Report: Smartphone kill-switch could save consumers $2.6 billion per year
Technology that remotely makes a stolen smartphone useless could save American consumers up to $2.6 billion per year if it is implemented widely and leads to a reduction in theft of phones, according to a new report.
Law enforcement officials and politicians are pressuring cellular carriers to make such technology standard on all phones shipped in the U.S. in response to the increasing number of smartphone thefts. They believe the so-called “kill switch” would reduce the number of thefts if stolen phones were routinely locked so they became useless.
But carriers have resisted these requests and there are now bills proposed at the U.S. Senate, U.S. House of Representatives and California State Senate that would mandate such a system.
The report, by William Duckworth, an associate professor of statistics, data science and analytics at Creighton University, found most of the savings for consumers would come from reduced insurance premiums.
Duckworth estimated that Americans currently spend around $580 million replacing stolen phones each year and $4.8 billion paying for handset insurance.
If a kill-switch led to a sharp reduction in theft of phones—something supporters argue would happen because stolen phones would lose their resale value if useless—most of the $580 million spent on replacing stolen phones would be saved.
A further $2 billion in savings could be realized by switching to cheaper insurance plans that don’t cover theft. Not all consumers would make the switch, but Duckworth said his research suggests at least half would.
As part of the report, Duckworth contracted a survey of 1,200 smartphone users in February 2014 by ResearchNow.
It found 99 percent of consumers thought cellular carriers should allow all consumers to disable a phone if stolen, 83 percent thought a kill switch would reduce smartphone theft, and 93 percent believed they should not be asked to pay extra money for the ability to disable a stolen phone.
Duckworth said he was surprised by the overwhelming support for a kill switch.
“I thought a high percentage would say yes, but it was a little surprising and maybe a bigger number than I would have guessed,” he said in a telephone interview.
“I view losing a credit card as a similar frame of reference. If it is stolen or lost, I can call the credit card company and get it canceled and they can issue a new one. There is safety there,” he said. “My smartphone has tons of information and accounts in there, so the idea that I could call and say ‘kill it’ is a very reasonable thing.”
Duckworth’s report is likely to give a boost to supporters of a kill switch, who also face resistance from the CTIA, a Washington-based lobbying group that represents the telecom industry.
Two executives from companies that sell insurance to smartphone users, Manny Becerra, president of the mobile services business at Assurant Solutions, and Bret Comolli, chairman of Asurion, also sit on the CTIA board of directors.
The CTIA’s answer to rising theft has been a database that blocks stolen phones from being reactivated by new subscribers, but the database only covers a handful of countries, meaning stolen phones can still be used in nations outside of the system. Earlier this year, the CTIA acknowledged the limited international reach was a weakness.
“This survey confirms what we already knew to be the case, that wireless consumers would benefit tremendously from the implementation of theft deterrent technology on all smartphones,” San Francisco District Attorney George Gascon said. “Beyond the financial benefits to consumers, however, the human costs of not implementing this technology on all smartphones are simply too great.”
Gascon has been at the head of efforts to mandate a kill switch.
The CTIA could not immediately be reached for comment.
According to data from law enforcement agencies, half of all robberies in San Francisco in 2013 targeted a smartphone. In New York it was 20 percent, a rise of 40 percent on 2012, and in London around 10,000 smartphones are stolen each month.