Guilty pleasure: The dark side of smartphone upgrades

Imagine that you are just about to seal the deal on a shiny new $600 laptop when the sales person tells you that the battery can’t be replaced. If the unit fails, he says, you throw the laptop away. To protect yourself, you can pay $120 per year for replacement plan insurance, or after the factory warranty ends in 12 months you’ll have to buy a new unit at full retail price in the event that the battery goes south.

Would you still buy it?

This is the situation I found myself in this week as I shopped for a new smartphone. My Galaxy Nexus has a replaceable battery, and over the past two years I’ve replaced it twice. But of the five new smartphone models I am considering, only one, the Samsung Galaxy S4, has a user replaceable battery. With the others, if the battery dies and the phone is out of warranty you buy a new phone at full retail price and just throw the old one away. You can't even send it in to the manufacturer to have one factory installed. (Yes, it's true. I double checked this with two Verizon Wireless sales people and through an online chat with sales support.) From what I've been able to find out, a typical battery lasts for about 300 to 500 charge cycles, or between 10 and 24 months.

Barbara Kyle, National Coordinator at the Electronics TakeBack Coalition, is appalled. "It’s a ridiculous waste of resources to make a phone for which you can’t change the battery. If anything, we need to see the manufacturers move in the opposite direction – to make it much easier to repair used phones, so we can prolong their lifetimes," she said in a recent email exchange. While taking back old phones for recycling is good, reusing old phones is a much better option, she says, and the battery issue just makes that more difficult -- especially since there's no secondary market for the replacement battery, which is usually a nonstandard, proprietary design.

I am sure that the thinking behind this design move is that people throw the phones away after two year anyway, so why not? And carriers encourage this behavior by hiding the true cost the customer is actually paying for the phone. You may only pay a penny up front for an older model, or $49 for something like the Moto X. But you're not getting a $600 phone for free. You'll pay the rest of the cost through the subsidy built into the monthly fee you pay during your two-year contract.

And now you can throw away your phone even faster

And now, thanks to Verizon Wireless’ Edge program, you can pay nothing up front -- it's free! -- if you agree to add $20 to $30 to your regular monthly payment. Doing so also entitles you to throw away your old phone and upgrade to a new one every 12 months. With no down payment, and the entire cost of that new phone buried in your contract, you might as well upgrade, right?

Encouraging people to throw away perfectly serviceable mobile phones every year rather than every two-- essentially doubling the rate at which phones are discarded -- is certainly not a green way of doing business. The guilty pleasure of getting a new phone every year - or even every two -  is a huge problem that's getting bigger, not smaller.

According to the Environmental Protection Agency, we threw away 152 million phones in the U.S. in 2010 (the latest year for which statistics are available). Just 11%, or 17.4 million of those, were recycled. The other 89% ended up in incinerators and landfills, where e-waste makes up nearly three quarters of the toxic heavy metals. Meanwhile, we’re churning phones faster. According to Gartner 1.9 billion cell phones will be sold worldwide in 2014, up from 1.2 billion in 2010.

All of this doesn't sit well with Kyle. "When a carrier like Verizon encourages people to upgrade their phones every year, that carrier should only do so if the used phone is refurbishable, and if they will take responsibility for making sure that the used phone will be refurbished for a second lifetime. Otherwise, they are basically encouraging their customers to trash perfectly good phones," she says (Verizon Wireless does offer a trade-in plan for qualifying models in good condition, and has a box in each store where old phones can be deposited for recycling, with proceeds donated to charity).

So there you have it. A laptop typically lasts about four years. But a smart phone, for which you may end up paying more over the contract term, is old news at two years. As if to emphasize that point, Google recently announced that the newest version of Android, Kit Kat, won’t be available for my device. According to JR Raphael in his recent Computerworld blog, Android 4.4 upgrade list: Is your device getting KitKat?, "The company says the phone 'falls outside of the 18-month update window when Google and others traditionally update devices.'" I recently upgraded my five-year-old MacBook Pro to the latest version of OS X. But my Galaxy Nexus, a $650 mobile computin device that’s barely two years old, has been abandoned by Google, which controls the Andoid OS. And even if Google did support the Nexus, it's unlikely that my carrier would provide the update to my locked phone.

An unsustainable business model?

But it's possible that the current state of affairs is starting to change just a tiny bit. Consider:

  • Moore’s law isn’t making chips cheaper anymore, and that will make innovation in the tiny smartphone form factor without breaking the bank more challenging.
  • More people are trading up from one smartphone to another, and unlike upgrades from a feature phone, the benefits are far less dramatic. Consider the new iPhones, which sold well but were greeted with a collective yawn in terms of innovation. As for the Android world, JR Raphael put it succinctly : Welcome to the ‘So what’ era of Android phones.
  • The subsidized contract model is starting to give way, ever so gradually, to pay as you go. People who buy off contract are paying the full cost of unlocked new phones like the new Nexus 5 or Samsung Galaxy S4. And carriers are starting to cave in to pressure to allow the phones they provide to be unlocked, which should allow users to switch carriers more easily once their contract phones are bought and paid for.

Once people see the full cost of the new smart phone they're buying, the value of incremental improvements can be balanced against the true impact on their wallets. If people have to pay the full price of the phone and there’s no compelling reason to spend $600 for a few incremental improvements, they’re likely to keep what they have longer.

After all, if it’s really just another iPhone, why spend the money?

Copyright © 2013 IDG Communications, Inc.

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