ST. PETERSBURG, FL -- Jabil is leveraging its after-market services to gain a greater share of the Internet mobility market.

That was one of the revelations last week from CEO Tim Main, who added that traditional EMS has become an entry point to other, higher-margin businesses, including after-market services.

"That traditional paves the way for success in the rest of our market. [It] really paves the way for success and the rest of our businesses contributes substantially to our technical know-how in managing complexity."

Jabil also has become a leading supplier to the cellphone industry, supplying product to eight of the top 10 OEMs in the smartphone space. (GT and Huawei are the exceptions because, the firm says, "We do not know how to collect payment from them.")

Being an EMS provider to the handset market means not just building SMT boards but servicing the end-product, sometimes for years after it was sold.

"The service to life cycle is a lot longer typically two to three times longer than the production life cycle," says Hartmut Liebel, executive vice president of After Market Services. "In 2006 and 2007 the Motorola Razr phone probably [had] about 40% to 50% market share and has been long out of production [yet] we are still servicing it." He alluded to the potential new business streams in the Internet mobility products such as tablets, where knowledge of smartphones could be leveraged.

Adds Main, "After-market services has moved way, way beyond deeper repair. They are operating retail outlets in Turkey. They have telecommunications repair operations in Pakistan. They can take a British telecom product that was built 30 years ago, bring it back, find a person, put it back in service."

Liebel says many customers are trying to reduce the number service providers they use from hundreds to just a handful, and typically proximity to the customer counts, which gives Jabil a competitive edge. "We are one of the very few companies positioned to consolidate and bring a very vast global network down to just one or two major, major providers," he said. "A significant trend in the service supply chain to bring the service much closer to the service point so you probably maybe even have a very personal experience where if you walk into maybe a retail environment that you would like to have your issue resolved right there. Mobile customers are focusing on using services as a customer retention tool."

While competitors Foxconn and Flextronics rely on high volumes, Jabil, the world's third-largest contract manufacturer, differentiates itself with this batch approach, Main indicated. Some 70% of Jabil's total output is built in quantities of 100 or fewer, he revealed.

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