By Kim Jae-won
U.S. data storage company Seagate Technology is considering selling warranty services here for its hard drives, guaranteeing to recoup damaged data.
The company sells extended warranties in the U.S. and wants to offer the same service here, sources say. In the U.S., manufacturers can sell the warranties once the free, guaranteed warranty expires.
"Seagate is considering offering hard disk warranty services for Korean customers," a source said Friday. "The company is weighing between launching it on its own, or cooperating with insurance firms."
The source said Seagate planned to have talks with insurer AIG over a possible collaboration.
AIG Korea said earlier this year it was considering launching extended warranty services to cope with changing business circumstances. The local unit of the American International Group said it had offered one-year warranties for 10 major consumer electronics, including refrigerators and washers, to manufacturers and consumers, but sales had been sluggish.
Seagate's move comes a few months after the Financial Services Commission (FSC) said it would boost the appliance warranty market by letting retailers sell extended warranties to customers from July.
But the FSC made it clear that Seagate should have business ties with an insurance company that has a license to run the business here if it wanted to introduce such services in Korea.
"Manufactures can only provide free warranty services for customers," an FSC official said. "If they want to sell them, they can do so by cooperating with a licensed insurance firm."
With the new regulations, electronics retailers such as Lotte Hi-mart, department stores and discount chains can sell extended warranties for refrigerators, laptop computers, tablet PCs and hard drives, among other things, after being registered as insurance sales agencies.
Such services have not been popular here due to strict government regulations on insurance sales agencies. But in the U.S. and Canada, it is common for electronics retailers, such as Best Buy and Future Shop, to sell extended warranty products to consumers.
The FSC said extended warranty insurance products will be offered to consumers in addition to standard warranties on new items provided by manufacturers. Local electronics manufacturers usually give one-year warranties to consumers.
Insurance companies are set to develop extended warranties for consumer electronics. They said premiums may differ by warranty period, but did not unveil how much they will be. The warranties will cover mechanical failure from owner abuse as well as normal use.
Seagate is the world's second-largest data storage company by market share. The California-based company is listed on the NASDAQ with a market cap of about $18.6 billion.