Apple AAPL is expanding its Independent Repair Provider (IRP) program to supply repair parts, tools and manuals for iPhones to more businesses across the United States. The program will also be opening its third-party iPhone repair program to independent repair shops in Canada and 32 countries across Europe, including the United Kingdom.
Considering precautionary measures against COVID-19, Apple has been working with its partners to offer additional mail-in repair options and supporting the network in ways that meet health and safety guidelines. Additionally, the iPhone-maker is also creating an online tool to verify whether an independent shop participates in its program.
The IRP program gives iPhone owners an additional third-party channel for repairs. To qualify for the program, which is free to join, businesses are required to have an Apple-certified technician on staff. Businesses in the program have access to free training from Apple, as well as the same genuine parts, tools, repair manuals, and diagnostics as Apple Authorized Service Providers (AASPs) and Apple Store locations.
Apple Inc. Price and Consensus
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Need for Program Expansion
Apple began the program last year in the United States after years of lobbying against state-level Right to Repair bills that would have compelled it to provide parts to independent shops. The company had activated a dormant software lock on the iPhone's battery, hindering third-party battery replacements.
The company has long maintained a network of authorized service providers such as Best Buy to perform warranty work but smaller shops had complained that the program was too costly to join because of high volume commitments, leaving them without access to genuine Apple parts or the software tools needed to perform some repairs.
Apple’s use of specific and expensive parts, including Touch ID sensors, display replacements and battery mounting make it difficult to use an alternative. However, lack of availability of Apple’s genuine parts for local repair work has increased demand for third- party components and repairs, which can affect device functionality.
Notably, access to genuine repair agents has become an increasingly important consideration for customers who are holding onto their devices for longer periods. This is partly because of the high cost of new devices.
Moreover, discarded devices may not be recycled properly, contributing to a growing e-waste management crisis and increasing demand for rare metals that are required for the manufacturing of new handsets. Independent shops under the program are suggested to inform customers whether they use genuine Apple parts for repair and send any salvaged Apple parts back to the company, where they can be either refurbished or recycled.
In a bid to tackle the situation, Apple added Best Buy to its list of authorized service providers earlier in 2019, expanding its services to over 1,000 stores. This count includes Apple retail outlets, certified shops, Best Buy, and the 700-plus independent providers it has greenlighted so far. Another 140 U.S. repair businesses are awaiting approval. The company currently has more than 5,000 approved repair locations.
Zacks Rank & Stocks to Consider
Apple currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Silicon Motion Technology Corporation SIMO, sporting a Zacks Rank #1 (Strong Buy), and Synaptics Incorporated SYNA and Sapiens International Corporation N.V. SPNS, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Silicon Motion Technology, Synaptics and Sapiens International is currently pegged at 7%, 10% and 5%, respectively.
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