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Smartphone Kill Switch Could Save Users $2.6B a Year

Smartphone Kill Switch Could Save Users $2.6B a Year
March 31, 2014 1:00PM

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Effective kill switch technology has been around for years and everyone but cellular carriers recognize its value. That's not terribly surprising since implementing kill switches would effectively eliminate the need for phone theft insurance and thus reduce carriers' revenues by a couple of billion dollars per year, said analyst Charles King.

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For all the debates over smartphone kill switches, this one could push the envelope across the table. New research from Creighton University suggests that the controversial concept, which would make it impossible to resell stolen smartphones, could save consumers $2.6 billion a year.

Here’s the backstory: In June 2013, law enforcement authorities started calling on the smartphone industry to adopt technologies that would deter theft by squeezing the market for selling stolen devices.

New York State Attorney General Eric Schneiderman and San Francisco District Attorney George Gascon announced a nationwide 'Secure Our Smartphones Initiative' last summer that aims to have smartphone makers add kill switches to mobile devices during the summer. Law enforcement announced plans to work with device manufacturers to make a kill switches, or equally effective deterrent technology, a standard feature of their products.

How the Numbers Add Up

The CTIA, the wireless industry trade group that represents the carriers, has been against the idea since it was announced. The group emphatically stated that a “kill switch isn’t the answer.” But William Duckworth of the Heider College of Business at Creighton University, suggests it might be just the remedy.

Duckworth pointed to a recent report from comScore, estimating that over 145 million Americans carry smartphones. And, he argued, those smartphones make consumers easy targets for theft.

“A stolen smartphone -- such as the iPhone 5S -- could sell for $800 or more in the United States and overseas,” he said in his report. “For criminals, a stolen phone could be worth more than a stolen wallet, a tablet, or even a laptop.”

Duckworth conducted a survey of 1,200 smartphone owners in which he reviewed the average cost of cell phones and cell phone insurance.

Here are a few stats from his findings: 99 percent of smartphone owners feel wireless carriers should give all consumers the option to disable a cell phone if it is stolen; 83 percent of smartphone owners believe that a kill switch would reduce cell phone theft; and 93 percent of smartphone owners believe that Americans should not be expected to pay extra fees for the ability to disable a stolen phone.

“If the kill switch significantly reduced cell phone theft, consumers could save about $580 million a year from not needing to replace stolen phones and another $2 billion a year by switching from premium cell phone insurance (offered by the wireless carriers) to more basic coverage offered by third parties such as Apple and SquareTrade,” Duckworth said. “My research suggests that at least half of smartphone owners would in fact reduce their insurance coverage if the kill switch reduced the prevalence of cell phone theft.”

Follow the Money Trail

We caught up with Charles King, principal analyst at Pund-IT, to get his take on the research. He told us effective kill switch technology has been around for years and its value seems to be recognized by everyone but cellular carriers.

“That's not terribly surprising since implementing kill switches would effectively eliminate the need for phone theft insurance and thus reduce carriers' revenues by a couple of billion dollars per year,” King said. "But by making phones less attractive to thieves, kill switches would also reduce the trauma and injuries suffered by victims. One can only hope that Congress does the right thing for consumers rather than bowing to carriers' greed.”

Tell Us What You Think
Comment:

Name:

joe.frost@outlook.com:

Posted: 2014-04-26 @ 1:37pm PT
The feature is an excellent idea, but the problem with implementation remains with users choosing to "opt in" to the solution. The trade off is one to consider: Opt In, protect the device & data, but be tracked 24/7 via GPS - OR - Opt Out, risk the loss, but protect privacy of location.

Loss could be significant if the device is configured like most with usernames and passwords to applications configured and logged in. It is doubtful many users log out each time because of a false sense of security with the personal device always being on the person.

This security event: loss of device could be similar to a loss of credit cards - access until disabled, but where card companies may cover a percentage of the financial loss, other companies are finding ways to avoid this type of "disaster recovery" by modifying their terms of service agreements to include clauses to prevent lawsuits.

So, whether opting in our not, much more needs to be considered regarding loss and privacy.

Maybe it's time to consider engineering a feature whereby any device can have the GPS function remotely turned on by the account owner via personally identifiable information as the first step and then secondly to take advantage of a remote wipe and disable function...

gonbaK lE:

Posted: 2014-04-01 @ 12:24pm PT
How surprising: the cellular carriers who stands to lose the extra revenue from premium insurance are against the kill switch. If they mistakenly kill your service, have them replace the phone at their expense. Would still be much less than $2.5 billion.

El Kabong:

Posted: 2014-03-31 @ 10:57pm PT
Not very bright, what happens when they kill your service for reasons other than theft? Sounds like a little too much power to me.

Ed.:

Posted: 2014-03-31 @ 8:52pm PT
@Steve: Thanks for the catch. We corrected that line to say "June 2013" instead of "June 2014."

Steve:

Posted: 2014-03-31 @ 8:44pm PT
June of what year? June 2014 has not yet occurred.

Joey:

Posted: 2014-03-31 @ 8:08pm PT
Got a green light from me. Make it so.

ogman:

Posted: 2014-03-31 @ 8:06pm PT
Why is it so hard to understand that people don't want the government to have the ability to "kill" their phones? Snowden/NSA taught us everything we need to know. Hands off my phone!



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