The Cell Phone Repair Industry. Answering the Call of the Rapidly Expanding Mobile Repair Business
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1 Answering the Call of the Rapidly Expanding Mobile Repair Business
2 Industry Overview As workplace dynamics evolve and competition stiffens, the demand for faster and more dynamic response increases. As a result the use of handheld devices such as smartphones and tablets has grown exponentially, leading to increased productivity, efficiency, and accuracy. And, the mobile trend has invaded our personal lives as well, with 75% of the world having access to a mobile phone, according to The World Bank. 1 Cell phones and mobile devices have become pervasive in American society, shifting from a luxury item to one of necessity and creating the expectation for instantaneous and constant communication. With smartphones holding fast to their continued growth in the workplace and at home, a new market has emerged: the mobile phone repair industry. The growth of this new business vertical is in direct response to the continued popularity and growing reliance on expensive damage-prone smartphones and tablets. The cell phone repair industry is primarily segmented into the following major groups: screen repair, water damage repair, battery replacement, cosmetic damage repair, and other functional repair services. 2 Although still relatively new to the market, the cell phone repair industry has experienced strong growth over the last 10 years as smartphone and data usage have continued to increase. According to IBISWorld Industry Analyst Sarah Kahn, The rising popularity of expensive damage-prone smartphones gave the industry a significant boost. Consequently, industry revenue was forecasted to rise at an average annual rate of 4.9% to total $1.4 billion by year-end According to Forrester, a leading research and data firm, the market is booming as the more than 185 million Americans who own a smartphone look to save money by repairing their devices instead of replacing them. Smartphones are more expensive than basic-feature phones, and to replace them is a costly proposition that consumers are happy to avoid. Therefore, these devices are more likely to be repaired rather than replaced. And, because of their design (fragile LCD touchscreens, inaccessible batteries, and other breakable parts), these devices are highly susceptible to repair. According to IBISWorld, the nation s most trusted independent source of industry and market research, smartphones currently represent more than two-thirds of all mobile phone sales and half of all mobile phone users. Rapid market acceptance of smartphones has created a need for more cell phone repair shops to keep up with this growing market. IBISWorld also reported that in 2012, smartphone penetration exceeded 100%, only five years after the release of Apple's iphone. As a result, during the five years leading up to 2014, the number of cell phone repair shops has grown at an average rate of 5.8% per year to its current 2,609 locations. 4 1
3 The On Cell Phone and Tablet Repair Statistics The numbers don t lie. The growing trend of smartphone and tablet users is to seek out the lower-cost repair alternative when their devices are damaged. 5 The Business Landscape SquareTrade, the top-rated protection plan trusted by millions of happy customers, today released the results of a new study showing that damaged iphones have cost Americans $10.7 billion since their introduction in The total amount Americans have spent on repair and replacement of their smartphones in the last seven years including iphones is over $23.5B, the study found. 6 Surveying more than 2,400 smartphone users, the sum combines the cost of repairs, replacements and insurance deductibles for cracked, dropped, submerged, and water-damaged devices. Regardless of the type of accident, the most common lasting damage for users is the now commonplace cracked screen. A quarter of iphone owners have cracked a screen at some point, with 15% currently using an iphone with a cracked screen. 2
4 The cell phone repair companies have built a $1 billion business, repairing and refurbishing smartphones and other mobile devices for consumers looking for a less expensive alternative to upgrading. There s less and less difference between a new smartphone and one from a couple of years ago, so people feel less need to upgrade, says Benedict Evans, an analyst with Enders Analysis. As penetration grows, more and more smartphone owners have lower incomes and aren t keen to drop $200 on the latest thing every two years. And, there seems to be a growing interest in repairing devices over upgrading because it s a more environmentally responsible option. By repairing devices consumers make a positive environmental impact, decreasing the mining of minerals used to make components, energy spent to manufacture and ship devices, and waste once the products are thrown away. 7 How Many Devices Do You Carry? The average person carries 2.9 devices The smartphone is by far the most popular device carried......and the ereader is the least popular DEVICES BY POPULARITY Smartphone 85% Laptop 65% Tablet 48% MP3 Player 40% ereader 29%
5 The Product Response As the cell phone repair industry continues to develop and evolve, so too have their services and product offerings. To illustrate this point, here is a list of the current Staymobile products: Mobile Device Repair Services Warranty and Device Protection Solutions Mobile Device Management Services Data and Identity Protection Mobile Security & Management for Apps/ Devices Annual Maintenance Services Available for K-12 & B2B Child Safety & Protection App Launch Lifetime Warranty On All Services These products are available and customizable to consumers, businesses, and educational institutions, providing three distinct revenue categories. The Opportunity Until recently it was nearly impossible to find a business that could repair a broken cell phone or other electronic device. Repair wasn t really an option, so consumers were forced to buy new products to replace the damaged ones. That is no longer the case, and consumers are taking full advantage. In fact, the cell phone repair industry is booming. The growth rate of cell phone users and small electronic devices needing repairs has nicely set the stage for continued industry expansion and for business entrepreneurs to also take full advantage. There are three primary factors influencing the industry: growing use of and reliance on smartphones and other personal electronic devices, advancements in technology, and a highly fragmented market. The industry is waiting for a leader like Staymobile to break away from the pack, and work is underway for the company to do just that. Often-fragile smartphones have been a source of revenue growth for the industry, according to IBIS World reporting. 8 The report asserts that the cellphone repair industry will obtain a significant boost yet because of the growing demand of smartphones to reach a staggering $1.4 billion in industry revenue. And, the future looks bright, with positive forecasts projected for the next five years. However, should we ever see the saturation of smartphones, keep in mind that that does not equate to fewer broken smartphones. As long as these devices continue to be used, they will continue to break. This creates a secure business niche now and in the future. 4
6 The Staymobile Difference Staymobile began in 2009 as true pioneers of this new mobile repair business vertical. A lot has changed since then with regard to technological innovations, but Staymobile has continued to adapt and thrive. We currently have 15 locations around the country, with projections to increase that count to around 100 by the end of 2015, shared David Fromal, Senior Vice President of Development. The market and Staymobile s presence in it are both taking off. The company credits its continued growth to its strategic forward thinking. According to Staymobile President and COO, Chuck Morrison, We make a conscious effort to always put our focus on ways we can improve what we do and how we can deliver enhanced products and services to our customers. That s what gives our brand its staying power. It is this thinking that has enabled Staymobile to develop and maintain a streamlined, efficient, and cost-effective franchise model that delivers returns for franchisees. It s also the secret to their loyal customers. It s also fueling their rapid geographical expansion and strategic partnerships. Staymobile s certified technicians are another differentiator. Each technician undergoes a comprehensive six-week training with intensive repair oversight and testing along with data privacy and consumer protection instruction. And, because Staymobile is so confident in the work their technicians do, they offer a lifetime warranty on all repairs. That s an important differentiator and unparalleled customer service that really make a difference for franchisees and customers. Another way Staymobile sets itself apart from the competition is by offering the latest accessories from all the leading brands along with their comprehensive 360 device protection plans. Staymobile has also successfully tapped into the education, civic, and corporate markets, which opens up a much broader revenue potential for franchisees. As the cell phone repair industry continues to grow and change, Staymobile is committed to doing the same. The company has the infrastructure to continue to lead the market through expert repairs, industry-setting customer service, and innovative strategic partnerships. No matter where new technologies take us, Staymobile will be there to lead the way. 5
7 For more information and to learn more please contact: David Fromal Executive Vice President, Franchise Development STAYMOBILE (O) (M) franchise.staymobile.com 1 World Bank, Mobile Phone Access Reaches Three Quarters of Planet's Population, July 17, 2012; 2 IBISWorld, The Cell Phone Repair Market Research" report, February 2015; 3 IbisWorld, press release Cell Phone Repair in the US Industry Market Research Report, March 20, 2013; 4 IbisWorld, press release Cell Phone Repair in the US Industry Market Research Report from IBISWorld, March 20, 2013; 5 Studies conducted on behalf of Squaretrade by Bloomberg, August 14, 2014 and Deloitte Mobile Consumer Survey, July 2013; 6 Square Trade, New Study Shows Damaged iphones Cost Americans $10.7 Billion, $4.8B in the Last Two Years Alone, September 18, 2014; 7 Bloomberg Business, Repairing Damaged iphones With No Help From Apple, by Adam Satariano, September 05, 2013; 8 The Cell Phone Repair market research report conducted by market research firm IBISWorld, February 2015;
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