The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Wednesday, September 25, 2013

Strategic CSR - Apple & Google

Here’s an interesting question: Should cellphone companies design technical features into cellphones that render them useless if they are stolen?
“[Stolen phones are] entered in a new nationwide database for stolen cellphones, which tracks a phone’s unique identifying number to prevent it from being activated, theoretically discouraging thefts. But police officials say the database has not helped stanch the ever-rising numbers of phone thefts, in part because many stolen phones end up overseas, out of the database’s reach, and in part because the identifiers are easily modified.”
Cellphones are being stolen at an increasing rate. Cellphone companies benefit from these thefts because consumers buy new cellphones to replace the ones that were stolen:
“The cellphone market is hugely lucrative, with the sale of handsets bringing in $69 billion in the United States last year, according to IDC, the research firm. Yet, thefts of smartphones keep increasing, and victims keep replacing them.”
At present, neither of the two largest phone operating systems, Apple and Android (Google), are doing as much as they could:
“Apple provides some assistance in locating lost or stolen phones with its free software, Find My iPhone, which can find a missing iPhone or remotely erase its data. But the service does not work once the phone is turned off or disconnected from the Internet. … Google does not include any software in its Android operating system to help people locate a missing phone, although some third-party Android apps offer the feature. Mr. Gasc√≥n of San Francisco said that was not enough. “What I’m talking about is creating a kill switch so that when the phone gets reported stolen, it can be rendered inoperable in any configuration or carrier,” he said.”
So, what should these companies be doing? Should they be creating these theft-proof devices, and potentially hurting themselves financially (both in terms of development costs and lost sales), or should they allow this practice to continue? After all, it is not them who are stealing the phones, right?
“In San Francisco, the resale market for stolen phones is thriving, with a new iPhone netting a thief $400 to $500 in cash, said Edward Santos Jr., a police lieutenant who investigates robberies. The starting price of a new iPhone 5, without a contract, is $650.”
Stolen electronics are big business:
“In the last six months, the San Francisco police have broken up more than half a dozen large-scale stolen electronics operations, uncovering thousands of stolen smartphones as well as laptops in houses and storage units across the Bay Area. In one raid in November, the police found stolen electronics valued at $500,000. The people accused of stealing them told the police they sold their entire inventory every two weeks through flea markets in Oakland, Calif., and by shipping the phones overseas.”
Take care
David Chandler & Bill Werther
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Cellphone Thefts Grow, but the Industry Looks the Other Way
By Brian X. Chen & Malia Wollan
May 2, 2013
The New York Times
Late Edition – Final