Refurbishing Industry

Two main types of companies operate in the computer maintenance and repair industry: third-party maintenance (TPM) companies, which performed service contracts on equipment from various manufacturers; and original equipment manufacturers (OEM), which both manufactured and serviced computers and peripheral equipment. This distinction was less pronounced in reality, however, because OEMs often subcontracted their service agreements to either affiliated or unaffiliated TPM firms.

The computer maintenance and repair industry grew dramatically in the 1980s and 1990s as computer sales skyrocketed. From total shipments of less than 2,000 units and $600 million in 1960, the computer industry topped 900,000 units and $16 billion by 1980, and reached 7 million units and $44 billion by 1990. By 2003, this number was expected to double to more than 15 million units annually. This rapid growth, along with a shift from mainframes to PCs, introduced opportunities for small, independent TPM companies to compete against the large OEMs. Nonetheless, in the late 1990s, OEM companies were reported to hold as much as 80 percent of the maintenance and repair market in some categories, such as high-end system and mainframe services.¹

In 2003, Microsoft launched its regional Microsoft Authorized Refurbishers (MAR) program across 133 countries Europe, the Middle East and Africa (EMEA) and the United States. Through the program, refurbishers are licensed to install Windows 98 Special Edition and Windows 2000 Professional operating systems on refurbished computers supplied to educational establishments, charitable organizations and telecentres. The program has been created to meet the needs of refurbishers and promote digital inclusion by helping under-served communities realize their potential through access to low cost technology solutions.²

Is the Used Computer Market Going Away?

Jim Lynch, in his Techsoup Blog of November 15, 2011³, had this to say:

Microsoft’s Manager of Refurbishment, Sean Nicholson, estimates that the used laptop market worldwide will grow in developing countries rapidly.³

Refurbishers in emerging markets will start to see a higher supply of laptops for refurbishment. Because they are much cheaper to transport, laptop prices will come down, and they will start appearing in the larger markets in emerging economy countries.

The Future of Refurbishment

The IT market will undoubtedly change with new developments like cloud computing and the current trend of consumerization of IT in which personal consumer devices like smart phones and tablet devices like iPads are being integrated in to the work place.

It means, however, that large numbers of PCs and also consumer devices of different types will be going in to used market. Someday, I guess, used PCs and other IT equipment will be a rarity.

Futurist Raymond Kurzweil envisions a time when three-dimensional molecular microprocessors will be commonly implanted in our brains for the purpose of intelligence and physical amplification. I suspect that even then, there may well be a decent market for low-cost used computer implants.

______

1. Reference for Business, Encyclopedia of Business, 2nd ed.

2. World Summit on the Information Society, Geneva 2003.

3. Techsoup.org, November 2011.