Have you kept up with this week’s smartphone news? Smartphone shipments declined. Again. Apple’s iPhone revenue is dropping. Apple added a “software lock" to discourage you from replacing your iPhone battery. And smartphone manufacturing is fleeing China.
This is all presented as bad news. In fact, it’s all good news. Here’s why.
Smartphone shipments fall
IDC reported last week that smartphone sales fell by 3.6% (to 331.2 million units) in Q2 and that global shipments declined for the seventh successive quarter. (Smartphone shipments declined in China for the ninth consecutive quarter, according to Canalys.)
Smartphone shipments for this year will total 2.2 billion phones, which is a decline of 3.8% year over year, according to Gartner, which called it the “worst decline ever” for smartphone sales.
Worst decline? How about best decline?
As a species, we manufacture way too many smartphones. Only about 2.5 billion humans own smartphones. Manufacturing and shipping 2.2 billion phones in a single year means that nearly 90% of smartphone owners will get a brand-new phone.
Smartphones are good, a huge benefit to humanity. But smartphone manufacturing is bad. Some 80% of a smartphone’s lifetime carbon footprint happens during manufacturing. The mining required to extract aluminum, cobalt, copper, gold, palladium, platinum, silver, tantalum, tin, tungsten and other metals is extremely resource-intensive.
Ideally, phones would last for many years and be reused for the functional life of the phone, which could be 15 to 20 years. Instead, we’re building and buying way too many phones and discarding them much too soon.
The overly rapid adoption of new phones and insufficient reuse of used phones lead to incredible waste, resulting in toxic metals in landfills, microplastic in the ocean and dangerous disassembly for recycled phones, often by children.
What’s driving the decline in smartphone shipments and manufacturing is good news: People are hanging on to their smartphones longer. The average length of time iPhone users are holding on to their phones before upgrading, for example, has moved from three years to four, according to one analyst.
This is fantastic news. We should all be rooting for that number to increase to five years. This would benefit the environment and our pocketbooks — not to mention the workloads of IT people, who would have a net decline in the number of devices they would need to onboard.
Another factor in the smartphone decline is that buyers are rejecting overpriced flagships. This rejection puts price pressure on the major smartphone manufacturers, forcing them to make better phones cheaper.
The reason the tech press interprets declining phone sales as bad news is an excess of access journalism — journalism that prioritizes access to rich, famous or powerful people over objectivity or integrity. It’s something of a pandemic in technology journalism, causing reporters to be more invested in corporate profits than user interests or environmental concerns.
Apple iPhone revenue drops
Related to the ongoing decline in overall smartphone shipments is the decline of smartphone sales, earnings and shipments by the smartphone profit leader, Apple. Earnings from iPhones fell 12% from Q2 2018 to Q2 2019, according to Apple’s recent earnings report. Also noted widely: Smartphone earnings dropped to become less than half of Apple’s revenue.
As with smartphones generally, Apple’s “bad news” happened mainly because Apple phones are being used longer, and Apple customers are rejecting ridiculously high iPrices.
This is great news, especially if you’re an Apple fan. The pressure is on Apple to figure out how to charge customers less money for their future iPhones, and to work harder on new lines of business (like the new Apple Credit card, future Apple smart glasses and possibly an Apple car). More Apple stuff at lower prices — what’s not to like?
Apple discourages third-party battery replacement
Speaking of Apple and the environment, the company has been slammed by right-to-repair activist company iFixit and the Art of Repair YouTube channel for adding software locks on iPhone batteries that discourage third-party repairs.
First of all, the reaction is overblown and the story is being misperceived by some as a move that prevents, rather than discourages, repairs.
Specifically, new iPhones appear to prevent unauthorized batteries — or Apple batteries installed by an unauthorized installer — from accessing battery health data. Unauthorized batteries still work, but they won’t inform the user about battery life or health. Instead, you’re given a message urging you to have Apple service the phone. That’s it!
Certainly, Apple deserves criticism for opposing the right to repair and for making its products difficult to repair. But alerting users when they have an unauthorized battery may save lives. Apple’s new software lock system is good news, not bad news.
Battery fires are no joke. They can injure people (an 11-year-old California girl was injured last month by a sparking iPhone, for example), or possibly trigger a phenomenon called thermal runaway, whereby the battery burns at ever increasing temperatures.
When an iPhone explodes, the overwhelming likelihood is that the fire was caused by a counterfeit battery or a physically damaged battery — say, one damaged during installation by someone who doesn’t know what he’s doing.
Yes, we should have the right to repair. We should also have the right to not die in a plane crash caused by someone else’s exploding counterfeit iPhone battery. That example is extreme (but not impossible), but we also have the right to be alerted if the used phone we buy has a counterfeit battery that could explode in our pocket.
Smartphone manufacturing is leaving China
The United States and China are currently engaged in a trade war. President Trump tweeted last year that “trade wars are good, and easy to win.” That opinion is not widely shared by economists. And the trade war is hurting both U.S. and Chinese companies and consumers, especially U.S. farmers, whose markets have been the Chinese government’s primary targets for retaliation. Trade wars are bad and hard to win.
However, one side effect of the trade war is that more than 50 companies (even some Chinese companies, and including Apple) are reportedly pulling some manufacturing, including smartphone production. One report says that Apple may move as much as 30% of its manufacturing, including some of its iPhone manufacturing, out of China.
In truth, the trade war is just a nudge. Other factors, including rising wages and the desire to diversify, are the longer-term drivers of manufacturing moving out of China.
Still, the exodus from China is great news. Placing most of the world’s manufacturing in a single country was never a good idea. The change will force countries like Vietnam, Brazil and Mexico to develop the skills and infrastructure to pick up the slack, which will be good for those countries and for companies that will benefit from diversified manufacturing.
Yes, smartphone shipments are falling. Apple’s iPhone revenue is declining. Apple is discouraging third-party battery installation. And some manufacturing is leaving China.
Things are looking up!