Smartphone 'kill switches' could save owners $2.6B a year—no wonder carriers hate the idea

While the phone makers can afford the small financial hit to their overall annual profits, the carriers can't, legislators and regulators believe.
Written by Zack Whittaker, Contributor
Image: ZDNet/CBS Interactive

With more than 145 million US smartphone owners, and while that figure rises every month, so is the growing epidemic of device thefts.

According to William Duckworth, associate professor of statistics, data science, and analytics at Creighton University, adding anti-theft technology in modern smartphones—such as remote "kill-switches"—could save device owners up to $2.6 billion a year.

Duckworth said that based on his survey of 1,200 smartphone owners, 83 percent of smartphone owners believe a kill-switch would reduce overall device theft. He also estimated that Americans spend about $580 million replacing stolen phones each year, and $4.8 billion on device insurance.

It's a problem that Members of Congress and US state legislators have been scratching their heads over for more than a year-and-a-half. While the mobile phone makers are showing signs of compromise, the wider efforts are reportedly being hampered by a collective pushback from the cellular industry.

New York State Attorney General Eric Schneiderman and San Francisco District Attorney George Gascon met with the four largest smartphone makers—Apple, Google and Motorola, Samsung and Microsoft—in July 2013 to discuss plans to include such security features.

Two months later, Apple fired off the security starting pistol by including Activation Lock, a feature that locks down iPhones and iPads if they are lost or stolen.

Google and Microsoft in the past year also added anti-theft technology to their mobile software in efforts to cut down on device thefts. Google's Android software and Microsoft's Windows Phone perform many of the same functions as Apple's new security feature.

But Apple, Google, and Microsoft, which generate billions in device sales every year, can afford to compromise, by taking a small annual financial ding if it means they are satisfying the hunger for their customers' security satisfaction and frustrated legislators.

When CNN previously pressed the matter to US carriers, they declined to comment, instead citing comment from CTIA The Wireless Association, which said: "CTIA and its member companies worked hard over the last year to help law enforcement with its stolen phone problem."

The industry group is also pushing for stronger legal penalties for thieves, remote tracking and app-wiping, and education—even a global database of smartphones that could make it harder for a stolen phone to be reactivated.

But not a kill-switch.

Schneiderman said in late February: "Because the industry dragged its feet, Congress is poised to act on legislation that will put consumers ahead of profits." Lo and behold, Californian regulators in February stepped up their legislative efforts to bring "kill-switch" features as standard in mobile phones for any device sold after January 1, 2015, if passed.

Gascon followed in a Senate hearing in late March that the cellular industry resisted any such move in order to protect its profits.

But, Verizon's general counsel Randal Milch said at the hearing the cell giant was "actively engaging" with the community to encourage developers and manufacturers to bring forward solutions.

While the Californian bill would only affect consumers living in the state, regulators hope that it might spark a broader nationwide effort in order to prevent what appears to be a problem spiraling out of control.

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