Providing employees with used smartphones rather than new ones is a growing sentiment among energy companies. Faced with the need to find ways to cut expenses, these companies are outfitting mobile employees with legacy smartphones rather than buying them the industry’s latest and greatest gizmo.
A few factors are driving the change. The reality is that cell phones can last much longer than a few years. In the past, many companies upgraded to gain new features rather than because they were having mechanical problems with the device itself. Smartphones are now nearing their second decade of widespread acceptance. The Apple iPhone was delivered in 2007. Consequently, suppliers are struggling to find new features that entice energy companies to upgrade.
Another factor is the new models are being released with high price tags. Unit growth declined as the market became saturated. Pew Research reported that 97% of Americans own a cell phone. To keep their balance sheets in the black, suppliers have been increasing the price for their high end phones. Â Consequently, the average street price rose to $438, a 5.5% rise in 2023, according to International Data Corp. (IDC).
Used Phones Lower Corporate Expenditures  Â
Utilities have realized that remote workers need a low cost, serviceable device rather than a high priced system with frivolous features. That mindset fits with the current business landscape, which has been challenging. Inflation has been a bugaboo, driving up expenses and making it difficult for energy companies to turn a profit. Outfitting employees with used rather than new company smartphones is one way to lower expenses without sacrificing anything of substance.
As a result, International Data Corporation found that worldwide shipments of hand-me-down smartphones reached 309.4 million units in 2023, a 9.5% increase over the 282.6 million units shipped in 2022. In addition, the market research firm expects used cell phone shipments to reach 431.1 million devices in 2027, a compound annual growth rate (CAGR) of 8.8% from 2022 to 2027.
While interest is rising, making the change does present energy companies with a few challenges. First is sourcing and supporting the devices. Smartphone vendors typically do not offer front line sales and assistance for used devices. As a result, energy companies will have to find third parties specializing in this market segment.
Also, the condition of the devices may also be a concern. The secondhand industry does not have standards or best practices that outline when used devices should or should not be sold. So, support costs may rise and offset the potential saving utilities gain by making the change.
In sum, mobile devices have become a key element in how employees complete their work. As energy companies search for ways to curb expenses, they are buying more used smartphones. The devices present a sound business case but need to be coupled with strong support to ensure no drop offs in service and availability arise from the switch.Â