Consumers could save an estimated $2.5 billion each year if proposed "kill switch" technology
significantly reduced smartphone thefts nationwide, according to a new study. The analysis by
William Duckworth, a statistics professor at Creighton University, estimates that consumers
spend about $500 million each year replacing stolen phones and around $2 billion each year
buying premium cell phone insurance through wireless carriers.Introducing a kill switch feature
that allowed victims to disable their stolen devices could virtually eliminate phone thefts because
criminals would no longer have an incentive to steal them, law enforcement officials say. If phone
thefts were no longer a concern, more than half of smartphone owners say they would buy less
expensive phone insurance coverage from third parties like Apple or SquareTrade that doesn't
cover theft or loss, according to a small survey of 1,200 smartphone owners Duckworth conducted
along with his analysis.
His survey also found that 99 percent of respondents were in favor of having a kill switch feature
on their phones. Duckworth's analysis comes as the smartphone industry faces increased pressure
to reduce the rising number of thefts. About 1.6 million phones were stolen in the United States in
2012, according to Consumer Reports. Legislation requiring that every phone sold in the United
States feature a kill switch has been introduced in both houses of Congress, but no votes have yet
taken place.
San Francisco District Attorney George Gascon and New York Attorney General Eric Schneiderman
have also pressed manufacturers to introduce stricter anti-theft technology. Phone robberies have
become increasingly violent, with several murders taking place across the country. The CTIA, the
wireless industry trade group, did not respond to a request for comment about the study. The group
has opposed a kill switch in the past, arguing that a hacker could exploit the feature to shut down the
phones of consumers or law enforcement officials.
Gascon, however, has argued that the industry has opposed a kill switch because reducing phone
thefts could hurt their profits from selling phone insurance. The top four carriers earned an estimated
$7.8 billion last year in insurance premiums from their customers, according to Warranty Week, an
industry trade publication. The major wireless carriers offer cell phone insurance through a third-party
provider called Asurion, which pays them for each policy they sell.
In an emailed statement, Asurion spokesperson Bettie Colombo said company data shows Duckworth's
analysis, which partly relies on statistics from Consumer Reports, underestimates the number of phones
stolen each year. Colombo also said about 60 percent of insurance claims are due to lost phones,
which can't be prevented by a kill switch “and still results in tremendous cost for the consumer without
appropriate coverage.” Phone insurance plans typically cost between $7 and $11 per month, and require
consumers to pay deductibles as high as $200 for a replacement phone -- which is often refurbished, not
new. Asurion also doesn’t guarantee customers will receive the same model as the one they lost.
Last year, Apple responded to the growing pressure from law enforcement by announcing a new security
feature that the company said would allow consumers to render their devices useless once stolen. Apple’s
new Activation Lock was introduced in September. Meanwhile, thefts of smartphones and other mobile
devices increased in several major cities again in 2013, including New York, Washington, D.C., and
San Francisco.
Source: Huff post