Posted: 16 Jun. 2020 4 min. read

The smart phone add-ons: Towards a trillion-dollar economy

The current times have fostered a great deal of introspection, and it is against the backdrop of a global pandemic, restricted freedom of movement and constant uncertainty that I revisit the recent Deloitte 2020 predictions for UK Technology, Media and Telecommunications (TMT). More specifically, this will serve as a creative outlet - or rather- my alternative take on prediction 6: “The smartphone multiplier - towards a trillion-dollar economy”. This will be discussed in light of recent events and my highly subjective personal experiences of growing up alongside the rapid advances of mobile telephony. 

The premise of the smartphone multiplier is relatively simple; when a person buys a smartphone, they are likely to also generate revenue through mobile advertising, mobile apps, and accessories such as covers and screen-protectors– thus extending the economic significance of purchasing a single smartphone1. These three areas, advertising, apps and accessories account for 81% of the multiplier, yet I would be remiss to not consider the much larger implications of smartphone purchases and usage on our lives, society and the economy. Although I cannot blame my smartphone for my embarrassingly large late-night food order, it is certainly a major enabler. 

My first phone was a Nokia 5210. For those of you that have not had the pleasure of owning this rubber-shelled, nigh-indestructible monstrosity of a phone, count yourselves blessed. I wasn’t a massive fan, though our turbulent marriage had its highs. Magazines used to be filled with adverts for pixel-based art for your monochrome home screen and ringtones that made creative use of the squeaky phone speakers in ways that even the beloved ‘Kick’ ringtone2 never could. For me, that was the extent of my spending; ringtones and the odd background. It is therefore with awe that I observe an estimated market for smartphone add-ons worth £361 billion. Now, while it is beyond the point to scrutinize exact sizing and how these estimates have been made, suffice to say that spending associated with smartphone ownership has come a long way from the ringtones advertised in magazines (yes, those with scrupulous clauses which made it very difficult to un-subscribe to their ‘subscription’ service).

The model refers to hardware, content and services as the key categories through which we can understand how much purchasing a smartphone contributes to the wider market. However, it is problematic that apps are largely being considered as content and not services given that they are not mutually exclusive, i.e. Monzo, Uber, Deliveroo and many more. These businesses are not worried by the plateau of smartphone ownership and sales, rather, they welcome it with open arms. While smartphone manufacturers may be alarmed at the prospect of lower sales in a market saturated by smartphones, the multiplier’s components may more-than offset this.

As an individual at the tail-end of those who can be considered ‘millennials’, my relationship to my phone is far more complex than it ever used to be. As some have argued; we are already cyborgs to a degree – using smartphones as an extension of ourselves to do things we previously thought impossible3. To me, mobile-first services are exactly that. I have now come to expect that I can do a lot, simply by pressing a few things on the black 138.4 mm by 67.3 mm block that is my iPhone 8, and I am willing to pay for such services in return. Therefore, the multiplier seems to underestimate the true impact of having a smartphone in the modern day and age.

As mentioned, my smartphone and the apps within allow me to act upon what I see in a matter of seconds. Boom… and I’ve just bought a new pair of running shoes as a result of a newsletter about running shoe-innovation. Needless to say, there are a number of factors that impact this process, but the sentiment remains the same; smartphones make it easy to do the things you want to do, when and where you want to do them (like that late-night snack, remember?). This is particularly evident amidst our collective lockdown-reality, wherein my smartphone remains the primary tool for keeping me connected.

Therefore, while the smartphone multiplier serves as a novel construct for understanding that yes, smartphones have opened up a big market for actors beyond the manufacturers, it remains too simplistic for adequate approximations of the impact that smartphone ownership has on the economy. Though I suspect this may not have been its intention anyway, it serves as a neat reminder of where we have come from, where we are, and what we ought to consider in the future. To me, this much is clear - if you make something great available on my smartphone, I wouldn’t be opposed to trying it. The multiplier may not be as static as one might expect, but it is influenced by what is made possible through the combination of all parts of the multiplier working together. After all, ordering a new protective cover for your phone using an app on your phone doesn’t sound that odd. In fact, I should probably go do that now. 

1. Deloitte, 2020 Predictions for UK Technology, Media and Telecommunications, 2020.
2. Metro, We ranked the Nokia 3310 ringtones from best to worst, 1 March, 2017.
3. Futurism, Elon Musk: Neuralink Will Do Human Brain Implant in “Less Than a Year”, 7 May, 2020. 


Haakon Wiken

Haakon is a Service Designer at Deloitte Digital’s Edinburgh studio, where he specialises in creative problem-solving in ways that seek to meaningfully apply technology to the needs of users. Recently he has been reimagining and designing public services for users with highly complex needs. He is an eternal optimist, plant-father and self-proclaimed foodie. 

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