[MAC] Inside the iPhone Repair Ecosystem: Where Do Replacement Parts Come From and Can You Trust Them?

[Jesus Cea]

Inside the iPhone Repair Ecosystem: Where Do Replacement Parts Come From
and Can You Trust Them?

<https://www.macrumors.com/2018/08/14/inside-the-iphone-repair-ecosystem/>

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"""
Inside the iPhone Repair Ecosystem: Where Do Replacement Parts Come From
and Can You Trust Them?
Tuesday August 14, 2018 11:58 am PDT by Juli Clover
There's a thriving market for unofficial, aftermarket iPhone parts, and
in China, there are entire massive factories that are dedicated to
producing these components for repair shops unable to get ahold of parts
that have been produced by Apple.

The entire Apple device repair ecosystem is fascinating, complex, and
oftentimes confusing to consumers given the disconnect between Apple,
Apple Authorized Service Providers, third-party factories, and
independent repair shops, so we thought we'd delve into the complicated
world of Apple repairs.

The Aftermarket Factories

Our exploration of the repair ecosystem was inspired by a video sent to
us by a trusted source that MacRumors has worked with in the past, who
captured footage inside one of the many facilities in China that are
dedicated to creating aftermarket iPhone parts.

This is a small scale operation where workers appear to be creating an
aftermarket touch screen digitizer for the iPhone, a thin plastic
component that attaches to the LCD through a flex cable and allows
physical touch on the screen to be transformed into digital input,
allowing the iPhone's processor to translate your touch into system
commands.


In addition to producing touch screen digitizers for the iPhone, given
the clean room setup, the facility pictured in the video likely also
attaches them to LCDs sourced from other factories to produce a full
iPhone display assembly that can then be sold to iPhone repair shops
around the world.

While this is a small facility, our source tells us that the factory,
which employs approximately 10 people, is able to produce up to 10,000
display components per month, with setup and equipment for a factory
this size costing approximately $90,000, a minor investment for a major
return.

iPhone X display assembly with touch screen digitizer visible, via iFixit

Larger factories, such as those that produce aftermarket LCDs for
iPhones and other smartphones, are huge operations that can output
millions of components per month. Companies like Tianma, Longteng LCD,
Shenchao, and JingDongFang are well-known in the repair world for
producing the aftermarket LCDs used by many repair shops. If you search
for display components on auction sites like Alibaba, these are the
names that pop up over and over again.

These are not small, no name factories producing LCDs - these are major
operations creating components by the millions, which should give you an
idea of the kind of demand there is for aftermarket components across
the globe. It costs hundreds of millions of dollars to purchase the kind
of equipment needed to produce aftermarket LCDs.

"It's a crazy industry that involves millions of dollars, probably into
billions a year. It's just absolutely nuts," said our source.

The Demand for Aftermarket Parts

Companies that produce aftermarket LCD components are doing so because
there's significant demand for these parts in repair shops around the
world. Shops that are not Apple Authorized Service Providers are not
able to source parts from Apple because Apple limits OEM parts to the
repair shops that it partners with.

With no way to purchase components from Apple, sourcing parts from
third-party suppliers is the only option for independent repair shops
that want to be able to offer iPhone repairs to their customers.

There are more than 15,000 independent repair shops in the United
States, all of which are sourcing components from suppliers that receive
them mainly from these factories in China. In the South Bay Area alone,
where Apple's Cupertino headquarters is located, there are hundreds of
non-AASP locations that can fix a broken iPhone. And that's just the
United States. There are thousands more independent repair shops around
the world.

An independent iPhone repair shop near Cupertino, California

Aftermarket Parts Quality

When thinking of third-party components, you might assume that the parts
produced in facilities like the one in the video are far inferior in
quality to actual Apple components, which is also the viewpoint of the
source that sent us the video.

    [The Chinese factories] are basically dishing junk out into the
world. Apple's own screen may fail only if you've dropped it. Won't even
fail up to 5, 10 years. But the fake screens usually fail between two to
three years. Usually.

That's not always entirely true, though, according to many of the repair
shops that we spoke with.


Kyle Wiens, who runs repair site and store iFixit, says there's a wide
range in quality when it comes to third-party components. Some are
"total crap" and are inferior to what Apple produces, but other
components are a fairly close match. "Not quite as good as Apple," Wiens
says, "but close." Some components are "indistinguishable" from Apple
parts "unless you have Apple testing equipment."

An iPhone with an original display (right) and a replacement display
(left) via Disc Depot

That's a sentiment that was echoed by several other repair shops.
Mansoor Safi, who runs the iFixers repair shop in the Bay Area, said
there are generally four display grades: Premium, Grade A, Grade B, and
Grade C. iFixers, says Safi, uses "Premium" grade screens, which are
considered top tier aftermarket display replacements because the lower
grades are indeed rubbish.

"If you drop from premium, you will see day and night in terms of
responsiveness, color, quality, and how quickly it will break again,"
said Safi. "If I use anything Grade A, I'll get the same customer coming
back again, and it's an inconvenience for the customer to come back."

Even with what's considered one of the better aftermarket displays,
you're going to see differences between the repaired device and a
non-repaired device. We asked Safi what difference we'd see between a
standard iPhone 7 and an iPhone 7 that had been repaired with a
high-quality aftermarket display.

The repaired device, he said, might be 5 percent blueish or 5 percent
yellowish, depending on the display used, but it's not a disparity
noticeable without a reference point. "Unless you put the two phones
together, you won't see the difference," he said.

Apple components are superior, according to Safi, but for reasons that
include cost and time investment (some people need immediate repairs),
sometimes "close" is good enough.


Cupertino iPhone Repair's Laxmi Agrawal said that a lot of cheap,
low-quality LCDs coming out of China can have a multitude of problems:
poor polarization, broken 3D Touch, yellow screens, and bleeding of the
LCD when the frame isn't tight enough. "We don't use the Chinese LCDs,"
he said, and customers need to watch out for "bad tactics at a lot of
repair companies."

uBreakiFix co-founder Justin Wetherill says that the repairs done at his
shops around the country are "comparable to those of an AASP."

    Because we're diligent about where and how we're sourcing parts and
testing our components thoroughly, we are confident that our repairs are
comparable to those of an AASP. Our technicians are professionally
trained, and we have systems and processes in place to ensure we're
always doing right by the customer. We pride ourselves in customer
service and receive less than 1 customer escalation per day on average
across more than 425 stores and have a warranty rate of less than 2%.

Based on the number of repair shops we spoke to and the different
answers that we received, there is, unfortunately, no universal grading
system to work with. As Wiens says, it's a "completely free market where
there are no standards." And it's true -- there are no agreed upon
guidelines, there's no oversight from Apple, and there's no one who
regulates aftermarket part quality.

Jim from San Jose's Cellular Repair Center, for example, said that the
best quality screens are those that can be described as "original"
grade, and he didn't mention the Premium grading system we'd heard earlier.

    Strictly speaking, all screens are "aftermarket" and we inform our
customers as such. The only truly original screens either go to Apple,
AASP, or removed from an actual iPhone. What most vendors include in
their offering is something best described as "original grade". This is
a screen that is very VERY comparable to the screen that came on the
iPhone. Many repair shops offer an "original" option but we think they
are misleading their customers.

In a nutshell, as with the aftermarket automotive part industry, there
are good quality components and there are bad quality components, which
is something that customers who might seek third-party repairs need to
be aware of.

Recycled and Reused Components

There's also a big market for reused iPhone components. Some repair
shops will take the LCDs from broken iPhones that are repaired and sell
them in bulk to a company that refurbishes them and attaches new
digitizer components so they can be reused again.

The refurbishing company then sells the displays back to the repair
shops for use in future iPhone repairs, but there's limited supply. Most
of the repair shops that I spoke to told me that they do buy these
upcycled genuine iPhone components when possible, but supply is limited.


According to iFixit's Kyle Wiens, much of the repair market has shifted
from OEM parts sourced through reuse to aftermarket parts over the
course of the last two years.

"We stuck to OEM parts as long as we possibly could, and we sell OEM
parts when we can get them, but aftermarket quality got so good and the
price was so much cheaper, it made more sense," he said.

Apple Authorized Service Providers

The only way for a repair shop to get access to genuine Apple components
for repairs is through the Apple Authorized Service Program. While there
are many thousands of independent repair shops in the United States,
there are far fewer AASPs -- approximately 4,800 worldwide.

Shops that want to become Apple Authorized Service Providers need to
meet Apple's requirements, and Apple doesn't approve all shops that
apply. Training courses and exams are involved, which can cost thousands
of dollars, and shops are required to "meet Apple's standards at all
times" with Apple conducting audits and reviews to ensure compliance.

AASPs in the Bay Area

There are benefits to being an Apple Authorized Service Provider.
Customer trust, for example. At an AASP, Apple customers know that the
repairs they're getting are the same repairs that Apple would offer,
which can draw in more foot traffic. Apple also directs customers to its
AASPs through its Customer Support website.

AASPs have access to parts that can be ordered directly from Apple for
repairs using genuine components, along with comprehensive product,
repair, service, and troubleshooting guides. Apple also offers
reimbursement for labor, parts, and travel for repairs to developers
covered by Apple's warranties, so there's guaranteed business involved
in being an AASP.

AASP training courses

There are negatives, though. AASPs must follow Apple's repair
guidelines, which can involve long checklists of steps, and Apple limits
the repairs its service providers can do in-house. For a lot of repairs,
devices must be sent to Apple, for a repair turnaround time that can
span days.

Longtime Apple Authorized Service Provider Mac-O-Rama told MacRumors
that Apple's AASP program is worthwhile because it offers access to
Apple parts, training resources, and Apple's processes for repair. While
most Mac repairs can be done in-house, Mac-O-Rama says the same is not
true of iPhone repairs, which can be challenging.

    We don't have the equipment or authorization to perform iPhone
display replacement in-house, so our only option is to mail in that
particular repair to the Apple service depot, which takes longer than
most people want to be apart from their phones.

Despite these delays, Mac-O-Rama prefers working with Apple because it
results in fewer repair issues. The company says it has seen many
repairs fail because of low-quality third-party parts or improper
installation.

    For example, clients come in with a 3rd party display replacement
and the bezel is heavily damaged. If you try to take the display off and
replace the battery and then try to reassemble the phone, the display
will crack due to the uneven bezel. Other times we will start a battery
replacement and find a previously installed battery that has been
installed incorrectly, so we can't even get it out of the phone without
creating a fire hazard. It's scary when you have so many untrained
"technicians" out there handling this equipment.

For the most part, Apple Authorized Service Providers need to send
iPhones back to Apple for repair when the display is involved.
Mac-O-Rama is able to replace some iPhone components like the camera and
the battery, but other issues require a long turnaround time.

The reason for this is a replacement and calibration process that's done
with something called the "Horizon Machine," which up until last year
was only available to Apple retail stores and repair warehouses.

Apple's Horizon Machine, via Reuters

Starting last summer, Apple began providing some AASPs with Horizon
Machines, allowing them to do more repairs in-house for faster
turnaround times. Apple gave 200 AASPs access to the Horizon Machine in
San Francisco, London, Shanghai, and Singapore.

Apple is continuing to roll out Horizon Machines to its service
partners, but in some countries like Australia, we've been told that
there are very few repair shops that have been provided with one of the
Horizon Machines. None of the Apple Authorized Service Providers we
spoke to had one of these machines, so the availability still appears to
be quite limited.

Sans Horizon Machine, a lot of broken iPhones must be sent to Apple for
display issues and other problems. In many cases, Apple also does device
replacements rather than repairs, which further limits the components
that AASPs can fix in house.

Independent Repair Shops

Most repair shops are not affiliated with Apple, and there are myriad
reasons why repair outlets choose not to become Apple certified.

Laxmi Agrawal from Cupertino iPhone Repair said that he spoke with Apple
about becoming an AASP, but it wasn't feasible for his business.

    We decided not to continue with the AASP. Apple doesn't pay very
much. They have restrictions that you can't do screen repair at your
shop. You have to collect the device, go to a center, and wait for it to
be repaired. Turn around time is too long.

Agrawal said that Cupertino iPhone Repair gets a lot of foot traffic and
works with major companies like Facebook and Zynga, so business is good
without Apple. "We just can't work with Apple at that price," he added.

Image via Cupertino iPhone Repair

iFixer's Mansoor Safi said that Apple's program isn't convenient for
small businesses. "Everything gets dictated by Apple," he said.
"Pricing, what needs to be done, parts. And Apple pays such a small fee."

Safi also explained that Apple only really repairs two components in the
iPhone -- the battery and the screen. For everything else, Apple does
total device replacements. His shop, and other repair shops, can take
care of water damage, speaker issues, problems with the charging port,
and other problems at a cheaper price than Apple charges customers for a
total device replacement.

Multiple Apple Authorized Service Providers that we spoke to (all of
whom wished to remain anonymous) confirmed Apple pays a limited amount
of money for iPhone repairs. With mail-in repairs, for example, one shop
told us that compensation does not cover administrative expenses, while
another told us it charges a premium to cover the expenses that Apple
does not.

"If iPhone repair were our only function, I'm not sure that we could
survive on the compensation received from Apple, especially for mail in
repair," said one source.

Jim from San Jose's Cellular Repair Center told us he's reached out to
Apple two or three times about the Apple Authorized Service Provider
program and hasn't heard back. He has an open mind about joining, but is
a little lukewarm on the idea.

    Our understanding is that there are restrictions on certain types of
repairs that we would not be allowed to perform and we would balk at
that. We are one of the few shops in the area that are good at
micro-soldering and we would need a pretty big carrot to give that up.

Micro soldering is a skill that can fix sensitive iPhone problems that
require a lot of precision, such as backlight failure, "Touch Disease"
resulting in multi-touch issues, and problems from water damage. AASPs
can't address these issues and instead must send devices to Apple for
replacement.

Image via Cupertino iPhone Repair

Apple is said to be selective about the shops it chooses for the Apple
Authorized Service Program, especially in the Bay Area, and while we're
not able to confirm it, some repair shops said that Apple isn't
accepting new AASPs in certain areas.

Without Apple certification, independent repair shops have no access to
components that are manufactured by Apple and thus have two options:
aftermarket components produced by third-party companies, or refurbished
parts that have been taken from broken iPhones, revamped, and purchased
in bulk.

Apple's Philosophy on Repairs

Apple encourages all of its customers to visit an Apple retail store or
an Apple Authorized Service Provider for repairs because they use Apple
training materials and Apple-produced components, so a device repaired
from an AASP is indistinguishable from an original, undamaged iPhone.

Apple's general point of view seems to be that repairs made by
independent shops are unsafe, and with the number of repair shops out
there, iPhone customers do indeed run into bad repairs and real safety
issues.

An iPhone with a separating display after a repair from an independent
repair shop

When Apple repairs a device, it goes through a mini factory testing
process with the aforementioned Horizon Machine. All of the features
need to be calibrated precisely to the meet the specification it was at
when it first came out of the factory, and this is testing that only
Apple (and select service providers) can perform.

Only by using an Apple Authorized Service Provider can customers be sure
that a device is functioning 100 percent the way it was intended to when
it left Apple's factory.

According to Apple, there are a lot of issues that can arise when
getting an iPhone repair from a non-Apple Authorized provider, such as
nonfunctional Touch ID buttons, display dead spots, gaps around display
edges, poor quality sound, excessive battery consumption, and more.
Apple also warns against counterfeit parts on its support website.

Apple sees AASPs as an important part of Apple's repair ecosystem,
providing repair options in areas where there are no Apple Stores and in
dense urban areas where demand is high and Apple retail stores might
have long wait times.

The Cost Difference

Repairs from independent shops are often cheaper than the prices Apple
charges, and that's one of the reasons why some customers choose to
eschew Apple repairs.

With higher-quality aftermarket or OEM repair components used in repairs
on newer devices, prices aren't always much different from what Apple
charges, but on older devices, independent repair shops almost always
beat Apple on price. The same is true of repairs where Apple might scrap
the entire device and require customers to pay an out-of-warranty
replacement cost. Repair shops can sometimes fix these issues without
writing off the entire iPhone.

Jason Yin of QuickStart Cellular said he charges $60 to $90 for iPhone 6
to iPhone 8+ repairs. An out-of-warranty screen repair from Apple for
iPhone 6 to iPhone 8 costs from $129 to $169, so it's understandable why
some customers choose more affordable options. "Other damage" that isn't
limited to the display can cost anywhere from $299 to $399 from Apple.

Apple's repair prices for several iPhone models

Cupertino iPhone Repair charges $129 to fix an iPhone 7 screen, and $149
to fix an iPhone 8 screen, which is not far off from Apple's pricing at
all. On older devices, though, the savings are much more significant.


Well-known repair site iFixit sells an iPhone 7 LCD screen with
digitizer and all of the tools necessary to make the fix for $90, a good
$60 less than Apple's asking price. You'll need to follow iFixit's
tutorials for these kinds of repairs, so it's not for everyone, but it's
a good savings for those technically inclined.

iFixit's iPhone 7 repair kit

Repair shops charge a range of different prices, and a lot of time,
price dictates quality. We were told by multiple repair shops that a
higher price unsurprisingly generally translates to a better quality
component.

Are Aftermarket Repairs Safe?

In a free market with no regulation and no accountability, you don't
know what you're getting when you walk into a third-party repair shop,
which isn't something the average person seeking a repair likely thinks
about. Still, with some vetting, aftermarket repairs can potentially be
a good option for some people and in some situations.

iFixit's Kyle Wiens doesn't believe independent repair shops should be
avoided in favor of AASPs. He likens the independent repair market to
the aftermarket car repair market. There are good mechanics and bad
mechanics out there, and the key is to find someone that you trust.

iFixit, for example, travels to Asia to find the best quality components
to sell to customers looking to repair their own devices, and employs a
testing facility to make sure the aftermarket options are of the best
possible quality.

"We provide factories with extensive quality guidelines," said Wiens,
with iFixit dictating parameters like acceptable number of dead pixels,
necessary display brightness, and more, to best match what Apple offers.

When seeking a repair, there's no standardized nomenclature to let you
know about the grade of a component a repair shop might be using, so
Wiens recommends reading Yelp reviews, having conversations with shop
owners, and when initially choosing, going for the more expensive repair
shops. "Find a repair shop you can trust that will stand by their work,"
said Wiens.

Almost every repair shop we spoke with said the thing. Check the Yelp
reviews. Read what people are saying. Ask questions. Make sure there's a
warranty that the repair shop will stick by.
"""

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