Partners Fuming Over Symbol Repair Service

Symbol's Service From the Start allows partners to sell three-year coverage plans for accidental damage to Symbol's MC line of mobile computers and enterprise PDAs, but repairs are still handled by Symbol. The new program extends Symbol's efforts to centralize repairs, which began with the launch of its PartnerSelect program in 2003. Since that launch, instead of going to partners for repairs, end users send their damaged devices directly to Symbol, which advertises a three-day turnaround time.

A Symbol spokesperson said the vendor agreed to direct professional services business opportunities such as consulting, planning and integration to its partners to offset the impact on partner revenue.

Several partners who requested anonymity said they plan to continue to repair and refurbish Symbol devices, not only because Symbol's service is inconsistent, but also because their own customers don't want to be forced to buy new equipment. "Symbol has been trying to strong-arm all its partners into buying [Service From the Start], but I won't do it because they can't handle the service--and service is too important to my business," said one partner.

"Symbol would love for all of us to be out of the third-party service business, and they threaten to end the partnership if you do any service. It puts you in a really difficult situation [with customers]," said another partner.

Sources said Symbol's move to bring repairs in-house is a sign of dwindling hardware margins industrywide. "Symbol is essentially saying to partners, 'We've realized break/fix is actually a profitable business, so we want you to give up that third party services revenue," said one partner.

Friction over Symbol's move to centralize repairs has led to the end of at least one high-profile partnership, according to sources. Ryzex, a Bellingham, Wash.-based solution provider that repaired and refurbished Symbol devices, broke ties with the vendor two years ago. Ryzex did not respond to several requests for comment on the Symbol partnership.

A Symbol spokesman said Ryzex chose to not change its business model to comply with PartnerSelect guidelines. Ryzex can purchase certain "open" category products from distributors, but is not authorized to fix and sell Symbol products, he added.

Partners that have complied with Symbol's repair policy said they experienced some initial pain in transitioning from incremental revenue to getting service revenue upfront. However, several partners said that so far, their customers are embracing Service From the Start.

"It was a challenge to change our business model, but [to compensate] we've stayed focused on software solutions, complex deals, and bundled services," said one partner, who estimates an attach rate of between 50 percent to 60 percent for Service From the Start.

Although Symbol's repairs were inconsistent after the opening of service centers in Mexico and the Czech Republic in 2003, the quality of service has improved dramatically over the past 12-18 months, the partner added.

Chic Holsinger, vice president of sales at Point-Of-Activity, a Richmond, Va.-based partner, reports an attach rate of 85 percent to 90 percent for Service From the Start. He believes the anger of some partners is due to lingering resentment from Symbol's move to centralize repairs.