Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of

MORRISVILLE, N.C. – Ray Gorman, head of media relations at , has come out of his corner swinging in a PR bout with an after-market warranty firm that has questioned the reliability of the world’s No. 4 PC maker products.

The company – SquareTrade – is fighting back, too, with an aggressive on-line defense.

The bout erupted last week when SquareTrade’s study

• Asus, No. 1
• Toshiba, No. 2
• Sony, No. 3
• Apple, No. 4
• Dell, No. 5

Acer came in seventh, Gateway (now part of Acer) eighth and HP ninth.

SquareTrade based its study on a survey of 30,000 laptops and two-year failure rates.

Gorman fired back, : "PC hardware is extremely reliable, and this study is full of holes …[the] method is flawed, the data is inaccurate, and the conclusion is wrong."

According to Gareth Halfacree at Bit-Tech Net, Gorman said the SquareTrade survey was inadequate. Based on worldwide shipments of more than 140 million laptops alone in 2008, Gorman said the "total number claimed in this report is not a statistically significant sample for a study where no attempt is made to control key variables affecting repair rates, such as comparable machine types, end users, geography, and applications.”

He also pointed out that since SquareTrade sold warranties that the company "has a vested interested in showing scary failure rates as they have done here [as] they are in the business of selling after sale warranties.”

Vince Tseng, vice president of marketing for SquareTrade, saw Gorman’s comments and to counterpunch Gorman.

“SquareTrade’s study examined data from 30,000 laptop owners, which we believe to be a very statistically significant sample,” he wrote. “When a national publication polls Americans on their attitudes towards political matters, they poll 1000-2000 people; a sufficient sample size to represent the 230 million Americans.

“We did not control for the variables Mr. Gorman mentioned, but we also did not feel it necessary. With an average sample of over 3000 laptops per manufacturer, our sample size is large enough to assume a random distribution of users for each variable.

About the warranties, Tseng conceded: “I won’t dispute the fact that SquareTrade is in the business of selling warranties. However, I do dispute the fact that we’re trying to scare consumers to buy warranties.

“We find our overall results for laptop failure rates to be very consistent and in line with other organizations that have reported research. We direct our readers to the following reports:
• “In June 2006, Gartner reported actual failure rates of 28% for systems purchased in 2003-2004. They projected a 22% failure rate, based on 1 year of data for systems bought in 2005-2006.
• “In November 2007, Consumer Reports reported “Repair Rates for 3- to 4-year-old” Laptop Computers at 43%.

“With our results showing a LOWER failure rate than reported by these other sources, we are telling consumers they need warranties LESS frequently than the numbers published by Consumer Reports. If anything we’re providing “less scary” numbers than Consumer Reports and Gartner on laptops.

“Furthermore, we have also published past research reports that show device failure rates far below the point at which it makes sense for most consumers to purchase warranties. Most recently, our Game Console failure rate study from August 2009 found that only 2.7% of Nintendo Wii systems failed over 2 years. We would not have published such data if our only interest was in selling warranties. We provide the information to consumers and make affordable warranty protection available to them. It is up to them to make the decision of whether a warranty is worthwhile.”

So who will win in this fight? The buyers will be the judges.

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