The SquareTrade study utterly fails to provide any meaningful statistical analysis of its numbers. It finds “the average total failure rate of laptops to be 31% over 3 years”. An average can not stand on its own: to be of statistical use, it must be accompanied by at least a standard deviation of the data from which the average was taken. (A range would be helpful, too). SquareTrade’s sloppiness becomes more evident with a closer reading.

“Apple is in fourth place in laptop reliability” was the headline used by many tech websites to push this SquareTrade study. But the graph upon which the headline ranking is based (on page 6 of the report) was created using a linear projection from TWO DATA POINTS. Here’s why this is a problem: fitting a curve that will have any prognostic capabilities requires more than two data points. More data points mean more complications. So, to handle the extra data, the researcher/underpaid intern at SquareTrade must understand curve fitting, specifically the coefficient of determination (calculated to make sure the curve fits well). When you only have two data points to model, however, two things happen: (1) you can easily model the two points with a linear curve that perfectly fits the data (R2=1). (2) Your model is capable of predicting nothing. So, the SquareTrade authors have formed an inappropriate model based on sloppy data to make fallacious projections.

(via Daring Fireball)