How will the iPhone 6 and iPhone 6 Plus make it’s impact on the cell phone repair industry?
As far as the actual iPhone …it’s business as normal. Many say it’s easier to disassemble, less screws and easier to remove the LCD screen than previous iPhone 5, 5c and 5s models.
On the other hand, Apple defiantly intends to make an impact (a huge one) with their new Apple Care protection plans and out-of-warranty policies concerning cracked screen repair.
How much different you ask?
Night and Day. Male to Female. North to South. …you get the picture.
We’ve contacted Apple directly (twice, to confirm) and you’re sure to be as shocked as we are.
This time, Apple has spoken loud and clear to 3rd party repair shops about it’s intentions of being a major competitor in the cracked screen repair industry.
Old AppleCare Did Not Convert
Previously, cracked screen repairs weren’t covered under iPhone’s 1 year manufacture warranty or even it’s paid Apple Care Protection plan. The cost to repair a cracked screen with an Apple Care Protection plan was significantly reduced, most iPhone users did not purchase an AppleCare warranty up-front which made the repair price competitive enough for 3rd party repair shops.
Especially considering that Apple iPhone users needed to make an appointment with a tech from the Genius Bar and also be located within a reasonable driving distance to one of Apple’s 253 US retail locations.
Considering that a cracked screen is the most likely cause for “defect”, Apple Care Protection Plans really didn’t make much sense to purchase. Ex Apple Employee even says so himself.
I always buy AppleCare for desktop Macs. iMac AppleCare is cheap considering it covers a difficult repair and cost of the integrated display. Mac Pro AppleCare is an investment on an expensive machine that will last at least three years.
I would never buy AppleCare on a iPod, iPhone, iPad, or AppleTV. These devices are more likely to be dropped or stolen than require repair for a manufacturing defect.
Mobile phone insurance between the top 4 carriers is a 15+ billion dollar industry and Apple simply has yet to capitalize on this segment to date. Most likely by design, Apple relied on retailers and US post-paid carriers to sell their devices since prior to iPhone 5, US carriers accounted for the vast majority of iPhone sales worldwide (with a handful being sold unlocked at full MSRP).
Now that Apple is selling to carriers and retailers worldwide, they won’t feel so bad about sinking their teeth into the warranty market their retail partners have been able to take advantage of with little to no direct competition.
Mobile Phone Service Contracts & Insurance
Premiums Paid per Year by US Consumers, 2013
Total Sales = $12.14 Billion – Source: WarrantyWeek.com
iPhone Repair Cost Prior to iPhone 6 Launch
| Model | Accidental Damage (Apple) | AppleCare (Apple) | 3rd Party Repair Shop |
| iPhone 4 | $149 | $178 | $70 |
| iPhone 4s | $199 | $178 | $70 |
| iPhone 5 | $269 | $178 | $100 |
| iPhone 5c | $269 | $178 | $120 |
| iPhone 5s | $269 | $178 | $120 |
*Apple Care cost includes the cost of AppleCare ($99) + $79 Replacement Cost
iPhone Repair Cost After iPhone 6 Launch
| Model | Accidental Damage (Apple) | AppleCare (Apple) | 3rd Party Repair Shop |
| iPhone 4 | $149 | $178 | $70 |
| iPhone 4s | $149 | $178 | $70 |
| iPhone 5 | $129 | $178 | $100 |
| iPhone 5c | $129 | $178 | $120 |
| iPhone 5s | $129 | $178 | $120 |
| iPhone 6 | $109 | $178 | $440 |
| iPhone 6 Plus | $129 | $178 | $440 |
Using graphs, it’s much easier to see the changes:
*AppleCare cost includes the cost of AppleCare ($99) + $79 Replacement Cost
Of course, the iPhone 6 and iPhone 6 plus LCD screen cost is very expensive right now and will surely go down over time. That’s not the statement I’m trying to make.
It took 7-8 months of the LCD screen price to depreciate for 3rd party repair shops to come in as the cheapest cracked screen repair option for iPhone 5 (similar trends with iPhone 5s/5c)
Graphed above shows an expected trend of repair prices assuming similar 3rd party LCD cost depreciation and iPhone’s repair cost staying the same.
Assumptions:
- The distance between repair price points will be much further apart for longer periods of time.
- This will make repair options more limited (based on price)
- Price differences are so large that less consumers will convert for any repair at all and wait to sell their device. (Assuming they don’t know about the $109 out of warranty cost)
Knowing that the iPhone 6/6+ has a larger screen size, better resolution and has more technology within the LCD module it’s practical to think that the price for LCD screens won’t diminish and stabilize as fast as iPhone 4/4s/5/5c/5s have and mimic the pricing trends of Galaxy models. (Starts high, gradually goes down but high initial cost keep the LCD cost high 1+ year post launch)
eBay iPhone 6 replacement parts today show prices ranging from $400-$600.
The good news is that Apple’s repair prices for older models such as iPhone 4/4s/5 keep repair shop prices competitive with Apple’s repair cost. Also, smartphone devices on the booming prepaid industry are replacing old flip, bar and qwerty style devices. While repair shops might lose repair market share for the newest flagship models they’re sure to dominate the older discontinued models.
Express Replacement Service
Apple has always had Express Replacement Service. The concept is fairly simple:
- Places “repair” (replace) ticket in system via online support
- Apple authorizes your credit card for full amount of device + cost of repair (out of warranty or AppleCare)
- Overnights a new replacement via FedEx Express
- Customer sends old device back in replacement box with prepaid label.
- As long as device gets back as stated, Apple released “security deposit”
It didn’t really make sense to do this before because the cost to repair was cheaper through a 3rd party. At least for cracked screens where water damaged & inoperable devices made BETTER sense.
Now consumers have the option of doing an express replacement for out-of-warranty devices for an additional $29.99.
So for $138.99 (iPhone 6) amd $159.98 (iPhone 6 Plus), consumers can have a replacement device sent to them the next day without leaving their home.
It’s worth mentioning the device can’t have any other defects or water damage or Apple could impose additional charges against the temporary hold on your credit card.
Not a bad option for those cracked screen consumers who are aware of the ERS program, aren’t near an Apple store and have enough $ to cover the MSRP “deposit” for a few days.
Conclusion:
As it is, most major news publications and popular tech blogs (macrumors & cultofmac, for example) are posting inaccurate replacement costs reflecting $299+. Reasonably so, Apple’s website wasn’t exactly straight forward leaving most to assume previous repair cost options. So many tech blogs continued to report inaccurate information that we contacted Apple Support twice to make sure. With that said, the main issue I see is consumer ignorance in knowing that such repair options are available to them.
However, expect Apple to better inform their new iPhone customers of the changes.
For those in the know, users of cracked screens will be faced with much cheaper and convenient repair options.
Referrals from the Apple Store to 3rd party repair shops will be greatly reduced or eliminated.
All a part of the close-loop eco system that everyone from Apple to the big box retailers have been implementing the past few years: Everything under one roof and don’t leave anything on the table.
Repair shops will see less of the newest models but the growing used smartphone industry on prepaid leaves 3rd party repair shops as the #1 place for cracked screen repairs.
Weigh In:
What are your thoughts?
How will these changes from Apple affect 3rd party repair shops?
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