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2022: A Year of Challenges and Opportunities for the Mobile Industry

2022: A Year of Challenges and Opportunities for the Mobile Industry Image Credit: beer5020/Bigstockphoto.com

Two words best summarize the 2021 mobile market: It’s complicated. One of the trends driving the market right now - a prolonged global pandemic that continues to wreak havoc on supply chains around the world - shows little sign of abating. TrendForce reported that Apple faces significant component shortages, including 4G SoCs, low-end 5G SoCs and display panel driver ICs. Between a lack of smartphone components and delays in getting goods from shipping containers into trucks and to destinations across the country, we could see impacts on the mobile market well into 2023.

Not all the news is grim, fortunately. Despite all the well-reported supply chain snafus, smartphone shipments grew 1% year-over-year (YoY) and 6% quarter-over-quarter in Q3 2021 according to Counterpoint Research. And Apple’s successful launch of the iPhone 13 series propelled the company’s growth by 19% YoY, boosting the company’s market share 7% in Q3 2021 as compared to Q3 2020.

At Blancco, we also believe there will be more to cheer about in 2022.

#1: First, we’ll see more widespread emphasis on sustainability in the technology market driven, in part, by the growing right to repair movement.

One part of President Biden’s July 2021 executive order, for example, encourages the Federal Trade Commission to enact additional regulations that prohibit manufacturer policies from barring the repair of equipment and devices by individuals and independent repair shops. This order quickly set the wheels in motion. Microsoft has already agreed to increase consumers' right to repair options by the end of 2022. And in November, Apple announced Self Service Repair which will enable U.S. consumers to repair their own iPhone 12 and iPhone 13 devices with Apple genuine parts and tools in 2022. We expect more tech companies to join in and give more options to consumers as everyone looks for ways to mitigate the global e-waste crisis. We believe the momentum will come more from enterprises taking greater consideration of corporate social responsibility and climate concerns rather than government or accounting mandates. Why? Right to repair policies provide an actionable metric related to keeping repairable devices and recycled parts in the circular economy and out of landfills. It just makes good business sense in a world where ESG activities are growing in importance.

#2: Our second good news prediction is that we’ll see increased market momentum in the mobile insurance market.

With the skyrocketing cost of smartphones, more consumers - as well as companies that buy and lease devices for their employees - will see the value of protecting their investments. This is a win-win for mobile operators.

As we move into a post-pandemic world, the sales of mobile device protection packages will increase in 2022 for two key reasons: One, smartphones are becoming more technologically advanced. Two, these devices are growing increasingly expensive. Operators have a significant opportunity to help consumers and businesses realize the value in protecting those investments.

Device protection program subscriptions not only enable businesses to assess value of the fleet of devices they’ve leased or purchased, but the programs also benefit consumers who desire device protection across a device’s entire lifecycle. This shift in customer expectations and the need for large businesses to protect their large investment in smartphones will stimulate growth in subscriptions and revenue streams for operators.

#3: Finally, our third prediction is that consumer appetite for new devices will fuel used smartphone trade-ins, replenishing the secondary device market.

Despite market uncertainty and slowing demand, analysts project an iPhone sales increase of 6% in the final three months of 2021 - in part because of demand for 5G-enabled devices. The fact is that as we go into 2022, operators will continue aggressive marketing tactics, including discounts and generous trade-in offers for used devices. Enterprises and individuals will continue to rely on mobile devices that support flexible work models and are capable of faster data transmission. This will drive the upgrade cycle, which will help meet growing secondary market demand and accommodate supply chain challenges by allowing OEMs to harvest components from used devices for reuse in the manufacture of new smartphones.

After nearly two very unpredictable years, no one can say for certain what’s ahead. If there’s one thing we know for sure, however, the value we bestow on our mobile devices is in no danger of waning. The future - both for 2022 and far beyond - is rosy for mobile operators and device manufacturers as the desire for communications agility continues to play an essential role in the lives of individuals and businesses.

Author

As the Executive Vice President, Products and Technology at Blancco, Russ Ernst is responsible for defining, driving and executing the product strategy across both the data erasure and mobile diagnostics product suites. Critical parts of his role include developing a strong team of product owners and cultivating an organizational product culture based on continuous testing and learning.

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