CSR Lessons From Mobile Industry's 'Kill Switch' Opposition

You love your cell phone and can’t spend a minute without it, right? If the answer is yes, here are three facts you should be aware of.

First, in 2012 1.6 million Americans were the victims of smartphone-related crimes. Second, one in three robberies in the U.S. include the theft of a mobile device. Third, cell phone thefts are now the single biggest source of property crime in many American cities.

In other words, not only is your beloved phone in danger of getting stolen, but it can also get you into trouble, from being the target of a robbery to even getting murdered in some cases.

Is this inevitable? Not necessarily, according to a growing number of policymakers and law enforcements officers. They believe consumers deserve better and that a "kill switch" that would make smartphones useless when stolen is the best solution to the "epidemic of violent smartphone thefts,” as New York Attorney General Eric Schneiderman calls it.

But not everyone is convinced a kill switch this is such a great idea. Take, for example, the wireless carriers. They believe that there are better ways to take action against smartphone theft. Last year CTIA, the carriers’ trade group, launched a national phone-tracking database, and it supports tougher penalties for smartphone thieves.

“We encourage consumers to use currently available apps and features that remotely wipe, track and lock their devices in case they are lost or stolen, and our members are continuing to explore and offer new technologies to address these crimes, while not inadvertently creating a ‘trap door’ that hackers and cybercriminals could exploit,” CTIA said recently in a statement.

While the CTIA would probably like to frame this debate as a discussion between experts about the effectiveness of different measures or security issues, others see an entirely different issue at stake here. New York's Police Commissioner William Bratton made it very clear earlier this month, saying the reason the mobile industry hasn't already adopted a kill switch is because of  “corporate greed."

"Profit. That's what this is all about," Bratton said. "They're making $30, $40, maybe $50 billion dollars a year on new phone sales ... They're making a fortune on this. And they don't want to lose it.”

This is not just about sales of new phones, but also about keeping expenses low in the case of the wireless carriers. Lawrence Pingree, research director for market researcher Gartner, told SFGate.com that wireless companies see an all-out push against theft as too expensive. "The main goal for carriers is to keep support costs low and encourage subscribership, so antitheft technology could cause support nightmares," he said.

When you think about it this debate is actually about corporate social responsibility (CSR) and more specifically it is about the limits of CSR. On the one hand you have Bratton, Schneiderman and other officials who believe that cell phone manufacturers and wireless carriers have a responsibility to their customers to reduce the risk of smartphone theft.

On the other hand smartphone manufacturers and especially wireless carriers seem to believe that it is definitely an issue they shouldn’t ignore, but at the same time they believe it is not reasonable to expect them to take costly measures to handle a problem they believe to have a little control on.

I make here a distinction between manufacturers and carriers, as manufacturers seem to be somewhat more open to the implementation of a kill switch. Last December, SFGate.com reported that Samsung “has developed just such a feature for its mobile devices, but the Korean company has hit a snag. U.S. wireless carriers won't sell their products if they come loaded with the disabling feature.” Apple has also introduced a kill switch-like feature on its iPhones, as part of the iOS 7 update.

Still, in the case of both cell phone manufacturers and wireless carriers, it seems that for a long time their profits had (and in the case of the carriers still have) a higher priority than reducing the risk of phone theft. It shows you that when push comes to shove even companies that consider themselves to be responsible, like many of the companies involved in this debate, choose their financial bottom line over responsibility.

Let’s leave for a second the debate if there’s something wrong about framing these situations as cases of these "either/or" decisions,  as this story leaves us with two lessons that I find even more important.

First, it once again demonstrates that in general companies can no longer decide what the limits of their responsibility are – their stakeholders do it for them. In this case these are regulators in states like California and New York and Senators in the U.S. Senate who introduce new bills aimed to ensure manufacturers and carriers take action and adopt/enable the use of kill switch. It already proved effective in the case of some of the manufactures, and it will probably prove itself eventually to be effective also in the case of the carriers.

The second lesson is that this story is an example how far we are from a culture of durability. In an environment where a cell phone is replaced every couple of years at best, it might be easier for everyone -- from the manufacturers to the carriers -- to expect that consumers won’t make such a big deal about a stolen phone. And we have to admit that they’re probably right – after all, we haven’t seen consumers loudly demanding better solutions.

If the manufacturers and the carriers were in a durability mode, the kill switch or any other similar solution would have been a no-brainer. But as long as they believe that profit maximization and durability are at odds, what we get is business as usual.  This will change only when one of the main players or the consumers decide it’s time to change the rules.

Image credit: Marjan Lazarevski, Flickr Creative Commons

Raz Godelnik is an Assistant Professor of Strategic Design and Management at Parsons The New School of Design. You can follow Raz on Twitter.