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Companies in Apple’s repair program say they can’t compete with tech giant

56 points by clouddrover 3y ago

Spivak 3y ago
"God why is Apple gouging customers with high repair prices." Apple: "Uhh… we're actually eating most of cost by making rent from device sales and shipping parts through the same chain the phones go through so if you tried to buy them retail it wou... uhh guys?" Furiously typing, "Apple is using their monopoly power to screw over local repair shops."
- Jiro 3y ago
  Apple would say that regardless of whether it's true, and there's no way to audit Apple to confirm it, so it provides no useful information. This is just a longer version of "Apple said to trust itself".
- IntelMiner 3y ago
  Where did Apple say any of that? And how do you know it's true?
- Prickle 3y ago
  Except that there is a mountain of evidence that shows none of Apple's parts are nearly as expensive as the retail price. If I remember correctly, the Iphone 13 Pro costed an estimated $570 USD build, with a retail sale cost of $1,099 USD. Of course, the same can probably(?) be said about the phones produced by competitors such as Samsung, with the Galaxy. Point being, Apple has always marked their garbage up by anywhere from ~150% to 200% of the actual build price. There is no reason to trust Apple's pricing for spare parts. Especially when previously, these same repair stores went by the back door to get these parts directly from the factories in China.
  - sbuk 3y ago
    Build cost != cost to manufacture. They, nor anyone else, are not marking "their garbage up by anywhere from ~150% to 200% and distribute. of the actual build price." That is simply not how manufacturing works. Every step of the supply chain has costs; labour and raw materials for example. Then there are land costs, taxes, services (power, water, machinery, et.) and distribution. Then there is R&D to account for; software needs to be developed, for instance. Their actual markup is around the 30% mark.
    - Prickle 3y ago
      That's fair. I did completely omit the R&D costs. I did some basic research again (last comment was on the toilet) and everything I am finding says that Apple's Iphone margins are sitting at around 40%. Either way, I can't afford one if I can't replace parts at cost.
      - lotsofpulp 3y ago
        There is almost no way anyone outside of high level Apple executives that would be privy to their estimates for margins on individual iPhones including R&D and other costs. Especially because a lot of Apple products' value proposition comes from the ecosystem of their services, including the ability to visit a retail store and talk to a W-2 employee of Apple (which sets them quite apart from basically every other electronics brand). You can see their overall profit margin though, which they keep around 25%: https://www.macrotrends.net/stocks/charts/AAPL/apple/profit-margins https://www.macrotrends.net/stocks/charts/AAPL/apple/profit-...
  - CPLX 3y ago
    Wait until you see the spread between parts cost and retail on a grilled cheese sandwich.
- circuit10 3y ago
  Then why are they explicitly blocking repairs? Serialising parts so they won’t work properly until Apple approves the device/part combination, gluing in components, blocking the parts manufacturers from selling to anyone but Apple…
- ChoHag 3y ago
  [dead]
deafpolygon 3y ago
This is probably intentional - now that they've allowed repairing of your own devices (allowed is a bit too generous, more like strong-armed into allowing). So, they do the next-best thing... make it expensive to do self-repair (via parts cost) and cheaper to offer repairs. It's win-win. They come out on top looking good ("Oh look, we're absorbing some of the cost for repairs.") and consumers lose out. The net effect is that repair shops will also find it costly to repair.
- genocidicbunny 3y ago
  If I recall correctly, this is pretty much exactly the strategy that Louis Rossmann was calling out when Apple first started their 'repair' program. He was right.
  - prmoustache 3y ago
    Bottom line is we should mandate in the law that if you sell a product, you need to provide specs and schematics of all parts it consists of so that third parties can build and sell replacement parts of same spec and quality.
    - ajsnigrutin 3y ago
      I'd be happy if the chip manufacturer was allowed to sell me the same chip at all. There are chips, made specifically for apple, that are far from any secret/nda stuff, since there are billions around in peoples pockets, but the manufacturer is not allowed to sell them to consumers. Louis Rossmann mentioned this too, where he has to buy an apple powerbank, to remove one chip (charge controller?) to fix an iphone, and then throw away the rest of the powerbank, because the manufacturer is not allowed to sell him a chip worth a few cents.
  - b1daly 3y ago
    I’ve never understood his crankiness on this subject: the concept of ‘right to repair’ is entirely synthetic. Government intervention in markets is usually predicated on some kind of ‘market failure’ and I don’t see how that is the case here. There is plenty of competition in the phone market and if the option to have a phone repaired by third parties was really desired by consumers then someone would sell such a phone. It seems more like Rossmann is angry there is not a product-market fit for his services. Something like that.
ClumsyPilot 3y ago
Either you can repair it, or it's not your property. So effectively we are gradually abolishing private proterty.
- deleted 3y ago
  [deleted]
- pocketarc 3y ago
  I see where you're coming from, but it might be worth considering that it being your property doesn't imply that you can repair it. I bought a CPU, I own it, it's my property, and if it somehow broke, I am completely unable to repair it. But that's immaterial, because as the article mentions, you -are- able to repair it. There's just not enough of a market for third-party repair shops, when they're competing with Apple offering the same service. Of course it'd be nice if repairs were cheaper, who wouldn't want that? But the cost of repair doesn't define whether something is your property or not.
  - circuit10 3y ago
    But Apple are trying the make sure you can’t repair things except through them, or through one of their “authorised” providers which means they are only allowed to do a few types of repairs and there’s no price competition because they have to buy all of their parts from Apple. They do part serialisation, meaning that the parts have some kind of encryption key/serial number so that they won’t work properly until Apple pairs them.
  - eimrine 3y ago
    But you can repair some laptop with it. If the cpu and the laptop is not from Apple.
    - qwytw 3y ago
      Are there even any mass-produced laptops with replaceable CPUs left?
      - 3y ago
ChemSpider 3y ago
There should be a law forcing tech companies to sell spare parts at cost + 20% markup. Heck, these companies could even simply use Amazon for handling the logistics of it. Some companies like Bosch Home Appliances actually sell spare parts in their own online store at very reasonable prices - so it is doable.
- senttoschool 3y ago
  >There should be a law forcing tech companies to sell spare parts at cost + 20% markup. Why stop there? Maybe force tech companies to sell their products and services at cost + 20% markup. /sarcasm 1. What happens if the company has too many spare parts and wants to sell at 0% markup? Can they do that? 2. What happens if the spare parts factory burns down in an accident? Is the company legally obligated to rebuild the factory? What are the terms for how fast must the company rebuild the factory? Does the company need a backup factory to produce spare parts? 3. How long should the company be obligated to provide spare parts? Should this duration be applied to all electronics?
- ajsnigrutin 3y ago
  Yep, and all parts that can be bough separately should be sold too (so at a chip level, not just "mainboard", "screen assembly", "case", etc.). Same with cars and other devices... with a car, you can get in a minor crash and even without labour, you can get up to a new car price in parts very fast.
  - amelius 3y ago
    But then people would build competing phones with M2 chips in them.
    - Xelynega 3y ago
      Oh no, the whole point of the free market...
      - senttoschool 3y ago
tinus_hn 3y ago
Apparently Apple can’t compete with these independent repair companies either, because Apple only barely offers repair services. For iPhones they offer only three options: replace the battery, replace the screen and replace the phone.
- millzlane 3y ago
  Depends on the repair but much more of the phone is replaceable that before. Albiet not user replaceable without paying a little extra to rent the tools.
churchill 3y ago
I hate to say this, but I won't fault Apple's decision to do this. If you think they're abusing their market power, vote with your wallet: stop buying Apple. If you still choose to buy their products despite this 'abuse' then you're indirectly saying that it's a net positive for you & that you don't mind.
- _piif 3y ago
  Not particularly easy when they're the only ones who have even the slightest bit of respect for the privacy of their users in the mobile market. The other choices that come to my mind are either: - Normal Google Android, which is just spyware - Android but without any GApps, which barely runs anything relevant - Android with either MicroG / sandboxed Play Services, which AFAIK breaks Google's ToS and is at the mercy of them not breaking those - GNU/Linux phones, which I can not in good conscience call primary daily-driver ready - Dumb phones I guess? Doesn't leave us with many options. At this point it's choosing the lesser of two evils.

56 points by clouddrover 3y ago

"God why is Apple gouging customers with high repair prices." Apple: "Uhh… we're actually eating most of cost by making rent from device sales and shipping parts through the same chain the phones go through so if you tried to buy them retail it wou... uhh guys?" Furiously typing, "Apple is using their monopoly power to screw over local repair shops."

Jiro 3y ago
Apple would say that regardless of whether it's true, and there's no way to audit Apple to confirm it, so it provides no useful information. This is just a longer version of "Apple said to trust itself".
IntelMiner 3y ago
Where did Apple say any of that? And how do you know it's true?
Prickle 3y ago
Except that there is a mountain of evidence that shows none of Apple's parts are nearly as expensive as the retail price. If I remember correctly, the Iphone 13 Pro costed an estimated $570 USD build, with a retail sale cost of $1,099 USD. Of course, the same can probably(?) be said about the phones produced by competitors such as Samsung, with the Galaxy. Point being, Apple has always marked their garbage up by anywhere from ~150% to 200% of the actual build price. There is no reason to trust Apple's pricing for spare parts. Especially when previously, these same repair stores went by the back door to get these parts directly from the factories in China.
- sbuk 3y ago
  Build cost != cost to manufacture. They, nor anyone else, are not marking "their garbage up by anywhere from ~150% to 200% and distribute. of the actual build price." That is simply not how manufacturing works. Every step of the supply chain has costs; labour and raw materials for example. Then there are land costs, taxes, services (power, water, machinery, et.) and distribution. Then there is R&D to account for; software needs to be developed, for instance. Their actual markup is around the 30% mark.
  - Prickle 3y ago
    That's fair. I did completely omit the R&D costs. I did some basic research again (last comment was on the toilet) and everything I am finding says that Apple's Iphone margins are sitting at around 40%. Either way, I can't afford one if I can't replace parts at cost.
    - lotsofpulp 3y ago
      There is almost no way anyone outside of high level Apple executives that would be privy to their estimates for margins on individual iPhones including R&D and other costs. Especially because a lot of Apple products' value proposition comes from the ecosystem of their services, including the ability to visit a retail store and talk to a W-2 employee of Apple (which sets them quite apart from basically every other electronics brand). You can see their overall profit margin though, which they keep around 25%: https://www.macrotrends.net/stocks/charts/AAPL/apple/profit-margins https://www.macrotrends.net/stocks/charts/AAPL/apple/profit-...
- CPLX 3y ago
  Wait until you see the spread between parts cost and retail on a grilled cheese sandwich.
circuit10 3y ago
Then why are they explicitly blocking repairs? Serialising parts so they won’t work properly until Apple approves the device/part combination, gluing in components, blocking the parts manufacturers from selling to anyone but Apple…
ChoHag 3y ago
[dead]

deafpolygon 3y ago

This is probably intentional - now that they've allowed repairing of your own devices (allowed is a bit too generous, more like strong-armed into allowing). So, they do the next-best thing... make it expensive to do self-repair (via parts cost) and cheaper to offer repairs. It's win-win. They come out on top looking good ("Oh look, we're absorbing some of the cost for repairs.") and consumers lose out. The net effect is that repair shops will also find it costly to repair.

genocidicbunny 3y ago
If I recall correctly, this is pretty much exactly the strategy that Louis Rossmann was calling out when Apple first started their 'repair' program. He was right.
- prmoustache 3y ago
  Bottom line is we should mandate in the law that if you sell a product, you need to provide specs and schematics of all parts it consists of so that third parties can build and sell replacement parts of same spec and quality.
  - ajsnigrutin 3y ago
    I'd be happy if the chip manufacturer was allowed to sell me the same chip at all. There are chips, made specifically for apple, that are far from any secret/nda stuff, since there are billions around in peoples pockets, but the manufacturer is not allowed to sell them to consumers. Louis Rossmann mentioned this too, where he has to buy an apple powerbank, to remove one chip (charge controller?) to fix an iphone, and then throw away the rest of the powerbank, because the manufacturer is not allowed to sell him a chip worth a few cents.
- b1daly 3y ago
  I’ve never understood his crankiness on this subject: the concept of ‘right to repair’ is entirely synthetic. Government intervention in markets is usually predicated on some kind of ‘market failure’ and I don’t see how that is the case here. There is plenty of competition in the phone market and if the option to have a phone repaired by third parties was really desired by consumers then someone would sell such a phone. It seems more like Rossmann is angry there is not a product-market fit for his services. Something like that.

ClumsyPilot 3y ago

Either you can repair it, or it's not your property. So effectively we are gradually abolishing private proterty.

deleted 3y ago
[deleted]
pocketarc 3y ago
I see where you're coming from, but it might be worth considering that it being your property doesn't imply that you can repair it. I bought a CPU, I own it, it's my property, and if it somehow broke, I am completely unable to repair it. But that's immaterial, because as the article mentions, you -are- able to repair it. There's just not enough of a market for third-party repair shops, when they're competing with Apple offering the same service. Of course it'd be nice if repairs were cheaper, who wouldn't want that? But the cost of repair doesn't define whether something is your property or not.
- circuit10 3y ago
  But Apple are trying the make sure you can’t repair things except through them, or through one of their “authorised” providers which means they are only allowed to do a few types of repairs and there’s no price competition because they have to buy all of their parts from Apple. They do part serialisation, meaning that the parts have some kind of encryption key/serial number so that they won’t work properly until Apple pairs them.
- eimrine 3y ago
  But you can repair some laptop with it. If the cpu and the laptop is not from Apple.
  - qwytw 3y ago
    Are there even any mass-produced laptops with replaceable CPUs left?
    - 3y ago

ChemSpider 3y ago

There should be a law forcing tech companies to sell spare parts at cost + 20% markup. Heck, these companies could even simply use Amazon for handling the logistics of it. Some companies like Bosch Home Appliances actually sell spare parts in their own online store at very reasonable prices - so it is doable.

senttoschool 3y ago
>There should be a law forcing tech companies to sell spare parts at cost + 20% markup. Why stop there? Maybe force tech companies to sell their products and services at cost + 20% markup. /sarcasm 1. What happens if the company has too many spare parts and wants to sell at 0% markup? Can they do that? 2. What happens if the spare parts factory burns down in an accident? Is the company legally obligated to rebuild the factory? What are the terms for how fast must the company rebuild the factory? Does the company need a backup factory to produce spare parts? 3. How long should the company be obligated to provide spare parts? Should this duration be applied to all electronics?
ajsnigrutin 3y ago
Yep, and all parts that can be bough separately should be sold too (so at a chip level, not just "mainboard", "screen assembly", "case", etc.). Same with cars and other devices... with a car, you can get in a minor crash and even without labour, you can get up to a new car price in parts very fast.
- amelius 3y ago
  But then people would build competing phones with M2 chips in them.
  - Xelynega 3y ago
    Oh no, the whole point of the free market...
    - senttoschool 3y ago

tinus_hn 3y ago

Apparently Apple can’t compete with these independent repair companies either, because Apple only barely offers repair services. For iPhones they offer only three options: replace the battery, replace the screen and replace the phone.

millzlane 3y ago
Depends on the repair but much more of the phone is replaceable that before. Albiet not user replaceable without paying a little extra to rent the tools.

churchill 3y ago

I hate to say this, but I won't fault Apple's decision to do this. If you think they're abusing their market power, vote with your wallet: stop buying Apple. If you still choose to buy their products despite this 'abuse' then you're indirectly saying that it's a net positive for you & that you don't mind.

_piif 3y ago
Not particularly easy when they're the only ones who have even the slightest bit of respect for the privacy of their users in the mobile market. The other choices that come to my mind are either: - Normal Google Android, which is just spyware - Android but without any GApps, which barely runs anything relevant - Android with either MicroG / sandboxed Play Services, which AFAIK breaks Google's ToS and is at the mercy of them not breaking those - GNU/Linux phones, which I can not in good conscience call primary daily-driver ready - Dumb phones I guess? Doesn't leave us with many options. At this point it's choosing the lesser of two evils.