

Peace of Mind

Protection plans, specialty insurance plans and extended warranties do not just offer lower rates and better coverage; they also provide peace of mind for the end user. Because many protection plans cover mechanical failures, common breakdowns, accidental damage, as well as lost and stolen items, consumers can use their devices without the daily concerns of cracks, spills and random (and unpredictable) failure.

The following is based off of protection plans offered by ProtectMe Plans.

Mechanical Failure: Mechanical failure and other types of breakdowns occurring as the result of the normal use of the product are commonly addressed by a manufacturer’s warranty during the first six to 12 months, depending upon the manufacturer’s warranty period. However, protection plans offer benefits after the manufacturer’s warranty period ends. This provides the user with peace of mind with extended coverage immediately after the manufacturer’s warranty expires.

Accidental Damage: Protection plans also have the ability to add accidental damage (or ADH) protection to products resulting from drops, spills and other accidents that occur during the normal use of the product. For users who suffer from “butterfingers” or are often around liquids such as pools and sinks, an ADH plan is a beneficial option for increased peace of mind.

Lose and Stolen: Finally, as mentioned in the section above, many protection plans offer lost and stolen plans as well, which can provide ultimate peace of mind for the end user (see page 3 for more stats and information).

Conclusion

Protection plans combine the right price, the right services

and the right peace of mind that users need in order to

protect their devices from failure, drops, spills and breaks.

.Cutting-edge technology that users depend on daily

deserve cutting-edge protection providing the necessary

levels of coverage to help keep customers calm, cool and

collected if something ever happens to their precious

gadgets.

CHECK THE FACTS:

85,600 mobile phones, 21,500 PDAs, and

4,425 laptops were left in Chicago’s taxi cabs

in the last 6 months of 2004.

Source: Pointsec Mobile Technologies

ProtectMe Plans | 6

References

Asurion Homepage. Asurion, 2011. Web. 2 Mar. 2012. <http://www.asurion.com/>.

Elmer-DeWitt, Philip. "Nielsen: 66% of Americans Ages 24-35 Own a Smartphone."CNN Money. CNN, 20 Feb. 2012. Web. 05 Mar. 2012. <http://www.digby.com/mobile-industry-resources/mobile-industry-statistics/>.

"Is Tablet Insurance All It's Cracked Up To Be?" ProtectMe Plans. Web. 02 Mar. 2012. <http://protectmeplans.com/blog/46-is tablet-insurance-all-its-cracked-up-to-be.html>. Mangan, Holly. "How Addiction to Electronics Affects the Environment & Our Lives."Money Crashers. SparkCharge Media, LLC, 13 Oct. 2011. Web. 02 Mar. 2012. <http://www.moneycrashers.com/are-we-addicted-to-consumer-electronics/>. "ProtectMe Plans." ProtectMePlans. 2011. Web. 02 Mar. 2012. <http://protectmeplans.com/>. TrackItBack. Technology. Losing Your Cell Phone Can Mean Losing So Much More.PR Leap. 19 Oct. 2006. Web. 02 Mar. 2012. <http://www.prleap.com/pr/52253/>. Wright, Shauna. "The 10 Cities You're Most Likely to Lose Your Cell Phone in and More Surprising Missing-Mobile Facts." TheFW. 15 July 2011. Web. 02 Mar. 2012. <http://thefw.com/lost-cell-phones-infographic/>.

ProtectMe Plans | 1.800.504.7814 | www.protectmeplans.com

About MobileMotive

MobileMotive LLC is a trusted extended warranty provider that specializes in simplifying and streamlining product protection

plans for popular consumer electronics and appliance purchases. Through our flagship product ProtectMe®, we deliver superior

customer service, noticeable value and specialized technical support for shoppers nationwide, freeing retailers and dealers to

focus on their core business operations.

A customer-focused company, MobileMotive offers a broad range of standard and optional product warranty solutions. We

step in where most programs stop, delivering superior protection for both new and used or refurbished devices. By

concentrating our business efforts solely on extended warranty and protection products, we're proud to offer highly

competitive pricing, broader coverage, lower deductibles and extremely responsive claims processing.

As an independent and impartial partner, MobileMotive is proud to offer its flagship product ProtectMe® to provide

consumers, businesses and schools with confidence and security that claims will be covered even in the unfortunate event of

retailer or manufacturer failure. Consumers can shop with renewed confidence knowing their protection plan is firmly backed

and underwritten by a reliable insurance policy.

We believe customer service excellence begins with enthusiastic and motivated associates. That's why we promote a corporate

culture built on solid performance incentives, team collaboration, superior benefits and compensation packages. Based just

outside of Kansas City in Overland Park, Kansas, MobileMotive incorporates a full staff of professionals dedicated to providing

top-notch products and customer service.