Analysis of the shift towards service economy: application to the smartphone case

Details

Supervisors

Swaen, Valérie

Faculty

Louvain School of Management
Louvain School of Management

Degree label

Master [120] en sciences de gestion
Master [120] en ingénieur de gestion

Abstract

The smartphone is an object that is typically related to the frenetic consumption economy which is dominating our western society today. Since 2007, more than 7 billion smartphones have been produced. Those are responsible for tremendous GHG emissions (among other issues). The production stage is particularly polluting as 74,1% of the total GHG emissions of a smartphone occurs at production level. Product-service systems (PSS) are a mean that could potentially diminish the environmental impact of smartphones. Indeed, a shift from a production economy to an economy of services can extend the devices’ lifespan and their usage. This research explores different PSS business models (BM) that could be applied to smartphones: reparability, modularity, take-back agreements, leasing, pay-per-service unit and communication-as-a-service (CaaS), and focusses on their attractiveness to the consumer. Results show that consumers have a different perception regarding the attractiveness of different offers depending on their personal beliefs, priorities and revenues. On the one side, consumers agree on the potential rebound effects that the proposed BM’s could generate on both society and the environment. On the other side, their opinion regarding ownership loss and data privacy diverges. Some conclusions can be drawn from each business model. First of all, overall, only “green” consumers perceive the advantages of reparability. Regarding the modular phone, it is attractive to environmentally friendly and handy consumers who do not value its design. In addition, increasing transparency of what is done with smartphones in take-back agreements is crucial in the consumers' eyes. The CaaS BM is relevant for white-collar, high-end consumers while leasing is more fitting to low-end, environmentally concerned and technophile individuals, such as millennials. Finally, pay-per-service unit is suited for occasional smartphone users.