Tech companies that sell laptops for home use are losing more than $100 million on repairs, a new study shows.
The Globe and Mail’s David Eby examined the industry’s revenue, costs and financial performance in 2016 and found that many manufacturers were struggling to make ends meet and were facing mounting competition from companies that offer cheaper and more convenient solutions.
Eby, who is an analyst with the BMO Capital Markets firm, said the sector is also grappling with a number of factors that could increase costs.
“There is the risk that consumers are going to spend more, and the risk of price cuts and other reductions in services,” Eby said.
“Also, it’s likely that there will be a tightening of credit conditions.”
Eby added that the trend toward smaller computers and tablets could also be putting pressure on the industry.
“This could mean more competition, less choice for consumers,” he said.
In Canada, the average laptop repair costs about $100, while a laptop replacement cost about $60.
In the United States, the typical laptop repair cost about 10 cents more than a replacement.
The average cost for a laptop repair was $879 in the United Kingdom, according to the Consumer Federation of America.
In some countries, like Australia, it can cost more.
The study also found that in some regions, such as the U.K., the average cost of a laptop repairs is $1,400 or more.
In many countries, the costs of repairing laptops are higher than for replacing them, Eby noted.
The industry has struggled to keep up with rising demand and a growing number of consumers are turning to online repair services for a solution.
Emanuele Rizzo, chief operating officer of Laptop Repair Canada, said his organization is not commenting on the study, because it is not publicly available.
Rizzos group, which represents manufacturers, repair technicians and service providers, has been in talks with the government about the issue.
“We have an obligation to our customers to have the right solution, but we also have to do it in a responsible way,” Rizzios told The Globe.
The U.S. Department of Health and Human Services (HHS) also recently announced that it would offer incentives to help small businesses find affordable replacement parts and help companies increase their return on investment.
The HHS said it will help manufacturers reduce the cost of replacement parts by 30 per cent and help them to get more business from new customers.