Next week smartphone manufacturers will join mobile operators, technology providers, vendors, and content owners at the Mobile World Congress in Barcelona to focus on such critical themes as 5G, IoT, AI, cloud and 6G. One of the major themes spanning all discussions is likely to be sustainability. The telecoms industry has long focused on reducing emissions: 5G networks, for example, are designed to minimize energy usage. However, perceptions of the industry’s carbon impact may differ – after all, the smartphone is the most popular device, with over 4.5 billion in active use, and 1.4 billion expected to be shipped in 2022. Smartphone manufacturers have a myriad of approaches to sustainability, from recycled packaging, to phasing out chargers, to long-term net zero commitments. But crucially, it is hard for the average customer to quantify the true impact of these approaches. People will rightly ask the question – is this making a difference, or is it marketing spin?
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That base of 4.5 billion smartphones will likely generate 146 million tons of CO2 or equivalent emissions (CO2e) in 2022. While that’s less than half a percent of the 34 gigatons of total CO2e emitted globally in 2021, emissions can be further reduced. That’s why making smartphones sustainable is a key trend in Deloitte’s 2022 Predictions—and why the smartphone industry should consider their options when it comes to the smartphone business model.
Greening the smartphone value chain
Manufacturing accounts for almost all of a smartphone’s carbon footprint in its first year of use, with 95% of carbon emissions coming from manufacturing processes, including the extraction of raw materials and shipping. As such, moving the needle on emissions—up and down the value chain—is certainly achievable if smartphone manufacturers invest progressively in:
- Using recycled materials. Reusing materials means less reliance on mining1—an incredibly carbon-intensive activity. Tin can be reused for circuit boards, cobalt for batteries, and aluminum for enclosures. Technology now exists to even reuse rare-earth elements, which, up until a few years ago, wasn’t considered commercially viable due to their small size.
- Making facilities energy-efficient. Smartphone manufacturers need to take note of energy use along their value chains, which can make a difference in overall smartphone emissions. Take the production of the integrated circuits used in smartphones. Up to 30% of a semiconductor fabrication plant’s operational costs comes from the energy needed to maintain constant temperature and humidity.
- Encouraging renewable energy. This relates to owned facilities as well as to third parties to which vendors outsource manufacturing. Vendors may need to convince and assist their outsourced supply chain to migrate to renewable energy sources such as wind, solar, and hydro.
Extending the life of the smartphone
The bulk of smartphone emissions come from new devices, with 1.4 billion phones expected to be manufactured and shipped in 2022. In fact, a brand-new smartphone generates an average of 85 kilograms in emissions in its first year of use. Clearly, then, the key to reducing emissions will be to extend the lifetime of individual phones.
This does not mean reducing the number of smartphones in usage—but rather each smartphone would be used for longer, regardless of the number of individual owners during its lifetime. Even accounting for the CO2e emissions from refurbishing and shipping a used phone, prolonged ownership, whether by a single or multiple owners, reduces emissions overall.
To prolong the life of a smartphone, vendors need to think beyond physically refurbishing used devices, though. They need to address software support and security – specifically adapting the underlying operating system to work with devices of multiple ages. This has a major impact on the resale value of a device. It’s hard to sell a phone that’s no longer useful.
Vendors also need to provide regular security updates, which, depending on the vendor, can vary from three to five years. In some regions, regulations may require smartphone vendors to start providing security updates for five years. But we expect that by 2025, competitive pressures may have made five years of support commonplace for flagship models. As people get to know their device lifecycles better, it will become more advantageous for smartphone manufacturers to prove longevity.
Changing the business model
According to Deloitte’s 2022 CxO Sustainability Report, organizations looking to accelerate their climate actions will need to embed climate considerations into every part of the business, which may require a fundamental business model transformation. Longer smartphone lifetimes would undoubtedly reshape how the smartphone industry generates revenues and profits. But this doesn’t have to be bad news for smartphone makers. There are ways to keep longer lifespans from impacting the bottom line, including:
- Create a feature out of “longevity”: Smartphone vendors could justify higher-priced devices if they were to convince customers that their phone would last longer, and perhaps more importantly, would hold a lot of residual value if they ever decide to trade it in.
- Grow revenue from sources other than device sales: Some of these sources could be media services and application stores as well as online storage—the demand for which will grow steadily over time as photos and videos accumulate.
- Sell complementary hardware with lower emissions per unit than smartphones: This includes items such as Bluetooth headphones, whose sales are forecast to grow by 35% in 2022.
- Collect commissions: Vendors can do this via insurance packages as well as financial products related to the purchase or lease of smartphones.
A sustainability ripple effect
Reaching decarbonization targets often requires companies to change the way they do business. However, the ultimate payoff can be much bigger than the smartphone industry alone. Not only can that payoff involve fewer emissions from smartphones, but it can also start a trend that’s taken up in other device categories, such as laptops and tablets. Innovations that reduce emissions for smartphones, such as using recycled materials, could be applied by the same vendor to other products in its portfolio.
This is an even more important factor when you consider the dominance of smartphones in the device market: the number of smartphones globally in 2022 is expected to be more than triple the number of computers and laptops and more than seven times the number of tablets. With smartphones leading the way, increased sustainability across categories shouldn’t be far behind. And every little bit helps.
To read more about technology trends, check out Deloitte’s Predictions 2022 or visit the Deloitte Technology, Media & Telecommunications practice page on Deloitte.com.
