March 31, 2014, 12:00 AM — Technology that remotely makes a stolen smartphone useless could save American consumers up to US$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.