Why iPhone repair costs have soared

Apple earns almost as much from its customers’ butterfingers as it does through corporate tax loopholes.

The company charges as much as $229 to replace an iPhone 5 with a broken screen. That’s more than the $200 price of the device with a two-year contract, and more than a third of the $650 cost of the phone without a contract. Select Apple stores offer the option of a $149 repair. And for those who paid $99 for AppleCare insurance, the replacement is just $49. The replacement components for the iPhone 5 are much more expensive than similar parts for prior models — so expensive in fact that many independent repair services cannot compete. The iPhone-repair business is lucrative. Nearly one-third of iPhone users damaged their devices during 2012, according to a recent study by gadget insurer SquareTrade, which has a vested interest in clumsy customers. Repairs have cost consumers nearly $6 billion since the iPhone was launched in 2007. What’s more, iPhones get abused more than iPads, only 10% of which were damaged, it says. Despite this, iCracked — an independent firm that has technicians across the U.S. — charges half as much to fix an iPhone 4S screen ($79 to $99) as to fix an iPhone 5 ($169 to $199).

Why? There is a tight control on iPhone 5 components in the market.