Australia takes a bite out of Apple

The Australian equivalent of consumer protection fined Apple $ 9 million (AU) for having bricked phones illegally under the scandal known as Error 53. 

While $7 million (US) won't even register as a blip on the Apple balance sheet -- the story is far more valuable.  Today's front page of the WSJ headlined the story as "Apple Fined as Customers win a Right to Repair battle".    Coverage has been world-wide. 

Apple has continued to modify products they sold, and no longer own, using various firmware updates that have proven to be damaging to consumers.  "Battery-Gate" is just a more recent example of the dangers of letting an OEM modify equipment surreptitiously.   

Apple has also failed to mention, or document, many other product defects that require repairs they do not want to offer -- such as fixing touch disease (a manufacturing defect).  While no products are technically perfect,  our view is that if Apple doesn't want to make repairs -- they shouldn't be actively preventing consumers from seeking repairs elsewhere.  

Australia's action today is only the beginning of legislative action that will restore our collective right to repair.  

 

 

The Circular Monopoly -- Why OEMS hate Right to Repair

We’re often asked why Repair is monopolized – and the answer is always “Follow The Money”. There are three reasons that money is at the heart of the issue.  Stock value, Services Revenue, Aftermarket Control.  We call this the Circular Monopoly. 

Step One: Keep Selling More New Products

Stock values are key to executive compensation.  Analysts look for revenue growth of new product offerings.  The more new products sold, rather than repaired, the better the picture for stocks.  Executives are therefore highly motivated to make new sales as attractive as possible, and repair limitations feed that cycle.  Apple does a great job of keeping their customers on a steady diet of upgraded products instead of simply repairing what they've already got.  

Step Two: Feed Services Revenue

Services revenue is also a driver for monopolized repair.  John Deere's repair monopoly has greater benefits to the Dealership network than to Deere itself.  Farmers don’t buy new tractors frequently, but the equipment itself needs constant repair.  Car dealers faced exactly the same problem with Automotive Right to Repair.  Following passage, the auto industry adjusted, the dealership service experience has become notably more consumer-friendly, and despite strident warnings from the Alliance of Automobile Manufacturers, the sun still rises in the morning.

Step Three - Eliminate the Used Market

Control of the aftermarket is also a powerful driver for many OEMs.  Used equipment, like used cars, is always an option for a purchase, just as with used cars.  Equipment that cannot be repaired, for reasons of policy or practicality – is very hard to resell on the used market.  Repair must be widely and competitively available for used markets to function.   

Closing the loop on repair drives drives used equipment buyers to the showroom for a new product – feeding the stock value of the OEM, feeding the exclusive dealership model, and destroying the secondary market for older equipment.

Its a circular monopoly. 

 

After Apple Slows Phones, Interest in Repair Spikes

A new survey released by U.S. PIRG shows that interest in additional phone repair options surged as battery issues with iPhones made headlines.

Findings show that we throw out 350,000 phones each day, highlighting need for expanded access to repair.

Boston, MA -- A new survey released today by U.S. PIRG, “Recharge Repair,” found a surge in consumer demand for phone repair following the revelation Apple was slowing phones with older batteries. “Recharge Repair” identifies the barriers to battery replacement and phone repair that add to long repair delays for consumers. The findings support the need for Right to Repair reforms to grant consumers and third parties access to the parts and tools to repair cell phones and other electronics.

Among the findings were:

·         We surveyed 164 independent repair businesses who reported a 37% increase in weekly battery replacement service requests since Dec. 20.

·         Self-repair interest surged as well – traffic to iPhone battery repair instructions went up 153%. 180,000 people viewed instructions in between Dec. 20 and Jan. 22

·         eWaste is a growing concern. America throws out an estimated 350,000 cell phones per day, or 141 million phones tossed each year.

“We should be free to fix our stuff,” said Nathan Proctor. “We should eliminate needless waste – repairing things that still have life -- but companies use their power to make things harder to repair. This survey shows that people are clearly looking for more options to repair their phones.”

18 states, from Wyoming to Massachusetts, have introduced “Right to Repair” or

“Fair Repair” laws which guarantee access to the parts and tools needed for repair.

In December, it was discovered that Apple was intentionally slowing down phones with older batteries. They defended this tactic by saying it was intended to reduce performance issues, but had many people wondering if Apple was covertly pushing people to upgrade to a new phone. Regardless of intent, these issues are resolved by replacing the battery – a battery which Apple doesn’t make available to customer or third-party repair businesses.

“These companies go to extraordinary lengths to keep people from repairing their devices. They glue parts to the casing so they can’t be removed, they refuse to sell replacement parts, they digitally lock devices to prevent third party repair,” said Repair.org Executive Director Gay Gordon-Byrne. “Apple is telling some people they can’t fix their batteries until April. Certainly, there are people with easily fixable phones who will get new ones instead of waiting. Why won’t they just sell their original batteries to other repair businesses? This problem would be over in a few days.”

“Batteries fail before the technology in smartphones and tablets which is why we are fighting for a law to require repairability of batteries — making advanced technology available to more consumers,” said Washington State Rep. Jeff Morris, who sponsored the bill which was advanced out of the state’s House Technology and Economic Development Committee last week.

Missouri bill sponsor, Rep. Tracy McCreery, added. “I’ve put forward a bill in Missouri to make it a lot easier to repair our products, including the replacement of iPhone batteries. Batteries will always wear out; Consumers should be able to replace their own batteries.”

Our survey includes a number of quotes from small businesses owners about the challenges they see repairing products. Ronny Hamida of Rontronix, Nebraska, noted: "If a product is being made by a company, the repair tools for it need to be made available as well. Repairing devices using tools created by and supplied from the device's manufacturer is just another way to ensure product reliability with considerably less environmental waste for a better tomorrow."

U.S. PIRG supports Right to Repair reforms because they reduce waste by limiting companies abilities to push customers to toss products that still have life.

“Fixing something instead of throwing it away to buy something new is better for the environment. Repair should be the easier, more affordable choice and it can be. People are resourceful, they can find ways to fix things, to keep them from going to waste, sitting in a landfill somewhere,” said Proctor. “But the first thing we need to repair are our laws.”

 

The full findings, including state by state breakdowns of phone waste and web traffic, and available here

 

Nathan Proctor is the Director of U.S. PIRG's Right to Repair campaign. 

 

 

CPU Throttling -- A Perfect Scandal for Right to Repair

Apple is putting a lot of stock in the ability of their PR department to manage their latest scandal.   

It takes a Machiavellian Genius to come up with the preposterous excuse that their latest cpu-throttling scandal was done for purely noble reasons.  Wow.  Even if this were a new blunder for Apple it would be a whopper.  But Apple has a long history of deception and manipulation.  Their credibility is shot.  

Three Big Examples:

Jailbreaking (2010) – Apple actively prevented users from downloading apps from outside the Apple Store.  See https://www.wired.com/2010/07/feds-ok-iphone-jailbreaking/ .Apple had taken the position was they needed to control the “end-user experience”, which the US Copyright Office slapped down stating clearly that the end user experience is not theirs to control. 

Error 53 (2016) – Apple bricked phones that had been repaired outside of their control using a software update to check for pairing of the original home button to the glass.  Once exposed by an outraged reporter at The Guardian they cooked up a claim of their intent to protect user security, (whopper)  and then another claim that the specific software update was not meant for distribution and was accidentally released (whopper)  Under consumer and legal pressure – they rapidly backed down and managed to un-do the damage done.   

CPU Throttling (2017) – Having learned that their expert PR Machine can pivot around a significant crisis as proven by the Error 53 scandal,  but having learned nothing about consumer trust, Apple has pushed ahead with another deceptive and destructive update slowing the phone performance rather than suggesting a battery replacement..  

The only plausible beneficiary in this farce is Apple – as their marketing machine is always quick to recommend a new phone for all issues.  If they were sincere about helping consumers extend the life of older models, they had plenty of more obvious options. 

Apple is clearly pushing hard with all the money at their command to manipulate media attention and direct it towards debate about the merits of battery replacement, or the costs of replacement batteries, rather than their pernicious use of software updates to alter product performance without the permission of the owner.     

It remains to be seen if the sunlight of scandal will be in the minds of legislators in just a few weeks when 16 states with Right to Repair bills decide the time has come to end consumer abuse.   

For my part, I think they created the right scandal at precisely the right time.