Premium Vendors – Are They Going The Way Of The Dodo?

When some people shop for computer parts, they purposely look at the ones with the longest warranties, knowing that they are likely to be built to a better specification, as no manufacturer wants to be supporting bad parts – it’s a sure way to bankruptcy.

Some manufacturers have sprung up with that idea in mind, purposely building a higher quality product, and charging a premium price for their wares. For example, XFX has the remarkable double-lifetime warranty, meaning that if you properly register your product, you have a warranty for the entire time you have the product, and your product has a lifetime for anyone you sell or give it to when you are done with it. This is the strongest warranty I’ve ever seen, and so I have purchased several products from XFX because of it. I have not been let down, none of the video cards has ever failed.

Several other manufacturers have almost as strong warranties, being the lifetime of the buyer. EVGA, BFG, and OCZ have offered such warranties, along with the maker of any quality RAM product. Bright Side of News has a disturbing story about the slow removal of some of these warranties, in a very surreptitious way. -

Ever since premium service vendors appeared on the IT market, one of main selling point was the level of service. When vendors such as Corsair, BFG, EVGA, OCZ appeared and offered lifetime warranty and excellent end-user support, most of our Taiwanese sources started to disclose their business models and claimed that operations such as EVGA cannot succeed due to low margins.

More than half a decade later, EVGA turned into quite a large operation, and with acquisition of EPoX engineering team the company started to produce brilliant motherboards as well. Recently, the company launched several engineering projects of their own, such as Classified motherboards and graphics cards [GTX285 Classified can take up to 600W of power] or GTX 275 Co-Op and there was no telling that we were impressed with the level of commitment.

Personally, I had the most fun talking to Tier 3 motherboard vendors when EVGA entered the world of non-nVidia-chipset market. The feeling of light panic was in all of my sources eyes, who asked how they can expect to succeed. My default approach is to analyze the past of all the companies involved in the market and see where their strengths are. For instance, EVGA could always command a price premium and customers would buy them due to combination of solid product, multiple SKU [Stock Keeping Units] based on a single product that passed additional testing, top-of-the-line warranty and customer service second to none. Personally, I worked with EVGA Europe ever since their inception and saw them growing to stratospheric levels of revenue, just as was in the past with Hercules and Gainward. The key to success in Europe was the fact that EVGA’s European operation was former Hercules and Gainward team [remember Golden Sample and H2O series or even back further, Hercules re-entry into graphics with nVidia cards?] lead by Hans Wolfram Tismer from operational side, Andreas and Aline handling sales and Peter Tersluisen from technical side [guilty party for Black Perl series].

But at the same time, we have noticed something odd is happening. In the past few months, EVGA started to introduce more and more products that do not carry lifetime warranties. Naturally, there are two sides to this story – from one, the conclusion would be that EVGA is getting rid of their lifetime warranties while the other side could be that these products were merely EVGA trying to push its products on those who do not care for lifetime warranties and would rather have inexpensive products rather than a lifetime warranty.

I’m not sure who this would be. Most people I know of know the benefit of a lifetime warranty, for them, or anyone else coming into possession of a product. I know that EVGA has offered lifetime warranties on a couple of products I have recently purchased, yet it was up to the user to be aware of the fact. It was not on the box, or found in the setup instructions, or any other paper included. Once on the website to register, however, the lifetime warranty was there, as if a reward to the faithful, who are good little do-bees, and register the product – guaranteeing a steady stream of EVGA product notices in their mailbox.

Slowly but surely, we believe that those who thought the lifetime warranty was going away are beginning to become right. Here is a recent breakdown of EVGA’s most recent products:

• GT 240 – 2 years
• GTX 275 CO-OP – 2 years
• GT 210 and 220 – 2 years (yes this is a mainstream part, we can expect that to happen)
• Entire P55 Lineup (6 different boards) – 3 years
• GTX 285 Classified – 2 years

Now, the interesting part about the minimum warranty is the fact that EVGA US may claim that they offer “double the standard warranty.” But in the European Union, manufacturers have to offer two year warranty by law, just like they can’t offer lifetime warranty [EVGA, Corsair and others offered 10 year warranty instead]. In any case, all of the recently introduced EVGA’s products carry a minimum warranty, which confirms the claims of Taiwanese manufacturers – EVGA cannot keep up the warranty scheme. A business model that worked for a decade obviously isn’t working anymore, even though – how come remaining premium vendors are still in the business?

I had no idea that the EU had mandatory warranty structures like that. I wonder how that affects resellers such a PNY who offer the no-lifetime warranty warranty. In case that needs explaining, PNY offers a warranty that is listed as lifetime, but PNY is the arbiter of what lifetime means. In the case of their memory, it means that if you purchase PC-133 DRAM, once that type of RAM is no longer widely used in motherboards, your warranty is over, because PNY has decided that the lifetime of the memory is over.

Why this has not caused a class action suit is beyond me.

Most people associate EVGA with their lifetime/10-year warranty and the step-up program. Asking almost anyone who is familiar with the brand and they will associate EVGA with their lifetime warranty and their customer service. Now, if they let their lifetime warranty slip, who’s to say they won’t or aren’t letting their customer service slip too? We heard rumors that EVGA might be letting the step-up program go as well but given the origin of those sources [competing manufacturers], we aren’t inclined to believe that is going on. We contacted our regular contacts at EVGA but are yet to receive an answer.

The last product to be released by EVGA that carried a lifetime warranty appears to be the X58 SLI 4-Way SLI motherboard, which needless to say is not a board that we’d expect them to sell many of considering the $500 price point and lack of availability up until recently. While we understand that some products may have limited production runs, and that the warranty may reflect that… There is still reason to grant a lifetime warranty if EVGA really wanted to as there have been limited run products in the past.

The story has an update, including a message from EVGA that the step-up program will continue, and as they are able to manage, some products will have the lifetime warranty.

I realize the problems of business, but I also realize the attraction of the lifetime warranty. It will be a loss to many if the lifetime warranty is lost, and I believe it will adversely affect EVGA sales. after all, when you no longer compete on warranty, and don’t offer products distinguished from run-of-the-mill any other way, you must either compete aggressively on price, or lose share.

Not only does this show the beginning of a bad trend, It shows the lack of faith that a company has in its own products. After looking through the OCZ catalog of products, I find nothing that has a lifetime warranty other than memory offerings.

Thank goodness BFG Tech and XFX are still holding the line. These are two of the companies that will continue to get my business, on the basis of quality of products, as well as warranties. (It can be argued that the lifetime warranty forces the continued high quality of products released instead of simply the converse.)

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