Wednesday, November 20, 2019

Are Apple Repairs Profitable?

Matthew Gault (via Jason Koebler, MacRumors):

Tuesday, Kyle Andeer, Apple’s Vice President of Corporate Law, answered those questions. In its testimony, Apple repeatedly denied accusations it was making it hard for people to repair their own phones and protecting a virtual repair monopoly. But its answers often didn’t align with reality.


Safety obviously isn’t Apple’s primary concern. If it were, it’d provide easy access to training and manuals it claims would prevent injury.


Apple also seemed incapable of answering basic questions about the repair market it insists it must tightly control. When the Congressional committee asked Apple how many technicians it had, it claimed there were tens of thousands. When the Committee asked how much revenue Apple generated from repairs, Apple claimed that “For each year since 2009, the costs of providing repair services has exceeded the revenue generated by repairs.”

The idea that Apple is losing money on repair is wild, and a curse of its own making. The answer by Apple seems vague on purpose. Throughout the years, Apple has had to offer many “service programs” for defective products. Most notably, Apple has had to replace a large number of MacBook and MacBook Pro devices for free because it designed an unrepairable keyboard that breaks easily and with normal use. Rather than replacing a few keys on those devices, Apple has to replace half of the computer. If Apple is including warranty repairs and service program repairs in addition to standard retail repairs, well, then, it is quite simply misleading the public and Congress.

I wonder if AppleCare plans are counted in the revenue. I actually do think it’s possible that repairs are not profitable. But there’s also room for a lot of creative accounting, e.g. for the portions of retail stores dedicated to repair.


Update (2019-11-25): Chris Carr:

Apple repairs are not profitable. At least I’m pretty darned sure they weren’t when I was there. AppleCare (the organization) would be happy to just break even.

Update (2019-11-26): Kevin Purdy:

Apple answers the question we’ve been chasing for the last fifteen years, “Why prevent access to repair content?” with: Our content makes repairs safer and easier. Which is not only not an answer, it also seems to be a very solid reason to distribute parts and manuals. In Apple’s mind, there’s a straight line between untrained techs and unsafe repair, which is a dubious claim to be sure–but if they believe it, shouldn’t they be trying to prevent that danger, not exacerbate it?

The charitable view is that this close-to-the-vest practice can be chalked up to Apple’s obsession with vertical integration of the customer experience. But that hasn’t really panned out.


Apple’s answer is, essentially, no. In full: “Apple does not take any actions to block consumers from seeking out or using repair shops that offer a broader range of repairs than those offered by Apple’s authorized technicians. Customers are free to obtain repairs from any repair shop of their choice.”

Apple’s answer is false.

3 Comments RSS · Twitter

Apple is setting itself up for shareholder problems. Back in the day when Apple was spending excessive amounts for "renewable" energy sourcing, conservative shareholders tried pretty hard to make it bad for Apple. This is an exact opposite shoe/foot. In THIS case, Apple is effectively admitting that their design/engineering and repair procedures are not compelling to shareholder goals… if the repairs are SO costly that Apple is losing money, shareholders need to be asking "why?" Poor design choices leading to the mentioned "service programs" being costly is one thing, but at some point the environmentalist "wing" of Apple's shareholders need to really examine the side-effects of expensive repairs. Expensive parts on modern computers are typically NOT due to expensive constituent parts, they are due to questionably-engineered expensive "kits" or "assemblies". And those assemblies are expensive because Apple is manufacturing them with rivets, glues, and other processes that are NOT particularly recycling-friendly. For every expensive repair part there is an equally costly "bad" part to be discarded. Regardless of Apple's PR nonsense, there are entire CITIES in China choked with US electronics waste… that stuff just doesn't get recycled like Apple's team would like us to dream. At some point, and perhaps it is rapidly approaching, Apple's environmentally-conscious shareholders really need to hold the company to the vision, which is going to mean asking hard questions about their design and engineering with respect to actual reuse/repair/recycle values. Because their current ethos is just dishonest. And we just got the smoking gun on repair.

Remember those schemes when people in China pull out all parts from phones, then replaced it with some stuff so it will get an exact weight as before, then went to an Apple Store to get a replacement? Fraudsters then went to resell the phones on the black market. I heard some AASP in my country offer (for a small fee) to do something to your device so it will be eligible to be replaced from Apple for free. I think those schemes are most likely the reason (or at least one of the reasons) why Apple is claiming that they are loosing money on the repairs. Apple's products are very popular and some people are always trying to outsmart the system.

When a battery cost $5, and at Apple scale you can bet they dont paid anywhere near that amount of money, there is no way that a $70 repair does not make any Net profits.

I wish they didn't said this in court, and this isn't the first time Apple caught blatantly lying, in the Qualcomm cases as well as this one.

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