The EU has taken several relevant actions against Apple, Google, Meta, and other tech giants outside its territory, most notably the recently adopted “Digital Markets Act,” which requires the companies in question to ensure that the platforms do not abuse their dominant position to suppress or take over competitors, impose advertising or install software without users’ consent, and use collected user data for other purposes.
The EU now appears to be targeting cell phone manufacturers as well. According to recent reports, the European Commission has published a new draft proposal for smartphones and tablets sold on the EU market, suggesting higher standards for after-sales maintenance, software updates and energy efficiency. It calls for device manufacturers to produce at least 15 different spare parts for products of which maintenance should be kept for at least 5 years, and the battery should still have 83% capacity after 500 full charge/discharge cycles. Devices must also be labeled with energy efficiency labels that provide information on expected battery life, drop resistance, and other important characteristics.
In addition to the hardware-level regulations, the EU requirements are even more stringent at the software level. They require device manufacturers to provide functional updates for at least 3 years and security updates for 5 years after products are removed from the market. Of course, the EU’s practice of changing the status quo has caused resentment among a number of device manufacturers, such as Apple and Samsung, who consider this proposal “unrealistic.” But the EU has taken a tough stance, saying that “these products must be taken off the market if they do not meet sustainability requirements.”
Currently, the product warranty of phone manufacturers is often one year, and some manufacturers even advertise an 18- or even 24-month warranty as a benefit to users. This means that in most cases, phone manufacturers will only provide 24 months of spare parts to service their products as long as the product failure rate is in line with the industry average. The theoretical basis for this decision by cell phone manufacturers is that the average replacement cycle of consumers before the epidemic was about 18 months. The strategy of major mobile phone manufacturers has changed from focusing on a few major models a few years ago to expanding product lines/SKUs, accelerating product iteration cycles, and shortening product life cycles in small increments. The purpose of this strategy is, of course, to avoid pressure on inventories.
Therefore, phone manufacturers have gradually introduced “spare parts and repair services” over the past two years. When the number of spare parts is running short, it is indeed better to replace the phone directly to meet users’ needs. Five years of spare parts undoubtedly put more demands on the strategic department of the manufacturer to control the market development and actuarial capabilities.
Although the hardware requirements have made it difficult for phone makers, the new regulations could be more deadly at the software level. It should be noted that Android devices, which are constrained by fragmentation, typically last only about 2 years after system and security updates are released, unlike iOS. Even Google currently only offers 3 years for the Pixel series models. Not to mention that 3 years of feature updates and 5 years of security updates are required, which means a lot of extra work for the software operations and maintenance teams of the handset manufacturers. Even if the actual sales cycle of a current flagship model of about one year is taken as a basis, this means that the software team has to provide maintenance services for at least 6 years if a phone manufacturer wants to sell its flagship in EU countries.
Although the EU has raised the standards for phone maintenance and software updates, the purpose is exactly the same as the previous mandatory USB Type-C interface, which is to improve the lifespan of electronic products and reduce electronic waste as much as possible, but in the end, it could lead to unexpected results. The new EU regulations will inevitably increase costs for phone manufacturers selling their products locally. To pass on the costs, consumers will immediately feel the increase in product prices, making the price of the world’s most expensive phone even higher.
And that’s not all. The increase in the cost of maintaining software and hardware will naturally lead cell phone manufacturers to turn only to the EU market and launch their popular models that are recognized in other regions, resulting in consumers having fewer phone products to choose from.
