In an era where Indian consumers upgrade their smartphones every 2-3 years and electronics are becoming increasingly integral to their daily lives, protecting these investments has become more critical than ever. A recent study revealed that the global consumer electronics market is projected to reach USD 1,467.94 billion by 2032, and with increasing adoption, demand for device protection plans is also growing, with the mobile phone insurance market predicted to reach USD 76.36 billion by 2030
Another survey conducted in the recent past revealed that 78% of consumers are more likely to purchase from a retailer offering an extended warranty or device protection plan. More importantly, 65% said they would return to the same brand if their protection plan claim was handled smoothly. These statistics highlight a significant opportunity for retailers and OEMs: protection plans are not just a post-sale service, they're a trust-building and revenue-generating tool.
What Are Device Protection Plans?
Device protection plans (also called extended warranties or product insurance) cover accidental damage, mechanical breakdowns, and sometimes theft or loss. They offer peace of mind and extend the product lifecycle for customers.
Types of Protection Plans in India
Extended Warranty - It is suitable for all types of consumer electronics ranging from smartphones, tablets, laptops and televisions to air conditioners, refrigerators and microwave ovens. An extended warranty plan safeguards these devices beyond the standard warranty period against manufacturing defects and hardware failures.
Screen Protection Plan - It is suitable for smartphones, tablets, laptops, desktops and televisions. This type of plan allows for hassle-free repairs or replacement for cracked or damaged screens due to accidental drops.
Accidental Damage & Liquid Damage Plan - Also known as ADLD, this plan is suitable for smartphones, tablets, laptops, desktops and televisions. It covers your device against unexpected spills, drops, and mishaps that cause physical or liquid damage.
Comprehensive Coverage Plan - An all-in-one protection plan that usually features all the benefits mentioned in the above-mentioned plans.
Why Device Protection Plans Build Customer Trust
1. Transparency Builds Confidence
When customers are offered a clearly explained protection plan at checkout, detailing the coverage period, claim processes, and pricing, they perceive the brand as honest and consumer-first. This transparency encourages positive sentiment and boosts the customer lifetime value (CLV).
2. Quick Claims Create Brand Advocates
Frictionless claims processes drive brand loyalty. In fact, a PwC study on consumer loyalty found that 32% of customers would walk away from a brand they love after just one bad experience. Smooth claim approvals and quick replacements help transform potentially negative experiences into loyalty-driving moments.
Role of Device Protection Plans in Driving Repeat Sales
1. Creating a pull effect
Offering multi-device coverage or discounted protection on future purchases encourages customers to stay within your ecosystem. For example, a customer who buys a smartphone and insures it is more likely to buy matching accessories, renew protection, or upgrade to the same brand.
2. Bundled Offers = Higher AOV (Average Order Value)
Retailers offering bundled device protection often see a 15-25% increase in average order value. The upsell potential not only boosts margins but also provides customers with a comprehensive purchase experience.
3. Incentivising Trade-ins and Upgrades
When a device is covered and a customer is assured of its value, they are more likely to opt for trade-in programmes. This smooth transition supports repeat purchases and increases brand stickiness. Renowned brands like Apple and Samsung offer excellent trade-in programmes on smartphones and accessories during their new launches.
Retention That Lasts
In today’s hyper-competitive marketplace, customer trust and retention are more valuable than mere sales. Device protection plans offer a win-win, peace of mind for the consumer and repeat business for the brand.
By integrating seamless, customer-first protection programmes into your post-sale strategy, you are not just offering security, you are building an ecosystem of loyalty, reliability, and long-term value.
Frequently Asked Questions
1. What is the difference between an extended warranty and a protection plan?
An extended warranty usually covers mechanical breakdowns beyond the standard warranty period, while protection plans may also include accidental and liquid damage.
2. Are device protection plans worth buying for smartphones or laptops?
Yes. With rising repair costs and shorter upgrade cycles, protection plans provide peace of mind and help extend the device’s lifecycle.
3. Can I buy a protection plan after purchasing my device?
Many brands allow protection plan purchases within a limited period post-purchase (usually 7–30 days). It's best to check with the retailer or OEM.
4. What is covered under accidental and liquid damage protection?
It typically includes screen cracks, drops, spills, and water damage — subject to terms and conditions outlined in the plan.
5. How do device protection plans impact customer loyalty?
A smooth claims experience and transparent coverage build trust, which significantly increases repeat purchases and brand preference.
