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Meet the $21 Million Company That Thinks a New iPhone Is a Total Waste of Money

IFixit's founders, Kyle Wiens (left) and Luke Soules, have built a thriving company around a pretty radical idea. CREDIT: Alex V. Murawski

The guys behind iFixit want to show you how to fix everything from your iPhone to your toaster–for free. By doing so, they've built a huge business. Even though Apple totally hates them.
 IFixit's founders, Kyle Wiens (left) and Luke Soules, have built a thriving company around a pretty radical idea. CREDIT: Alex V. Murawski
  
"Here–stand on that," says Kyle Wiens, positioning himself opposite his visitor and reaching for the switch. Then comes the electric hum, followed by the soft jolt and the ground receding. It's a car lift, mechanic's grade, salvaged from a dealership, reinstalled on a concrete pad in Wiens's backyard in Atascadero, California. 

Wiens–who's wearing jeans, a checkered shirt, steel-rimmed glasses, and the kind of haircut you might give yourself with a pair of dull scissors–has about two sloping acres on a rise overlooking U.S. Highway 101, midway between Los Angeles and San Francisco. The high hills beyond are green from this winter's drenching rains. There's a stucco main house, a prefab outbuilding, a chicken coop, a patio with a monster grill, and a work shed that houses motorcycles, dirt bikes, kayaks, wetsuits, a generator, a compressor, a welding torch, hammers, wrenches, and drills, as well as several small piles of disassembled equipment: his many works in progress. The lift is just outside the shed. Wiens uses it for jobs most people would delegate to a professional, like swapping out the transmission on a truck. And for cheap thrills: "It's so cool!"

IFixit co-founders Kyle Wiens (left) and Luke Soules in a loft atop a rock-climbing wall. Note the strategically placed iFixit logos on their laptops.CREDIT: Shaughn and John
It's also there because fixing stuff is his life's work. Wiens, 33, is co-founder and CEO of iFixit, a company whose mission, he says, is to "teach everybody how to fix everything." On iFixit's website is a vast library of step-by-step instruction sets covering, well, let's see: how to adjust your brakes, patch a leaky fuel tank on a motorcycle, situate the bumper sensor on a Roomba vacuum cleaner, unjam a paper shredder, reattach a sole on a shoe, start a fire without a match, fill a scratch in an eyeglass lens, install a new bread-lift shelf in a pop-up toaster, replace a heating coil in an electric kettle, and–iFixit's specialty–perform all manner of delicate repairs on busted Apple laptops and cell phones. More than 25,000 manuals in all, covering more than 7,000 objects and devices. Last year, according to Wiens, 94 million people all over the world learned how to restore something to tiptop working condition with iFixit's help, which frankly was a little disappointing. Wiens's goal was 100 million.

Some of the knowledge stored on iFixit's website is produced internally. Most comes, wiki-style, from the world at large. Either way, the information is always free. You don't have to register. There's no advertising. IFixit makes about 90 percent of its revenue from selling parts and tools to people who wouldn't know what to do with them if iFixit weren't also giving away so much valuable information. The rest comes from licensing the software iFixit developed to write its online manuals, and from training independent repair technicians, some 15,000 so far, who rely on iFixit to run their own businesses.

"We impact the economy in a far bigger way than we capture ourselves," Wiens allows. He's OK with that. That's how you get to everybody and everything. But it's a real business. A 14-year-old, 125-employee, five-time Inc. 5000 honoree growing 30 percent year over year, iFixit topped $21 million in sales in 2016 and delivers steady profits. "We give away a whole lot for free," says co-founder Luke Soules, who's 32. "We like that, and it still works, even if only a fraction of those people give us money."

Consider how we as consumers relate to our electronic gadgets and gizmos. We can't live without them, but we have no more idea about what goes on beneath their shiny exteriors than the apes did about the monolith in 2001: A Space Odyssey. When they break, we feel helpless; we want a new one right away. But there are consequences to consuming like that–environmental consequences, as our discarded toxic technology makes its way into landfills and dumps; resource consequences, as finite supplies of crucial elements like iridium are rapidly consumed and discarded; eco­nomic consequences, as we recklessly empty our pockets to keep pace with the latest and greatest; and human conse­quences, as we grow increasingly frustrated by the magical objects on which we depend.

IFixit and its noble mission may not seem like much of a threat to anyone, least of all the most profitable company on the planet, but Apple has been watching iFixit carefully. Apple doesn't like iFixit, because iFixit writes its own in-house versions of Apple's top-secret repair manuals and shares them with all comers. It sells reverse-engineered Apple-equivalent parts and bundles them with custom-designed picks, tweezers, spudgers (tiny plastic chisels), and screwdrivers in affordable, everything-you-need kits. Working with iFixit, you can replace a cracked screen or a fried battery for a lot less than if you were to take your problem to an Apple store, which might not be an option for you anyway, depending on where you live. Plus, iFixit won't try to sell you a new phone. (Apple ignored repeated requests to comment for this story.)

IPhones equipped with new iFixit replacement screens, awaiting testing.CREDIT: Shaughn and John
Then again, iFixit doesn't like Apple either. At iFixit headquarters in San Luis Obispo, California, the recycling goes in cans labeled with iFixit's logo–it resembles a Phillips screw head–while the cans with the Apple logo are for trash. In eight state legislatures across the country, the two companies are fighting over so-called right-to-repair laws (see "You Gotta Fight for Your Right to Repair," below) that, if passed, will loosen Apple's strict, cradle-to-grave control over everything it sells and eat into its stupendous repair revenue. Apple doesn't report just how huge that repair revenue is, but trade journal Warranty Week estimates that one proxy for that–sales of Apple's extended-warranty repair program, AppleCare–delivered the company a staggering $5.9 billion worldwide in 2016. "It's the world's largest extended-warranty program," says Warranty Week editor Eric Arnum. "Bigger than GM's. Bigger than Volkswagen's. Bigger than Best Buy's or Walmart's."

IFixit wouldn't be here if it weren't for Apple and everything about it–its innovation, its ubiquity, and its arrogance. IFixit is basically a parasite if you think about it that way. Or maybe a pilotfish, swimming with the shark and subsisting on its leftovers. Yet that doesn't begin to capture the fullness of this company's radical mission, or the ambition of its founders, both of which Wiens has spent much time reflecting on.

"I'm really concerned about the transition in society to a world where we don't understand what's in our things," he says. "Where we are afraid of engineering, afraid of fact, afraid of tinkering. When you take something like a phone or voice recorder and you take it apart and you understand it enough to be able to fix it, a switch flips in your brain. You go from being just a consumer to being someone who is actually a participant." This may not be as cool as having your own backyard car lift. But still, it's pretty cool.

Wiens and Soules both grew up in Oregon, but they didn't meet until they got to California Polytechnic State University, where the motto is "Learn by doing." That was 2003, and they've been together ever since–as friends, roommates, 50-50 business partners, and river kayaking buddies. (When Wiens announced he was getting married, his other friends told him he would have to divorce Soules first.) Wiens talks more than Soules and sleeps less; he's the public face of iFixit, its chief explainer and grand strategist. Soules oversees operations and manages iFixit's China supply chain; he's also a pilot and a clarinetist. At Cal Poly, they bonded over their shared geekiness. "I remember him going home for Christmas break," says Soules. "He had a big, old-fashioned desktop computer. He brought it with him on the train."

Wiens's other computer was an Apple iBook G3, the curvy, candy-colored laptop known as the "toilet seat Mac." He dropped it one day, and it broke. Wiens was unfazed. As kids, he and his brother were always taking apart and reassembling old radios and kitchen appliances that their grandfather bought for them at Goodwill. He "spent his life making and maintaining things," Wiens wrote of his grandfather in a eulogistic essay published on The Atlantic's website in 2013; he schooled Wiens in the war against "entropy: the second law of thermodynamics that guarantees everything will eventually wear out"; and he sent him off to college with a toolkit and a soldering iron.

IFixit staffer Alec Thille, at his desk at company headquarters.CREDIT: Shaughn and John
Wiens needed a G3 repair manual. He searched in vain online. Apple doesn't share such knowledge with its customers. That ticked him off. It was his computer, after all. Bought and paid for. Why shouldn't he have access to its inner workings? "This shall not stand," Wiens remembers thinking, and so was born the idea for a business.

Wiens and Soules worked it out over the next several years. Initially, they thought they'd write their own repair manuals and sell them, but–first lesson–information is a tough sell. (No one would pay for eHow's articles or videos, either.) Parts and tools, on the other hand, aren't, so Wiens and Soules became online resellers, clearing out the screwdriver shelves at Sears, ordering hard-to-get parts from catalogs, and filling orders, Michael Dell-like, from their dorm. They called their fledgling company PowerBook Fixit, until Wiens got scared that Apple might hunt them down for trademark infringement. Next, they tried PBFixit, which didn't stick either. "People thought it stood for peanut butter," says Soules. Still, people came. "We didn't make money our first month," says Wiens. "We made money our second month. And we've made money ever since."

They roomed together, sleeping in bunk beds so they'd have more space for inventory. Sophomore year, they moved off campus to a two-bedroom apartment, and eventually to a three-bedroom house with a three-car garage that served as a parts warehouse. Taking care of business while keeping up with classes presented certain challenges. "I'd be on the phone with a customer, trying to walk them through installing their hard drive, and I'm looking at the clock thinking, 'I have a midterm across town in 20 minutes,' " says Wiens. "You can't tell the customer that." Eventually, they hired help. One day, an employee arrived for work at the house having forgotten his key, so he picked the lock. The boss was impressed. "To this day, we still teach lock-picking to new employees," Wiens says. (At times, iFixit has sold branded lock-pick sets despite certain complications; it's illegal to ship them via U.S. mail.)

"In the beginning, we were very carefully iterating on the customer experience around parts," says Wiens. "Then customers would say, 'Well, that's fine, but how do we install it?' So we wrote them a manual. And they would say, 'Well, that's fine, but we don't have tools,' and so we sold them the tools. And they would say, 'Well, the tools are too expensive,' so then we started building kits and just bundled the tools into the price of the parts. It turns out that we were doing something that nobody else in the parts business was."

The year they graduated, 2007, was the same year the iPhone made its debut, presaging a dramatic shift in their revenue stream from fixing computers to fixing handheld devices. What had begun as a part-time gig was by now a profitable, fast-growing business. It didn't provide them with just spending money while they were in college–it paid for college. It also covered the down payment on the $690,000 house in Atascadero that would serve them over the years, sometimes overlappingly, as their shared home, an employee bunkhouse, and iFixit's headquarters. "This could very well be a career for us," Soules remembers thinking senior year; the thought had never occurred to him before. So much for worrying about finding a job.

IFixit staffers pitching in to process the company's latest delivery of its tools inventory from its suppliers. This time around, iFixit received more than 2,000 boxes.CREDIT: Shaughn and John
The front door at iFixit headquarters on the edge of downtown San Luis Obispo is locked. A sign says "by appointment only." There is a bell, however, to which a smiling, bearded 20-something responds. He leads the way through an empty waiting room into a steel-girded, skylighted barn, filled with other bearded 20-somethings and a few of their female counterparts. This building used to be the car dealership where Wiens got his lift. He left the other lift out back for his employees' benefit, though it's not clear how many drive, much less own cars. On their first day, all iFixit workers receive–in addition to a desk, in parts, which they're expected to assemble themselves–$400 toward the purchase of a bike. The parking lot is mostly empty.

Renovating the place took more than a year. The biggest challenge, Wiens says, was figuring out how to insert an upper level into the existing framework and make everything watertight without bringing down the roof. ("It's much harder to repurpose and reuse an existing building than to build a new one from scratch," he concedes, irony apparently unintended.) There's a grand staircase bisecting the central atrium, made with recycled acacia and walnut. Twin monitors on the landing track global activity on the website. The paneling at the top of the stairs is made with two-by-four oak-flavor planks, discarded by the region's wineries. It smells good in here. Not like wood or wine, but familiar and clean. Like a freshly opened box of electronics.

Soules is visiting the company's suppliers in China this week, but Wiens is at his second-floor "desk." It's a treadmill set to walking pace, facing a high-top table holding a stack of outdated software manuals, repurposed as a platform for his laptop.

Wiens doesn't advertise it, but he's a devout Christian. Jen Wiens, iFixit's company chef, wasn't sure what to make of her future husband the first time they met, in Bible class–an insistent chatterbox, a voracious reader (later she would learn that he listens to audio books at double speed), a man given to big ideas and noble pronouncements. "I worked at a law firm downtown," she says. "I was always pretty tired from a 14-hour day. He would sit next to me and just keep talking. He was always really excited. Eventually, I decided maybe I should pay attention."

One of the first times they hung out together, Kyle told Jen that he wanted to change the world. He was still in college, still working out the details of his big vision for "fighting the growth of disposable culture," as he would write years later in iFixit's employee handbook (a 50-page manifesto illustrated with drawings lifted from a 1903 edition of the Boy Scout handbook), "promoting sustainable design, defending ownership rights, and shedding light on the devastating effects of electronic waste." Kyle wasn't quite there yet, though it was clear to Jen even then that when Kyle talked about changing the world, he meant something more than disrupting some tiny corner of the tech industry and making a lot of money for himself. "I knew where he was going," she says.

Where he was going, of course, was this business that would eventually infuriate Apple. But it would also thrill a few enlightened corporate allies–notably Patagonia, which partners with iFixit to help fulfill the lifetime guarantee it offers on all branded gear. "We're really impressed with their ethos," says Nellie Cohen, Patagonia's "worn wear" program manager.

In some ways, iFixit is a conventional success story. It's made money, certainly, though not as much as it could have if that had been the main goal all along. One reason its founders stopped applying for inclusion on the Inc. 5000 several years ago, according to Wiens, is they weren't interested in hearing from any more potential investors. "I think we're both scared of the responsibility to grow and make money at all costs that that would bring," says Soules. And already iFixit has had far more impact, in its own industry and beyond, than companies many times its size–remember, it reached 94 million do-it-yourselfers last year, and has trained thousands of technicians scattered across the U.S.

"I can't think of anything else as exciting as this or as needed," Wiens says. In a world marked by a huge economic divide, he is convinced–as well as convincing–that iFixit can help make owning technology more affordable while creating opportunities for independent repair shops. Add to that the environmental benefit of throwing less stuff away, and maybe the human benefit of making us all just a little bit happier.

One of Wiens's favorite books is Matthew Crawford's Shop Class as Soulcraft: An Inquiry Into the Value of Work. Crawford, a research fellow at the University of Virginia, has an undergraduate degree in physics and a PhD in political philosophy. His book ties all that together with lessons learned in his other career, as a motorcycle mechanic. "We evolved to be tool users," Crawford says. "What people are looking for is that basic experience of individual agency, to see the effect of your own actions and take care of your own shit."

That Wiens and Soules have created a booming business that can help with that? Very cool.

You gotta fight for your right to repair
Eight states are mulling legislation that would thrill iFixit–and anger Apple.

The first car I owned was a 1970-something Ford Maverick. When you opened up the hood, it was easy to do whatever you had to do–new plugs, new belts, oil change. Cars today are packed to the gills with circuitry and software. But that doesn't mean they're unfixable by anyone other than the manufacturer, despite what car companies would have us believe.

A set of screwdriver heads, waiting to be mounted on an iFixit-branded handle. On their first day at iFixit, new employees are given a desk. There's one catch: They have to assemble it themselves.CREDIT: Shaughn and John
Such was the impetus behind Massachusetts's Right to Repair ballot initiative of 2012, which voters approved by 86 percent to 14 percent. It gave car owners and independent repair shops access to the same diagnostic tools, repair manuals, and firmware that licensed dealers have.

Now lawmakers in eight states are pursuing legislation that would extend the concept to cover computers, smartphones, and tractors. "Repair is impossible without access and information," says Gay Gordon-Byrne, executive director of the lobbying firm Repair Association. One such bill was introduced in January by Lydia Brasch, a state senator for a rural district in northeastern Nebraska. She's tired of driving 80 miles to Omaha–to the only Apple store in Nebraska–to get her computer fixed. Her husband, Lee, is a fifth-generation corn and soybean farmer who's had similar issues with his $300,000 John Deere combine. (John Deere, says Gordon-Byrne, is "the Apple of farming.")

Apple, which did not respond to multiple requests to comment for this story, is not happy with what's happening in Nebraska–and Kansas, Minnesota, New York, Tennessee, Illinois, Massachusetts, and Wyoming. Recently, the company sent a delegation to the state capitol in Lincoln to have a word with Brasch. Apple's lobbyists were "respectful," she reports. They offered to back off if she exempted smartphones. Then they tried to scare her, warning if the bill passed, Nebraska would be "a mecca for hackers and bad actors."

But Brasch isn't buying it. "How many billions do you need?" she wonders. "There should be a little piece of the apple for the rest of us to share."

If I can do it, you can do it
I put one of iFixit's kits to the test, on my busted up old iPhone.

My work-issued iPhone 5C worked fine until one day it didn't. The screen fizzed out. No cracks in the glass, just a dense net of wavy vertical lines, rendering the display unreadable. Apple says that its phones should last three years. Mine made it two and a half.

By then, the warranty had expired, which might have bothered me if I were paying, but I wasn't. Work sent me a replacement and the 5C went into a drawer, where according to a study sponsored by SellCell.com, a reseller, some $13 billion worth of old cell phones reside.

Then I heard about iFixit and I wondered: Could a doof like me really fix my old phone? I was encouraged to learn that the 5C earns a reparability score of six from iFixit, on a scale of one to 10, which isn't bad. (My new Galaxy S6 Edge only gets a three.) And that my specific job, a front panel replacement, involved 32 steps, would require 30 minutes to an hour to complete, and had a difficulty rating of "moderate"–not "easy," but not "very difficult" either. I ordered the full kit, parts, and tools, for $54.95, plus shipping.

The first thing I did when my package arrived was watch the six-minute tear-down video on iFixit's website. Then I dove into the illustrated instructions. Step 12, removing the four infinitesimally small Phillips screws that secure the front panel assembly cable bracket to the logic board, caused me the most anxiety. The screws look identical, but they're not. "Accidentally using the 3.25 mm screw or the 1.7 mm screw in the bottom right hole will result in significant damage to the logic board causing the phone to no longer boot properly," I read.

I wasn't certain at the time that I hadn't made that mistake. (I recommend clearing off your workspace before you begin; a magnetic mat would have been helpful too.) Still, I persevered. After reinserting the last two "Pentalobe" security screws (Apple nomenclature) that seal the case, I pushed the power button, held my breath, and beheld with pride a glowing screen. My old 5C, good as new. I showed my wife. 

 

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Apple may have more than 1,000 engineers working on augmented reality for the iPhone, UBS says

Investors should buy Apple shares because the company is making a big bet on augmented reality, according to UBS, which reiterated its buy rating.
"According to some industry sources, the company may have over 1,000 engineers working on a project in Israel that could be related to AR [augmented reality]," analyst Steven Milunovich wrote in a note to clients Tuesday. "Our work suggests that AR could be the next major innovation from Apple and that its competencies could make the company a winner … Augmented reality is an area where Apple could leapfrog competition in providing a superior user experience. This could result in sustained iPhone retention rates and more switchers."
Augmented reality is a technology that "overlays digital content on the real world through the device's camera view."
Milunovich raised his Apple price target to $151 from $138, representing 10 percent upside from Monday's close.
The analyst quoted Apple CEO Tim Cook comparing augmented reality innovation to the iPhone, saying, "I think AR is that big, it's huge." 

Milunovich cited how the company bought multiple AR technology companies such as PrimeSense, Metaio and RealFace. Milunovich thinks it's possible an early form of AR may be released with the iPhone 8 later this year.
"Apple appears more interested in AR [augmented reality], which connects people, than VR [virtual reality], which potentially isolates experiences," he wrote. "Apple may be well equipped to lead given its core competencies in hardware design and software/hardware integration as well as its large base of affluent iPhone and iPad owners."

— CNBC's Michael Bloom contributed to this story

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Hey, 32GB iPhone 7, I already hate you

The base-price iPhone 7, according to a recent report by The Wall Street Journal, will have an amount of storage that will make it usable. Not great, not amazing, not best in class, but usable. How exciting is that?

Well, it depends on your expectations. 

SEE ALSO: Leak shows iPhone 7 will likely have big camera changes

If you expect the iPhone 7, the latest and greatest Apple will have to offer, to finally catch up with every other post-2014 phone out there (even the Chinese ones which cost less than half the iPhone's price), then go celebrate. 

I expect the iPhone 7 to be among the best phones out there, and to achieve that, Apple would finally have to do something unexpected — even if it's so simple as jumping from 16GB base storage to 64GB for the cheapest option. 

At this point some of you may be dismissively waving your hand, thinking you can never please these tech journalists. But hear me out. 

Remember 2008? George W. Bush was still president of the U.S., USB sticks still came in 256MB sizes and smartphones were a new thing.
Apple first introduced a 16GB iPhone in February 2008. Remember 2008? George W. Bush was still president of the U.S., USB sticks still came in 256MB sizes and smartphones were a new thing. And that was the first-generation iPhone, upgraded a year after launch, mainly to accommodate users' ever-increasing hunger for storage. 

In 2012, with the release of the iPhone 5, Apple introduced 16GB as the base storage option. It was followed by iPhone 5S and 5C, then iPhones 6 and 6 Plus, then iPhone 6S and 6S Plus, and finally with the iPhone SE — all of which started with 16GB of base storage. 

UPDATE: July 6, 2016, 7:07 p.m. CEST Our reader Hrvoje pointed out that the first iPhone model that started with 16GB of storage was actually the iPhone 4, which came out in 2010. An 8GB variant of the iPhone 4 was introduced a year later, alongside the launch of the iPhone 4S. This is one of those times when I don't mind being wrong, as it further reiterates the point above. 

Hey Apple, when's the last time we had a pleasant surprise?
Apple has been waiting way too long to upgrade the storage, and it's time to double down. 32GB is not a disaster by any means — after all, most smartphones start there (though, in fairness, most of them also offer a sizable memory expansion via microSD memory cards). But apps are getting bigger, photos are getting bigger, videos are getting huge (try recording 4K video on a 32GB phone and see how far you'll get). Next year, all the flagship Androids will start at 64GB, mark my words. 

There's also the simple matter of being fair to your customers. Unlike most smartphone manufacturers Apple has a hump in memory storage between its cheapest and second-cheapest model. Currently, the iPhone 6S starts at 16GB, then jumps to 64GB and, finally, 128GB. Rumors have it that the iPhone 7 will come with 32GB, 128GB and 256GB memory options. 

But why the hump? Simply because Apple has traditionally been using its cheapest iPhone as bait to lure customers to buy the mid-range model. The somewhat sleazy practice became downright annoying when it became painfully obvious that 16GB of storage don't cut it anymore — sometime around the iPhone 6 — and then Apple did it again next year. 

Most importantly, iPhone's overall specs just feel weak. Yes, it's a great phone, but the current model lags behind basically all competitors in terms of every spec you can think of. RAM? The Samsungs and the HTCs and the LGs have more than the iPhone 6S's paltry 2GB. Screen resolution? 4K phones leave iPhone's Retina in the dust. Battery size? You can easily find phones with twice the battery capacity for half the iPhone's price. With memory prices constantly falling, at least upgrading the storage memory should be easy. You have to wonder if Apple likes to stay behind on purpose. 

It will happen, but when?
Rumors aside, I'm certain Apple will upgrade the storage for the cheapest iPhone 7. The company would get ripped to shreds by the press (and annoyed users) if it didn't. But with the rumors that the iPhone 7 will be far more evolutionary than a revolutionary upgrade, having it start at 64GB would be a really nice touch, instantly propelling it to the top of the smartphone chain when storage is concerned. Apple faithful have been waiting for their phone to be leading in some area for quite some time, and they deserve it. 

Here's the more realistic option, though: The iPhone 7 will start at 32GB, and so will the iPhone after that, and the one after that — until we collectively start pulling our hair and crying out for more storage. It's just Apple's way. 

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