More and more businesses are adopting tablets and mobile devices in their operations – a recognition of the benefits mobility offers whether that be to improve the customer experience, increase efficiency, streamline processes or any mix of the above. However, there is one cost that is not often spoken of when it comes to managing such deployments, that being the cost of replacements.
The biggest reason businesses have to replace mobile devices (phones &/or tablets) each year is damage or accidental loss. Mobile devices are prone to physical damage due to their portable nature, with employees often misplacing, dropping, or accidentally damaging them. Devices can also be lost through theft or mishandling during travel or use in public spaces.
Key Factors Contributing to Device Damage or Loss
- Accidental Damage: Dropped devices, cracked screens, and water damage are common issues faced by businesses. For instance, a Samsung survey in 2023 found that 20% of mobile devices in businesses globally are lost or damaged each year. Such incidents can be frequent in environments where devices are shared, employees are on the move or in high-contact industries such as retail, healthcare, and field service.
- Theft or Misplacement: Mobile devices, especially those with high resale value, are often targeted by thieves, while employees may also misplace their devices. According to the National Association for Information Destruction (NAID), around 30% of employees admit to losing their mobile devices while on business trips. The cost of replacing a stolen or misplaced device can be significant, not only in terms of the device itself but also due to the data security risks involved.
- Wear and Tear: Over time, mobile devices can degrade in performance due to heavy use. Gartner estimates that devices in businesses often need to be replaced every 2-3 years due to wear and tear, especially if used by departments or employees who heavily rely on them for productivity. That could also include devices being used in public spaces.
Associated Costs of Replacement
- Replacement Costs: The most direct cost of replacing damaged or lost mobile devices is the cost of purchasing new units. The price of replacing a mobile phone can range from $300 to $1,200 depending on the model. Tablets can cost even more. For instance, an iPad Pro used in business environments can cost upwards of $1,000, with enterprise-grade tablets potentially reaching up to $1,500. In large organizations, these costs can quickly add up. According to IDC, businesses spent an average of $7 billion annually on replacing lost or damaged mobile devices in 2022.
- Example: If a company with 1,000 employees needs to replace 10% of its devices annually at an average cost of $600 per device, this would amount to $60,000 in replacement costs each year.
- Lost Productivity: In addition to the direct cost of device replacement, there’s a significant hidden cost in terms of lost productivity. Teams, departments or individual employees who rely on mobile devices for their work may face delays or operational disruptions while waiting for a replacement or repair. The Frost & Sullivan report on business mobility in 2018 found that downtime due to lost or damaged mobile devices costs businesses an average of $35 per employee per hour.
- For example, if an employee or business area relies on a device for key tasks and loses access for a day (8 hours), this could cost the business upwards of $280 in lost productivity per employee.
- Data Breaches and Security Risks: Mobile devices store sensitive data and can be potential access points back into corporate systems and applications. Unauthorised access or the loss/theft of these devices can expose businesses to significant data breach risks. The IBM Cost of a Data Breach Report (2023) found that the average cost of a data breach is $4.45 million globally. While this figure accounts for all types of data breaches, lost or stolen devices—especially when not secured—can be a common entry point for breaches.
- Administrative and IT Support Costs: Handling device replacements also incurs administrative costs, particularly if your company lacks a streamlined device management system. Gartner estimates that companies spend up to $250 per device annually on mobile device management (MDM), including administrative overhead, repairs, and security measures. In addition, IT teams often spend time tracking and managing device replacements and ensuring data is securely wiped before disposal or resale.
- Insurance Premiums: For businesses that insure their mobile devices, frequent claims can lead to increased insurance premiums. According to Insurance News, the average cost of insuring electronic devices has increased by 10-15% in recent years due to the rising frequency of claims, including those related to mobile devices in business settings.
Summary of Key Costs
Here’s a breakdown of the potential costs a business might incur:
- Device replacement: $300 – $1,200 per device, depending on the model.
- Lost productivity: $35 per employee per hour (e.g., 8 hours of downtime could cost $280).
- Data breach risk: Potential costs in the millions, with an average of $4.45 million per breach.
- Administrative/IT support: $250 per device per year in device management costs.
- Increased Insurance premiums: Insurance costs could rise by 10-15% each year.
Conclusion
The most significant reason for businesses having to replace mobile phones and tablets annually is damage or loss, which leads to high direct and indirect costs. These costs are not just limited to the price of replacing the device itself but extend to lost productivity, potential security breaches, administrative burden, and higher insurance premiums.
For businesses, particularly those with large workforces or those relying on mobile devices for key operations, managing these risks is crucial. Adopting preventative measures such as device protection measures, device security policies, mobile device insurance, proper training, and utilizing mobile device management (MDM) systems can help mitigate these costs.
Understanding and quantifying these costs within your own business could help you make informed decisions on how best to manage the lifecycle of your mobile devices and reduce unnecessary expenditures.
How Schiltron.IO can help
Eliminating the costs associated with the replacement of devices completely is unrealistic, but with our range of protective products and services for iPads, we can be part of the measures you take to reduce the financial impact on your business. Every % reduction you make can make a significant difference to your bottom line. Contact us today to find out more.
