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FedEx Moves into PC Repair

8:08 AM, Sep 27, 2012   |    comments
Federal Express is getting into the computer repair business. Shown is a mock-up of a FedEx sticker for a Getac computer. (Courtesy Getac via USA Today)
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Los Angeles (written by Jefferson Graham/USA Today) -- FedEx wants to do more than just promise overnight delivery of important documents and goods. Now it wants to repair your computer as well.

The Memphis-based shipping giant on Wednesday began reaching out to major corporations with overnight computer repair. It's launching its TechConnect service with the repair expertise of a small niche computer player Getac, a Taiwanese-based manufacturer of "rugged" computers aimed at the military, law enforcement and utility workers.

"We found there was a high level of dissatisfaction in the marketplace," says Tod Taylor, a manager at FedEx's TechConnect unit. "What we offer is unparalleled turnaround time."

FedEx, which reported annual revenue of $43 billion in 2011, has been fixing its own technology gear for 30 years, Taylor adds. Now it's using the same unit to fix outside PCs, too.

The company is starting with Getac and hopes to expand to other computer suppliers that can handle PC repairs. The focus initially is on capturing a chunk of business from the enterprise market. But FedEx hopes to expand to small businesses and eventually consumers, especially those who drop in daily to the 1,900 FedEx Office locations worldwide.

Pricing depends on the job. Repairing a device that's still under warranty would be free (plus transportation costs), while pricing for a computer needing a new hard drive or motherboard would depend on the cost of the part. But Getac says to expect prices to start at $50. Computers can be sent in via courier pickup or dropped off at FedEx locations.

Taylor says costs will probably be a little higher than those at a neighborhood computer shop or a chain like Best Buy. "There is a cost associated" with speedy delivery, says Taylor.

The business of repairing computers for consumers has seen better days, says Roger Kay, an analyst with Endpoint Technologies. "We're a throw-away society where if something goes wrong, you go buy a new one." But for enterprise, they make such big orders that repair and service is expected. He thinks FedEx is smart to expand to service. "It can be labor-intensive, but it already has the (TechConnect) unit in place, and they're using it to bring in additional revenue."

The upshot for FedEx is that it gets to cross-promote its shipping network and perhaps steal some customers from U.S. he adds.

For Getac, which has U.S. offices in Southern California, the deal with FedEx vastly expands its ability to turn around a repair in a day's time. In the past, computers were fixed at its Irvine, Calif., headquarters, but the repair window was small -- from around 11 a.m. when the PC reached a technician until the 4:30 p.m. shipping cutoff. Now, at FedEx in Memphis, shipments will be received at 5 a.m., making 24-hour turnaround a reality. "The extended day is very critical for us in repair," says Getac President Jim Rimay.

Even in a stagnant computer market, Getac has latched onto a growing area. It says its sales in the U.S. are up 360% this year. Parent company MiTAC-Synnex, which also makes casings for video game systems, reported 2011 revenue of $25.3 billion, up from $21.5 billion the previous year.

MiTAC doesn't break out Getac's computer revenue. Getac originally was a joint venture with General Electric (hence, the GE in Getac) to supply computers to the Department of Defense that could withstand heat, rain, water, sand and dings. "Our products are used in areas where computers shouldn't be used," Rimay says. GE was bought out in the early 1990s.

The company also sells tablets based on the Android operating system, but its biggest seller remains the laptop. "There are still many apps that require physical input," Rimay says.

At a time when major computer manufacturers, such as Hewlett-Packard and Dell, are reporting slower computer sales, small Getac is bucking the tide. That's because "when your power goes down, the utility worker still has to go out there and fix it, no matter what the weather is," says Getac director of marketing John Lamb.

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