Using blockchain technology to improve customer experience and drive sustainable outcomes for the mobile phone industry

Mobile devices have become an essential part of our lives and, whilst almost every person in the world over the age of 14 already has one, the industry is still aiming to sell 1.5bn smartphones this year.

Smartphones is the largest consumer product category ever created in history and the first $1tn category; however the increasing demand for new devices has contributed to a significant environmental problem - electronic waste.

The mobile phone industry is one of the major contributors to this waste, with most of the environmental impact occurring before a new device is even taken out of its box.

According to GSMA (the mobile carrier industry body) the production of a single smartphone can result in emissions of up to 85 kilograms of carbon dioxide equivalent (CO₂e), while a used device creates emissions of only 10 kilograms.

Extending the lifespan of a mobile phone from 18 months to four years could result in a 40% reduction in CO₂e emissions; a longer lifespan means fewer new phones need to be produced, thereby reducing emissions from manufacturing, transportation, and disposal¹

At Mobile World Congress 2023 (MWC), one of the main topics amongst industry leaders was how the mobile industry can create a circular economy for devices, extending their life span and reducing waste. These discussions covered topics such as sustainable mobile devices, incentives for second-life devices, supply and demand challenges, and the importance of collaboration in creating a more circular economy. All agreed on the need for the mobile industry to move from a take-make-waste model to a circular, more sustainable approach.

Turning barriers into opportunities

However, there are several barriers that would need to be overcome to make this a reality:

• Standardization: Each manufacturer currently uses its own proprietary systems and software, making it difficult to track a phone's history and ownership.
• Consumer behaviour: Many consumers still prefer to buy new devices rather than used, even if they are more expensive. Increasing awareness of the environmental impact of their purchasing decisions and incentivising them to choose used devices, would be crucial to the success of this initiative.
• Trust: How can a consumer trust the value and performance of a second-hand device if they don’t know its past or who had owned it? Has it been repaired badly? Does it have non-genuine parts? Will the battery fail? How much has it been used? How old is it?

No one industry player has a clear process to satisfy these questions and as a result, new devices are purchased, often when a good quality used device would meet the customers’ needs.

Blockchain Technology

One critical way to achieve this goal is through blockchain technology, which could track the lifecycle of a device, including its manufacturing, distribution, ownership and disposal. Creating a secure and immutable record of a device's history, would increase consumer trust and adoption of used devices and enable their sale at higher prices.

Furthermore, by tracking the lifecycle of a device, it’s possible to streamline refurbishment, recycling and resell processes, leading to faster turnaround times and lower costs. These efficiency savings would enable more opportunities for global carriers, OEMs, companies and individuals to participate in the circular economy.

That said, this approach is not without its challenges; the technology is still relatively new and untested on a large scale and finding ways to make the process, which is very energy-intensive, more energy-efficient, is critical.

Regulation, Integration, Education and Collaboration

There are several requirements, both technical and operational, that would need to be implemented to enable blockchain in the mobile industry;

• Regulation: The government would need to create a regulatory framework for the traceability of devices, ensuring that the data collected was secure and privacy compliant
• Integration: Mobile carriers and retailers would need to integrate blockchain technology into their existing systems to create a seamless and transparent experience for customers
• Education: Consumers would need to be educated about the benefits of buying and selling used devices and educated on how blockchain can provide a higher level of security and trust
• Collaboration: Regulatory frameworks would need to be put in place to ensure that the data collected is secure and privacy compliant. Such frameworks would be crucial to assist in building consumer trust.

To ensure these frameworks were secure would require investment from OEMs and carriers, the cost of which would far outweigh the reputational risk and impact incurred from a data breach.

The creation of a joint OEM-carrier funded model to invest in the tech, its framework and control could be the quick solution to bringing this model to life over the coming years.

Far-reaching Potential

The implementation of blockchain-enabled traceability for used smartphones has the potential to make a significant impact on reducing electronic waste in the mobile industry.

For customers, buying a used device with a blockchain-verified history provides greater confidence in the quality and authenticity of the product. The ability to sell a used device at a higher price also incentivises customers to take better care of their devices, leading to a longer device lifespan and reducing the environmental impact. For mobile carriers, retailers, and other players in the industry, there are potential new business opportunities to be had.

Additionally, blockchain can enable more efficient and environmentally friendly recycling programs, ensuring that electronic waste is disposed of properly and device tracing could see carriers and OEMs increasing profitability significantly with quicker turnarounds in device refurbishment, repair and logistics.

For blockchain to be successful in the mobile industry, the government, mobile carriers, retailers, and consumers need to work together to create a regulatory framework and integrate this technology into their existing systems. Doing so will reduce electronic waste, extend the life span of mobile devices and create a more sustainable tomorrow for all.

Footnotes:

¹Accenture