Every year, device makers like Apple or Samsung debut their latest phones, promising longer battery life, thinner bodies, larger screens and more processing power—and then come back the next year somehow promising even more. Critics allege that smartphone makers are the latest to follow the trend of planned obsolescence, or the claim that manufacturers deliberately design their products with a short shelf life to encourage consumers to buy the latest model.
But the biggest driver of phone replacements these days isn’t outdated or broken hardware, but stagnant software, claims a leading smartphone analyst.
“In the old days, you would typically replace your smartphone when the screen broke,” Ben Wood, chief analyst and chief marketing officer at CCS Insight, a tech market research firm, said Monday at Fortune’s Global Forum in Abu Dhabi, during a lunch event hosted by Chinese smartphone manufacturer Honor. “We’re now seeing a new generation of people replacing their phones because the security patches stop.”
The user experience degrades significantly after that. “WhatsApp stops working, your banking app stops working,” Wood explains. “So we’re seeing a big push by the manufacturers to now offer five years or, even in the case of the latest Android-powered devices, seven years of software support.”
The smartphone market is coming out of a slump, with third-quarter sales down 1% year-on-year, according to data released from research firm Canalys. Consumers have scaled back their spending on consumer electronics following their COVID-era splurge. Cost-of-living concerns from rising prices are also pushing shoppers to delay spending money on big ticket items like a new phone.
But despite those headwinds, the mobile phone industry is still expected to sell 1.2 billion devices this year, Wood claimed. That's about 137,000 phones per hour.
That presents a huge problem: the waste from all the phones that get replaced. An estimated 5.3 billion phones dropped out of use in 2022. The valuable materials in those devices are either "lost" as they get stashed away in cupboards or drawers, or spur damaging environmental consequences as low-paid laborers in the developing world try to recycle them.
Wood noted—perhaps uncomfortably for those involved in the consumer electronics industry—that the best way that someone can lessen the environmental impact of a smartphone is to use it for longer. And that requires a change in how devices are priced, with phonemakers selling more premium models at a higher upfront cost.
Government regulations could also catalyze a push towards making the smartphone industry more environmentally friendly. The EU is pushing manufacturers to offer repair services to customers, for free at times, for a longer period post-purchase, noted Frank Holzmann, senior vice president, from TÜV Rheinland, a company which does testing and inspections. The EU “will force you” to comply, he said. (A handful of U.S. states, including New York and California, are also passing "right to repair" laws, which grant consumers and third-parties the right to repair consumer electronics from companies like Apple.)
Honor, is trying to break into the premium market currently dominated by Apple and Samsung. To achieve that, the brand is pushing ahead with foldable phones, devices that fold outwards, essentially doubling the screen size.
Honor was originally a low-to-mid-tier smartphone brand under Huawei Technologies, but the Chinese tech giant spun off the division in November 2020 following U.S. sanctions. To ensure the brand's "survival," Huawei sold Honor to a consortium of 30 companies backed the Shenzhen city government.
More than two-thirds of high-end mobile phone users are open to getting a foldable phone as their next purchase, yet are worried about durability and battery life, claimed Honor chief marketing officer Ray Guo. Honor’s latest phone, the Magic V2, can withstand about ten years of folding, he said.
Honor isn’t isolated from environmental demands from customers or regulators. “At this moment, [if] you want to establish a global brand, you have to put that ESG as first priority when you're trying to build a supply chain,” Guo said.
