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Global Economy

Mobile phones are rarely exchanged

According to a study by the credit insurer Euler Hermes, the replacement cycles for smartphones are becoming longer and longer. "Consumers have become more sustainable in recent years and are now holding on to their smartphones much longer," said Milo Bogaerts, head of Germany at the Allianz subsidiary.

There are clear differences between the nations. "Europeans currently exchange their devices after around 40 months on average – that's about a quarter longer than in 2016." In the USA, consumers are currently changing their smartphones after around 24 months – but there, too, the useful life of the devices has increased by 30 percent since 2016.

Three-digit billion sales at risk

"The replacement cycles will also become longer in the coming years. This will not remain without consequences for the industry," predicts Euler Hermes industry analyst Aurélien Duthoit. "By 2025, cumulative sales worldwide totaling $134 billion are at risk." Above all, smaller providers are at risk instead of the heavyweights such as the currently three largest manufacturers Apple, Samsung and Xiaomi.

This shows more and more that it is not Corona that has led to a short-term slump in new purchases, but that the longer service life of smartphones is a sustainable trend. Technical progress also plays into the hands of long-term users. Smartphones have become so good in recent years that they can easily be used for many years without becoming obsolete.

5G devices lack "killer feature"

At the same time, there is much to suggest that the times of the really big technological leaps are over for the time being. This in turn was once the most important driver for new acquisitions. According to the Euler-Hermes expert Duthoit, the relatively new and still not very widespread mobile standard 5G should not be suitable as a “booster for new record hunts in the smartphone industry”, at least for the time being.

"So far, the absolute "killer function" has been missing from 5G devices," was the analyst's verdict. "That could explain the lack of consumer enthusiasm for 5G devices, along with sometimes disappointing mobile data speeds compared to theoretical capacities." Conversely, this means: "Whoever brings this killer function to the market first will catapult themselves to the front in one fell swoop."

EU plans "right to repair"

Meanwhile, politicians also want to extend the useful life of smartphones in the interests of sustainability. The EU plans to introduce a "right to repair" for mobile devices in summer 2022. This should include the manufacturers having to stock spare parts for their smartphones for several years. However, the Digital Europe association is opposed to the plans of the EU Commission. The industry association includes Apple, Google, Huawei and Samsung.

In an open letter to the EU Commission, non-governmental organizations (NGOs) calculated how much could be achieved with more sustainable devices: If the average lifespan of mobile phones were increased to ten years, this would save 6.2 million tons of CO2 annually. That would reduce the climate footprint of the devices by 42 percent.

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