Media Coverage

WSJ: In This ER, Doctors Operate on Pocket-Size Patients

2012-03-20

By IAN SHERR

The patient might have been under water too long. Only a few months old, the victim wasn't responding.

A doctor, in green surgical scrubs, rushed to his sparkling clean operating room, hopeful the patient could be saved.

The iHospital is a chain of stores that fixes broken Apple products but takes Apple-care to new levels, Ian Sherr reports on Lunch Break. Photo: Julie Busch Branaman for the Wall Street Journal.

After thoroughly scrubbing and putting in some new parts, he tightened the last screw and pushed the power button. The familiar Apple Inc. AAPL +0.81% logo fill the screen of the phone.

This doctor works at the iHospital.

The chain of repair shops is one of many firms that have sprung up and build their business largely by repairing Apple devices. Far from the dingy, box-and-cord littered shops of the past, these businesses have taken on the Apple ethos with slick presentation and savvy brand building. Their customers come hoping to pay less for repairs than at Apple's own stores.

"There are about 250 Apple Stores in the U.S., but there are millions of customers," says Ross Newman, the 27-year-old founder of iHospital, based in Tampa, Fla. "They need somewhere to go to fix their products."

Julie Busch Branaman for the Wall Street Journal
Eric Linsky, center, retail director at an iHospital in Tampa, Fla., discusses an iPhone repair with Adam Rivera, left, a Doctor of iDevices., or D.i.D. Earning that title requires completion of a two-week training program.

Other repair shops range from iHospital to Cupertino iPhone Repair in the San Francisco Bay area, to Orlando, Fla.-based uBreakiFix Co. which has stores around the country including in Chicago and Los Angeles.

Apple's own warranties are considered among the best by Consumer Reports. But until recently the company charged a hefty premium to fix broken screens or water damage—all too common problems as people take their beloved devices almost everywhere, even to the bathroom. The independent stores say they can fix devices for roughly half the cost as Apple.

Apple doesn't have any ties to the stores. An Apple spokeswoman said Apple's new AppleCare Plus policy for the iPhone costs $99 and will cover up to two incidents of accidental damage at a cost of $49 each time. The service, which lasts for two years from the date of purchase, also includes technical support in Apple's stores and over the phone.

Mr. Newman says he can compete. A new front screen for an iPhone would cost about $150, including the cost of signing up for AppleCare Plus and the incident charge. The iHospital charges roughly between $79 and $100 for that same repair, depending on the model. And, Mr. Newman added, his doctors offer tech support and a one-year warranty on repairs. Other repair shops offer similar prices and services.

Keith Fredrickson, 34, and his wife Margaret, 35, of Jersey City, N.J., each bought a brand new iPhone 4S a couple of months ago. A few days after Ms. Fredrickson got her phone, it slipped out of her back pocket in the bathroom. "She had already flushed the toilet, thankfully," Mr. Fredrickson says.

Julie Busch Branaman for the Wall Street Journal
Ross Newman opened the first iHospital in Tampa, Fla., in 2010, The chain has grown to six stores in four states.

Once out of the water, the device wouldn't turn on. They tried putting it in a plastic bag filled with rice, a common recommendation, but it didn't help. Placing it in a bag with moisture-absorbing desiccate packets from vitamin bottles worked, but only for a few moments.

So, Mr. Fredrickson took the dunked device to an iHospital.

"I walked in and noticed they were in scrubs, and thought it was mildly entertaining," Mr. Fredrickson says. "I was traumatized and nervous about whether they would fix it."

They did.

Water damage is among the most common ailments for devices, repair-shop operators say. Hayden Dawes, 25, who formed iBroke LLC in Palm Beach Garden, Fla., last year, says many of the customers who ship him their broken devices have had some sort of liquid damage.

Apple doesn't supply parts to either business. Both Mr. Newman and Mr. Dawes say their parts come from China, where most of Apple's devices are manufactured. Mr. Newman says he didn't have to ask Apple for permission to use the lowercase i and had no trouble getting iHospital registered as a trademark in the U.S. and Europe.

To drive home an image of Apple-level quality, Mr. Newman created a certificate program called D.i.D., "Doctor of iDevices," which requires passing Apple's technical-certification tests in addition to his own. Mr. Newman says employees must retake the exams every year, just like Apple's in-store technicians.

The company's six stores have rung up about $1 million each in sales in the last year. The company, founded in 2009, started expanding to states outside of Florida last year. While in training, Mr. Newman's technicians are typically relegated to the "triage" area, where devices are laid out on an antistatic mat and diagnosed before being brought to the "operating room," a workshop in the back of the store that has a large glass window for customers to watch what's going on. There is even a "graveyard" bin for devices to be repurposed or recycled for parts.

Mr. Newman says he plans to expand the chain across the country and to stick with his medical motif. He bought an ambulance to do on-site repairs for corporate clients. He emblazoned it with ads for iHospital, and outfitted it with white flashers, not red, so people don't get confused.

Mr. Dawes started iBroke with an old Volvo, performing repairs at customers' businesses and homes. Eventually, he bought a new car and outfitted it with work benches and toolboxes. Now, he does most of his work at an office with a clean room.

He says iBroke fixes between 15 and 30 phones a week, though he expects that to grow. He estimates his revenue was between $40,000 and $60,000 in the past year.

Local customers, like Ryan Smith, frequently come in to iBroke with broken screens. The 26-year-old student says he has broken his iPhone 4 several times getting out of his car.

"I keep my phone in my lap when I drive and sometimes when I get out real quick I don't think," he says.

Mr. Smith didn't go to one of Apple's stores because he assumed it would charge too much. Plus, "I wanted someone independent to do it," he adds.

Write to Ian Sherr at ian.sherr@dowjones.com

Courtesy of The Wall Street Journal