Within the last year I’ve started repairing smartphones and other portable devices. It’s been an interesting battle learning the types of items to inventory and new processes. The biggest challenge I’m having to overcome is learning how to price jobs according to a device’s current value.
Laptops and computers are easy, most people purchase a computer and are willing to invest a few bucks into repairs like virus removals and hard drives. Customers spend upwards of $1,000.00 on a computer so it’s an easy choice to spend a few hundred on certain repairs. I figured phones would be similar.
Mobile devices, specifically smartphones, do follow a similar model with one caveat. Rather than making a decision to repair a computer the customer owns outright, they’re almost forced to repair a phone. The majority of cell phones are financed so in essence they’re not owned by the customer.
My phone is financed through my carrier and because of that I can’t finance another until this one is paid in full. My phone retails for somewhere around $750.00 which will take two years to pay in full. What happens if the phone gets damaged?
Without insurance I’m required to pay for the repair out of pocket if I want to keep using the device. Cracked screens, a common repair, can cost as much as the phone’s value. Between parts and labor a smartphone screen can be several hundred dollars.
Depreciation of phones happens immediately after the phone is unboxed. The $750.00 phone I bought three months ago is now worth $500.00 even though I may owe $600.00. If I were to pay for the repair the total would be somewhere around $450.00. Unlike the phone itself, the repair prices don’t depreciate which means at some point the repair will be more than the phone.
In the past year I’ve heard similar stories from customers. They’re forced to either break contract or repair. Most customers with broken cell phones reluctantly make the decision to repair because of the contract. Worse yet, many feel their phone is still worth what they paid.
I’m a businessman and a realest who understands some things simply aren’t worth repairing. Many times when a customer is making the decision to repair or replace I’ll open eBay and show them the current value of their phone. After seeing the depreciated value of their phone many opt for repair.
I’ve repeatedly heard customers tell me they understand their phone is worth less than the fix, but because they’re upside down in payments the repair still costs less. Due to the nature of how the cell phone industry works, we’re not forced to cough up all the money at once for our phone. Although convenient for us, it’s great for the carrier because it forces us into a contract.
The crux of the situation is phone technology is changing at breakneck speeds compared to other technologies. Months after one phone is unveiled another is introduced in continuous succession so the previous model is virtually worthless even though it’s still being paid.
Carriers are becoming more transparent with their contracts and policies which makes how we finance much easier to see. However, carriers are still financing very expensive devices which depreciate. Insurance for phones is something I strongly advocate because of the high cost of repair versus value. One commonly overlooked option is to simply buy an already depreciated phone and activate with your carrier while paying off the one that’s broken.
(Jeromy Patriquin is the President of Laptop & Computer Repair, Inc. located at 509 Main St. in Gardner. You can call him at (978) 919-8059 or visit www.LocalComputerWiz.com.)