...an opportunity to lower the overall cost of a PC and sell profitable extended warranties, said Sam Bhavnani, principal analyst with Current Analysis.
Savvy customers know from their television and vacuum cleaner purchases that extended warranties are usually not worth the extra expense. But PCs are far more complicated beasts that can be rendered inoperable by a virus even if the hardware covered under those warranties works as designed.
The warranty "opportunity"
Vendors are realising they can make money offering premium services through their own programmes. Dell, which has been knocked over the past few years for its customer service, now offers extended at-home and online services through its Dell On-Call services, said Lou Mabley, senior manager for Dell On-Call services.
Dell launched Dell On-Call last November to help customers with problems such as virus removal and networking for $49 in the first 30 days with a new PC. The service can be extended beyond 30 days for an additional fee.
Dell is also experimenting with a remote service called Tech Connect, which it rolled out to its Dell On-Call technicians, Mabley said. Consumers have access to in-home support through the service, as well as under certain warranties.
HP offers a metered calling card service called Smart Friend, which allows customers to call with security or networking questions, said Brent Potts, director of support planning and infrastructure. Smart Friend is similar to Dell On-Call in that it is designed to handle inquires beyond basic troubleshooting such as how to hook up peripheral devices to a PC, he said.
HP also unveiled its PC Tuneup service at the Consumer Electronics Show in January along with Smart Friend. PC Tuneup involves having a technician talk the customer through a series of tasks such as antivirus updates and the clean-up of temporary Internet files.
The need for PC support services is expected to grow as consumers hook up more devices to the PC and software takes on more roles, Geek Squad's Stephens said. Even though PC vendors are working to make business PCs more manageable, complexity in the home PC means more business for services like the Geek Squad.
But for many people, local service technicians remain the most accessible means of PC support. Timothy Lugosi has been running Pasadena Computer Works for more than five years, providing support services to Southern California residents. Most of his business involves repairing the damage caused by viruses, or setting up home wireless networks, he said. He charges about $75 an hour or flat rates for certain common jobs, depending on the customer's needs.
When services such as Geek Squad started moving into Southern California, Lugosi was nervous at first. But many of his customers have been turned off by the "big box" approach that he says Geek Squad and other large vendors take to PC support, and are looking for a more personal touch.
However, those big companies have their sights locked on the premium services market, since hardware margins show no signs of expanding, IDC analyst Healey said. As the technology behind remote services improves, PC vendors are likely to find services just as important as, and far more profitable than, their main business, he said.
