Why Is Dish Network Venturing Into Smartphone Repair Business?

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Dish Network (NASDAQ:DISH) recently announced that it is deploying a nationwide fleet of professional technicians capable of reaching any U.S. home or business to repair iPhones for nationwide consumers. Under this service, which will also be available to non-DISH subscribers, the company will provide door service of technicians to repair cracked screens and replace batteries in various models of  Apple’s iPhone. Dish plans to expand this service to include additional devices and smartphone accessories in future. This program falls under the Dish Smart Home Service, which provides television setup and installation, network setup and surround sound services. By bringing smartphone repair into this realm, Dish can generate additional revenues and also ensure that consumers are able to view “TV everywhere” without any disruption. The company’s streaming service Sling TV is available for viewing on mobile devices and this venture could support the streaming segment.

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To protect itself from the cord cutting trend, Dish network launched its streaming service Sling TV, which recently allowed subscribers to watch three streams simultaneously. As Pay-TV loses subscribers and viewers move to alternative streaming devices, smartphone is being increasingly used for video consumption and TV installation and set-up requests are declining.  According to Zenith Optimedia, the average amount of time people spend consuming online video every day will increase by nearly 20% in 2016, primarily driven by mobile devices.  Video consumption on mobile devices such as smartphones and tablets is forecast to grow by nearly 35% in 2016. Zenith Optimedia expects modbile devices to become the main platform for viewing online video in 2016, accounting for more than 50% of the time spent watching online video. These figures indicate that the future viewership of SlingTV will increasingly be on smartphones and hence Dish’s entry into this new venture appears to be a logical move.  While Dish does not have any prior experience in this field, the company believes that its strong network of technicians can deliver high quality services to consumers. According to IBIS World, the cell phone repair market has estimated annual revenues of $ 4billion and has witnessed strong growth due to the popularity of expensive but fragile smartphones. This market can witness a slowdown if consumers shift towards low cost phones where replacement would be preferred to repair.

We believe with this new venture, Dish is preparing for the future where smartphones might replace traditional TVs and online video consumption will exceed television viewing. The demand for repair of smartphones could be higher than installation of TVs or network set ups and this venture should enable Dish to stay in line with the changing trends of consumer behaviour.

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