IPod repair businesses growing quickly

Critics complain that the music players aren't sturdy

MIAMI -- Since the iPod made its debut in 2001, Gregg Radell has used five of the music and video players. He lost one, another broke, a third ran out of storage space, and he decided to replace the fourth. Each time, he bought a newer model.

Sensing there was a market in refurbishing rather than replacing the devices, the Miami businessman started PodSwap.com about 18 months ago. The company allows customers to credit the value of used iPods -- even if they're broken -- toward new or repaired ones. Customers can also trade in their iPod for its cash value. Podswap.com has already handled 5,000 iPods, Radell said.

Radell said there is such a high demand, he limits his advertising on Google. "We can get 1,500 inquiries over the weekend," he said.

In the booming online iPod repair business, PodSwap is a small player. At least 12 companies operate in the market. One, iPodMods.com, fixes roughly 24,000 iPods a year. Another, iPodResQ.com, repairs up to 250 a day in a 15,000-square-foot warehouse in Olathe, Kan.

Brandon Jones, owner of BrokeniPods.com in Orem, Utah, is only 21, yet a year and a half after starting his business, he fixes between 200 and 400 iPods a month. Only now is he drawing up a business plan. He said the average price of a repair is $100.

Firms that previously fixed other computer parts have also entered the industry, and iPod repairs now make up the majority of their business.

Analysts and repair shop managers said the industry is growing because iPods are easy to break and tough to repair. It helps that iPod's maker, Apple Computer, is reluctant to repair broken players, they say.

Radell said "the single weakest link" is the iPod's hard drive. "When they're being carried around and being tossed up and down, they go through such a variety of environments that I think the hard drive has a tendency to fail," he said.

The newest iPod, the Nano, avoids that criticism because it has flash-based memory rather than a hard drive. It's about the size of a credit card and is prone to breakage, Radell said. Then there's the battery, which is difficult for a user to replace without help.

"It's the Corvette and not the tank," said Aaron Vronko, business manager at iPodMods in Kalamazoo, Mich., which has grown from two to 12 employees in just over two years.

Several groups have sued Apple, alleging the device is defective. Last August, Apple settled a class-action lawsuit in which plaintiffs claimed Apple had misrepresented the durability of iPod batteries. Another class-action lawsuit is pending in Los Angeles, charging that the screen of the new iPod Nano breaks or scratches with regular use.

"Some people have scratched screens, other people have [broken screens] ... and that's just from putting it in your pocket," said Harvey Rosenfield, president of The Foundation for Taxpayer & Consumer Rights in Santa Monica, Calif., which is suing Apple over the Nano. "This is not a throwaway camera. ... These are a sophisticated piece of electronic equipment that people will assume will last a long, long time."

But several analysts said the problems have more to do with the popularity of the iPod and the tendency of users to abuse them than with Apple's manufacturing.

Bob O'Donnell, a vice president at technology research firm IDC, said, "Any time you have that many of anything," some will not function properly.

Fifteen percent of iPods will fail within one year, estimates Rob Enderle, principal analyst at the Enderle Group in San Jose, Calif. He said that's comparable to other small electronic devices, such as cell phones. But, he said, cell phones are much easier and less costly to repair.

Apple spokeswoman Natalie Kerris said iPods have a failure rate of less than 5 percent, which she said is "fairly low" compared with other consumer electronics.

What bodes especially well for third-party repairers is Apple's warranty policy, Enderle said. All new iPods come with a one-year warranty, but the warranty does not cover damage caused by the user. Rosenfield said Apple charges a $29.95 shipping and handling fee on all warranty repairs performed six months after the date of purchase. After the warranty expires, Apple will replace an iPod for $249; a Nano for $189. If the problem is the battery, the price is lower.

"Apple's view is they want the customer to buy a new one on a regular basis," Enderle said.

But Kerris said Apple had been consistently recognized for its customer service, and iPod owners can get in-person help from the company.