Fortune Small Business Tech Edge

Want the biggest iPod in the world?

Ask this small gadget shop, which specializes in going where Apple won't.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

ipod.03.jpg
Rapid Repair retrofits old iPods with 240GB hard drives.

(Fortune Small Business) -- Like many consumers, John Mayberry was looking to upgrade his iPod. The IT technician had 50,000 songs stored on his computer, but his 60-gigabyte iPod maxed out at 12,000 songs. And Apple (AAPL, Fortune 500) wasn't helping. Last year the company discontinued its largest iPod, a 160GB model, citing concerns about its design. Currently the largest iPod that Mayberry can buy is 120GB - or half the size of his music library.

That was the cue for Rapid Repair, located in Kalamazoo. In February the startup began retrofitting old iPods with a new 240GB hard drive. The price of the procedure, $300, was the same as the cost of a new iPod, and having the device hacked broke its warranty. But Mayberry didn't care: He finally had an MP3 player equal to his music library. "I'll hold on to this one for a while," he says.

He wasn't alone. In the first two hours the service was available, Rapid Repair received 300 orders - more than its inventory could handle. One month later the company had solved its supply problem and upgraded 500 iPods.

The 1.8-inch hard drives, made by Toshiba, are of roughly the same dimensions as regular iPod hard drives. Rapid Repair clears around 25% profit on each installation. Thanks to swift advances in storage technology, the company appears to have tapped into a market for expanded iPods that the computer giant isn't serving.

"You couldn't have made this business happen 10 years ago," says CEO Aaron Vronko, 26.

In 2007, Vronko launched Rapid Repair with a business school classmate, Ben Levy. Both technophiles, they shared an aptitude for fixing broken cell phones and MP3 players. A business model was born: By 2008 the company had 15 employees and was repairing some 500 gadgets a week, mostly via online orders. Revenues totaled $3 million last year.

By this summer, Rapid Repair hopes to offer the same upgrade service for Microsoft's Zune and other MP3 players. The company's new focus on upgrades involved a major shift in strategy.

"People don't upgrade because their devices are a little beat up," says Dale Ford, an analyst with iSuppli, a research firm based in El Segundo, Calif. "It's more because they think, 'Wow, look at what these new devices can do.'"  To top of page

To write a note to the editor about this article, click here.




QMy dream is to launch my own business someday. Now that it's time to choose a major, I'm debating if I should major in entrepreneurial studies or major in engineering to acquire a set of skills first. Is majoring in entrepreneurship a good choice? More
Get Answer
- Spate, Orange, Calif.

Sponsors
More Galleries
5 travel spots for the young and curious Millennials like to go off the beaten path when they travel. From Havana to Taipei, here are top travel destinations for young travelers. More
The 5 hottest stocks of 2015 Netflix blew away the rest of the stock market during the first half of the year. Here's a look at the other top stocks of 2015. More
These cities have the world's most expensive beer The world's most expensive cities for beer range from European capitals to financial centers in Asia. These are the destinations where a pint will set you back the most. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play