Fast upgrade cycle in the smartphone industry and its impact

by February 18, 2020 0 comments

Amarjeet is an ‘Apple’ fanboy. Whether it’s the latest iPhone, Airpods for music or the Apple Pencil for his iPad, Amarjeet needs to get his hands on the latest offering from the Apple stable. There are millions like Amarjeet in India, who swear allegiance to some brand or another. While many are crazy about advances in telecommunication technology, others just want to be with the ‘it crowd’.

This rapid upgrade of devices, while great for the Information and Communication Industry (ICT) and their stock prices, has many economic and environmental repercussions that most consumers tend to overlook.

Do we need so many handset upgrades?

Let’s be honest, every handset worth its penny gets an annual facelift. At one point in time, these upgrades were revolutionary. They brought accessibility to various features such as browsable internet, better quality pictures, access to the Office suite, etc. Today, the biggest ICT brands are just pushing higher resolution cameras and curved edges in the name of an ‘upgrade’.

In contemporary times, the new features come from software and app upgrades and not from the hardware. The ever-popular apps – Facebook, Instagram and Twitter work just fine on any smartphone. Yet the marketing geniuses of handset manufacturers have millions queuing up for an upgraded handset that is slimmer by 0.2 millimeters or is available in that mystic icy blue colour.

Do these minor tweaks and changes warrant a whole new production set-up? Not really, but manufacturers do not want to risk losing mind- and wallet-share among the clutter in the market. As per a CyberMedia Research report, based on the analysis of over 200 million mobile users across India, an estimated 70% of the users switched handsets during the second quarter of 2018. Of these 60% were upgrades or replacement of the existing handsets. This makes smartphones seem like a new-age fast-moving consumer good!

The catastrophic carbon impact of lifestyle consumerism

A rigorous analysis by McMaster University found that the total carbon footprint of the ICT industry including desktop PCs, laptops, smartphones, and servers was 1% of the total Green House Gas Emissions (GHGE) in 2007. That ratio almost tripled by 2018 and will represent 14% of all GHGE by 2040. That carbon impact for comparison is almost half as big as that of the entire transport industry!

The same study states that by 2020 smartphones will be the single largest polluter from the ICT industry. The rare earth metals required for the manufacturing of handsets alone constitute about 85% of the device’s total carbon output. Goes without saying that bigger the phone the more the emissions.

Despite the recycling programmes run by major handset manufacturers, a miniscule percentage of handsets make it back. Apple states that less than 1% of its handsets are recycled, implying the precious resources that can be reused are lost or destroyed due to consumer callousness.

The economic impact

On the other spectrum, these fancy handsets come with a price-tag to boot. The proliferation of easy loan products and the availability of digital credit is making it extremely easy to flaunt the latest smartphone but is further burdening the average Indian with debt. The so-called ‘no-cost EMIs’ invariably come with a hidden cost in the form of the processing fee, convenience fee, etc. that appears to be lucrative, but increases the final cost of the product.

In effect, consumers are taking on medium- to long-term debt for a depreciating asset that is losing its value in the resale market and paying more for it in the long run, while willingly taking a hit on their credit score! We are not even going to talk about what happens when you default on these loans.

Play it smart

You don’t have to wage war against technology, just leverage it for a sustainable future. Opting for a refurbished smartphone is a smart step in that direction. To begin with, refurbished phones come at a fraction of the cost of a new-to-market handset. More often than not, it is affordable enough to purchase out of pocket without having to take on additional debt.

From an environmental perspective, by purchasing a refurbished phone, you are reducing the carbon footprint on two counts. Firstly, by saving on the emissions of a new handset – it is estimated that the carbon impact of buying a new phone is equivalent to charging and operating a handset for a decade! Secondly, using the existing resources and keeping it in circulation eliminates the need to discard or recycle the technology, again saving on the carbon output.

Additionally, refurbished phones from a reputable company are thoroughly inspected, serviced, tested and repackaged, awarding you the peace of mind and a warranty that your smartphone functions just the way it should.

As personal as it may seem, your decision to purchase a smartphone has a cascading effect across various social and economic spectrums. Let’s make choices that are good for the mind and on the wallet.

By Amit Sethi, Co-Founder, and CTO, Cashify

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