Upwardly Mobile: What’s next for mobile technology trends in 2023?

Susannah Streeter: Hello and welcome to Switch Your Money On from Hargreaves Lansdown. I’m Susannah Streeter, I’m Head of Money and Markets here at Hargreaves Lansdown. And, as usual, I’m with Sarah Coles, our Head of Personal Finance. So Sarah, we’re celebrating an unexpected milestone in this episode of the podcast, the 50th anniversary of the mobile phone call, which was in April. If that has come as a surprise to you, it’s probably because mobile phones weren’t actually on sale until ten years later when they cost thousands of dollars. So, of course, they weren’t widely used until much later.

Sarah Coles: So how did they manage to make a call then?

Susannah Streeter: Well, with difficulty. It was actually between employees at two telecoms companies, testing the idea, so I suppose it’s a very generous definition of the first mobile call.

Sarah Coles: Ah, of course. What most of us will remember is when they really started spreading in the UK in the 1990s. I have to admit, I was a very late adopter. I actually only got my phone in 1998 and, even then, I’m not sure I could even play Snake on it.

Susannah Streeter: I remember the first phone I had. It was an absolute brick. Of course, at that stage, smart phones really were in their infancy, Sarah, when you got your first phone, of course. But since they’ve become essentials of modern life. So, we’re devoting this episode to these phones, everything we do with them, and what we can expect in the future, in an episode we’re calling ‘Upwardly Mobile’.

Sarah Coles: Yes, we’ll be talking to Sophie Lund-Yates, our Lead Equity Analyst, about a handful of companies, all of which owe a great deal to the mobile phone.

Sophie Lund-Yates: Hi Sarah. Yes, absolutely. A couple of phone manufacturers and an app-first business from me today.

Sarah Coles: Great. And we’ll also be chatting to Laura Hoy, an ESG Analyst at HL, that’s environmental, social and governance. So, Laura, you’ll be looking at the social responsibility issues around mobiles and apps.

Laura Hoy: Yes, absolutely. And there’s plenty to untangle there, you know, from the environmental risks of the devices themselves, all the way down to the social and governance risks that go along with using them.

Susannah Streeter: There is plenty to delve into there. And we’re also going to be peering into the future and speaking to Bernard Marr, a futurist who explores technological trends and how they will affect how we live, work and play. He has written over 20 books on new innovations and how to navigate this wave of digital disruption. Bernard, we’re not really going to have the time to go to detail on all of your 20 books. However, we can, of course, look at whether you think this is just the start of the story of the mobile phone?

Bernard Marr: First of all, thank you so much for having me and, absolutely, yes. It is only the start. The mobile phone is going to emerge into something completely different and something that we might not even imagine today.

Sarah Coles: That sounds very exciting and we’ll look forward to speaking to you later. Plus, of course, we’ll be speaking to Emma Wall, our Head of Investment Analysis and Research at HL whose going to be talking to Jeremy Gleeson from AXA Framlington. So, there will be plenty of people to call on, but let’s start with a snapshot of the mobile market right now. USwitch research shows that, in the UK, at the start of 2022, there were around 72 million mobile phone connections. So, that’s actually more than one per person. In all, about 88% of people have smartphones. This is a huge increase because, if you look back to 2008, fewer than one in 20 people had one. That growth isn’t over either because, by 2025, around 95% of the population are expected to be using a smartphone.

Susannah Streeter: Yes, and you won’t be shocked to hear that younger age groups are more mobile savvy, so 96% of those aged 16-24 have a smartphone. My teens are glued to theirs. However, it had reached well into older age groups too, with 78% of those aged over 55 having one. And while, in the early days, mobiles could do little more than manage calls, right now, of course, we’re using these phones for the data. The volume of mobile calls has, in fact, changed very little in recent years, and are now just a tiny fragment of the massive and growing level of data traffic on these phones.

Sarah Coles: In terms of brands, in the UK, Apple is unsurprisingly the biggest player, responsible for around half of all UK mobiles, followed by Samsung with just under a third. Huawei makes up 5%, which means all the other brands have a much smaller presence. The iPhone surged to prominence after becoming a relative latecomer to the market in 2007. At that point, it was Blackberry that dominated, but it was swiftly overtaken. Blackberry’s market share plummeted from when it was the biggest player in 2010, with 43% of the market, to holding, wait for it, less than 6% of it just three years later. It’s a really salient lesson for anyone tempted to believe that the dominant players can’t lose their crown.

Susannah Streeter: And while developed markets are more saturated, phones have, of course, spread right across the globe. According to the International Telecoms union’s latest snapshot of global trends, three quarters of the population aged 10 years or over own a mobile phone. The big driver in growth over the past decade has been the sharp increase in internet use, particularly in countries like Brazil, China and India. Growth in using mobiles to access the internet has been driven, by a large extent, by people living in low and middle-income countries. In these parts of the world, half of the population is using a phone for this purpose. In 2021, 4.3 billion people were using the internet through a mobile and 95% of the world’s population is within a mobile broadband network.

Sarah Coles: Yes. And, of course, the pandemic spurred on this trend with the accelerated shift to digital. This was particularly apparent for things like social media, gaming and entertainment. Apps covering these areas had the highest number of downloads. But, of course, e-commerce also witnessed sharp growth, as did apps for educational purposes as teaching went online. Low-cost data plans are now easier to access in many parts of the world, which is luring in more users and that’s helped speed up the number of downloads.

Susannah Streeter: It does seem pretty peculiar now that the iPhone launched without the App store, which arrived a year later with 500 apps. Now we have, wait for it, over 2 million and plenty of them have become household names. I mean, we pick up our phones on an hourly basis to use them. Mintel says the app market in the UK alone was worth over £3 billion last year, with two-thirds of mobile and tablet users using messaging apps on a daily basis. It really is a growing business and, here in the UK, the app development industry is worth £21.8 billion. Given our reliance on apps, it probably won’t surprise you that the app market is set to grow rapidly over the next seven years. Worldwide it was valued at around $206 billion in 2022 and is set to expand by just shy of 14% annually until 2030. Now, this is according to industry analysis by Grand View Research.

Sarah Coles: Yes and, within that, mobile gaming is expected to outstrip growth forecasts for the overall app market over the next few years with a compound annual growth rate of 15.77%. And so, with developments in technology like motion sensors and gyroscopes helping augmented and virtual reality technology work even better.

Susannah Streeter: Mobile phones and, of course, it seems artificial intelligence is, as Bernard was alluding to a little bit earlier, it’s only really getting started and the use of AI is set to enable game designers and studios to mine data on player behaviour and determine the ability and emotional state of the player, and then tailor the game accordingly to that information. So, it should help them get an understanding of how people end up playing the game, with the aim of making improvements to lure more users in.

Sarah Coles: There’s an awful lot to come in this market, so let’s get an idea of what it all this means for companies operating in the sector and bring in Sophie Lund-Yates, our Lead Equity Analyst. So, Sophie, you’ve been looking at a hardware giant that makes handsets, haven’t you?

Sophie Lund-Yates: Hi, Sarah. Yes, I’ve been looking at Samsung, which is the world’s largest producer of memory chips, smartphones and TVs. The group’s facing challenges. And I’m sorry to say that, once again, the blame lies with inflation and general economic sluggishness. Samsung’s handheld phones aren’t selling as much as hoped and the group’s blaming this on a nervous consumer base, partly because of inflation. The group’s handsets make up about a quarter of profits, and the expectation is that demand is going to remain shaky in the current quarter. But the real humdinger lately is the chip manufacturing. As I mentioned, Samsung is the world’s biggest manufacturer of memory chips, too. This area of the business usually makes up about half of the group’s profits and conditions here are really difficult. The division is thought to have seen billions in losses last quarter, as the slower global economy hammers demand for chips. For a bit of context, there was a massive 20% drop in the price of memory chips used in computers, phones and servers between January and March. Part of the issue is over-supply and Samsung is planning big cuts to its own production to address this. Overall, the issue has seen profit drop 96%, which is obviously not sustainable. For all the challenges, I still think Samsung has some strengths. A lot of its problems are industry wide rather than company-specific, and I think it’s in a good place to prosper when things normalise thanks to its huge scale, though exactly when stabilisation will happen is really pretty hard to map right now, I’d say.

Susannah Streeter: Also, Sophie, you’ve been looking at a familiar name to this podcast, haven’t you?

Sophie Lund-Yates: Yes! We can’t really do a mobile episode and not have me talk about Apple. I know in the last episode I was looking at things here, but I was looking from more of an Apple-watch perspective, but the real breadwinner for this tech giant is, of course, its iPhones. These account for the biggest portion of sales and are consistently deemed market leading in terms of brand power and popularity, which you were alluding to earlier. Given how recently we discussed Apple, I won’t harp on for too long about the granular stuff. But, I would say, that as the wider market struggles to find where to settle, especially in the US, with conflicting economic and market indicators, Apple will remain sensitive. Looking longer-term, the core thing to focus on is how well the brand’s potency holds up. Competitors are closing in. So, when you think about it, the difference between each new iPhone model now is really quite negligible compared to the leaps that we saw with the early models. I still remember being amazed that the first iPhone could do that thing where, if you tilted your screen, it made it look like you were drinking a pint of beer. Anyway, I digress, what I’m saying is that the market share, or market share dominance, isn’t a given. We only need to look at Blackberry to remember that. By the time this episode goes out, we’ll have just had a new set of quarterly numbers from Apple which will give more of a clear steer on things, and I’d encourage any investors or prospective investors to keep an eye on that data set. You can, of course, do this by signing up to our free share research, which is a shameless plug from me there!

Sarah Coles: So, we’ve looked at the companies which make the chips and the phones, but what about a company that relies on us looking at our phones rather than making them?

Sophie Lund-Yates: Precisely, it’s a great question and definitely a really important angle to consider this week. Certain companies, as you’re saying there, simply wouldn’t work unless they were an app, and Uber is one of those. Uber has had a strong start to the year in terms of its valuation but, I would say, part of this is more market wide as investors turn back to tech stocks. I’m more interested in the company specifics and, on that front, things are looking better than they have been. The last set of quarterly results from Uber showed us that the number of users, order frequency and margins have all improved compared to last year. Crucially, Uber has said it thinks it will hit profitability soon. In other words though, it is still loss making, which is something that shouldn’t be forgotten and increases risk because there’s less of a cushion there when things go wrong. Pandemic recovery is, of course, playing into the better performance overall, but there are some ongoing risks in my opinion. A big one is regulation around workers’ rights. These battles have been well publicised and have the potential to dent margins if they rear their head again. At the same time, the risk of a broad economic slowdown could hurt the stock, especially because the recent rally that I was talking about makes it more sensitive to knocks. So, rounding off really, essentially, I think Uber has a great product but its barriers to entry are quite low and, by that, I mean there isn’t too much room really between Uber and competitors. I’d say the risks of ups and downs in the short term are quite high but, of course, that’s not guaranteed.

Susannah Streeter: Thanks Sophie, thank you very much, there are clearly lots of companies to keep an eye on in this sector as well. So, we’ve looked at the opportunities for companies, but what environmental, social and governance impacts are the fast-growing tech companies behind the devices having? Well, here to talk to us about all of this is our ESG Analyst, Laura Hoy. So, Laura, there is a lot to unpack here, isn’t there?

Laura Hoy: Yes, there absolutely is. The iPhone launch in 2007 was really the turning point for how influential mobile phones would become and, although that sounds like a long time ago, 16 years is only a drop in the bucket when it comes to innovation. If you think about how much things have evolved over that time period, it can really make your head spin. When it comes to the phones themselves, most of the environmental risks come from their supply chains. From the minerals needed to make their batteries to the water use that comes with manufacturing them. Phones really have an undeniable impact on the planet.

Susannah Streeter: And speaking of those supply chains, Laura, there are labour concerns for these companies as well, aren’t there?

Laura Hoy: Yes, absolutely. When we look at technology hardware, in particular, there are some challenges to be mindful of. Unlike some of the other subsets of the tech space, a larger proportion of the workforce is dedicated to manufacturing and, in many cases, that’s one step removed in the supply chain. Disputes over pay, working conditions, hours and the right to unionise are all added risks for companies in that space. So, to mitigate that, it’s really important that the companies are looking into their suppliers and holding them to account. This can mean things like spending on programmes that will educate and enrich supplier workforces, as well as regular audits.

Susannah Streeter: That’s the phones themselves, but what about the technology they invite into our everyday lives? There are plenty of social risks that come with all of these apps, aren’t there?

Laura Hoy: Yes, the biggest industry-specific risk these software companies face is data privacy and security. Customer data is really as good as gold these days and arguably even more valuable. We do absolutely everything online these days, and there has to be this level of trust that the company collecting the data is going to be responsible with it. Apart from the reputational risk, there’s also a lot of regulatory risk. Companies can be subject to financial penalties if they are careless with customer data, or if they intentionally misuse it.

Sarah Coles: What about the psychological cost of using some of these apps? So, I’m thinking particularly of social media?

Laura Hoy: Yes, Sarah, the impact of social apps is very difficult to unpick. There’s a lot of data suggesting the addictive nature of some of these platforms is harmful from a mental health standpoint. And there’s also an argument to be made that they can be used to mislead vulnerable groups. As we march deeper into the trenches, it’s something that these platforms are going to have to answer for. We’ve seen Facebook parent, Meta, having to untangle itself from this reputation for “fake news.” Not only does it erode users’ trust, it also discourages advertisers, and that’s the bread and butter for most of these firms. You can’t put the toothpaste back in the tube, so to speak, so it’s a monumental task to ask companies like Twitter and Instagram to overhaul their algorithm and police the kinds of posts that get exposure. But it’s certainly a developing risk, and one to keep an eye on moving forward.

Susannah Streeter: Thanks Laura, it will really be fascinating to see how all of these trends develop. So, it does feel like a good time to bring in Bernard Marr, a futurist who explores these technological developments. His latest book is Future Skills: The 20 Skills and Competencies Everyone Needs to Succeed in a Digital World and this explores how technology has changed over the years in the world of work and just what skills we need to get ahead in the jobs of the future. So, Bernard, first of all, how do you think handsets are going to evolve over the next 50 years given that we’ve seen how much they’ve transformed our lives over the past 50?

Bernard Marr: Yes, very good questions, Susannah. And I think they will evolve beyond something we can imagine today. Phones will evolve in the short term. We will see exciting things like more foldable and flexible displays and enhanced biometric security. We will see faster 5G and 6G connections. But the really exciting advancements will come from artificial intelligence and, especially, around augmented and virtual reality technology which will give us an internet that is more immersive than what we have today. Because, today, we rely on these two-dimensional screens that are quite small and, if we can free the world up, even Googling today, if you Google dinosaurs, you now have the option of putting the dinosaurs in 3D into your room or into your garden. And, suddenly, you have a moving dinosaur sitting in your garden that you can walk around with your phone camera and you can zoom in and out and you can see it, and the dinosaurs are making noises. And this is a more immersive world and we will see a lot more of this, be it holographic capabilities or phones that can project 3D images. Or, I believe that the interface that we will use to access the internet, which currently is our slate phone, is going to change. And the most likely candidate is glasses, for this. We will have smart glasses – mixed reality glasses of some sort and companies like Apple, and some that you’ve mentioned, are working very hard on those but, potentially, in the future, we might even have new interfaces like brain/computer interfaces that can directly interact with the world around us by projecting signal straight into our brain.

Susannah Streeter: It’s interesting, you talk about those glasses, they haven’t really taken off so far. What do you think will be the gamechanger? What kind of, say, AI advancements will make people think ‘actually, I need to buy those now’?

Bernard Marr: I don’t think we have this killer application yet. What we’re seeing is lots of the foundations are being built by companies like Microsoft and Meta and others. And we are seeing, initially, a lot of augmented reality applications that will come along. So, for me, a really good example is e-commerce and buying glasses. For example, if you buy glasses online, that has always been a challenge because you can’t really try them on very well. If you want to buy sunglasses and you want to try them out, now we have the AI that supports all of this. We have the augmented reality capabilities on our latest headsets to do this so you can try on those glasses a bit like a Snapchat filter on your phone and companies like Bolle, the French glasses company, they are allowing you to try them on using their back-facing camera but you can also try them out, so you can switch to your front-facing camera and see what the world would look like with the different shades that they have on their sunglasses. And this, for me, is really exciting and if you just project this slightly more into the future where we will have a world where you can try on things as you. So, at the moment, a big limitation in e-commerce is that we buy stuff from companies like Next, we buy lots of different sizes because we don’t know which one fits and then we send them all back and only keep one of them. And that’s obviously causing lots of problems. In the future, you will simply be able to have an avatar of yourself and you can simply use the phone that we have today to scan your body to take images of yourself that then creates a 3D avatar with your exact measurements. AI will know what the different cutting profiles are of the different things you want to try on and then you can try them on. You know, a virtual dressing room.

Susannah Streeter: Fascinating. We’ll be using glasses to buy glasses and all sorts of other things. So, what opportunities does this bring for companies? I mean, can you see already, Bernard, that there are gaps in the market?

Bernard Marr: Yes, huge gaps and huge opportunities. Huge challenges as well. If you think about this world that I envisage, we have this merging together of the real world and the digital world. There are opportunities for companies to create virtual-only goods, for example. We already see this. I can now try on my virtual sunglasses. But there’s a really cool company that now sells jewellery for your Zoom calls. You can put on a necklace or earrings that look very real on a Zoom call, but they don’t exist. And if you think about what our kids do, you were saying that your kids are glued to their smartphones, they are also glued to video gaming. This is a huge growth area. And the kids are now spending a big proportion of their pocket money on outfits for their digital avatars that they have in their games. So, in Rocket League where they buy the best car or in Fortnite, where they buy the latest skins, the latest outfits for their characters. And this is only going to increase. So, the more time we spend in this more immersive, more digitally enabled world, the more we want digitally enabled goods. Companies like Nike buying RTFKT studios is a great example because RTFKT makes virtual trainers, and Nike now sees this as a big opportunity.

Sarah Coles: How about some kind of augmented reality to disrupt education? So, draw to kids away from those games into what they’re meant to be studying? It seems like we’re still waiting for that.

Bernard Marr: Yes, for me, health and education are some of the biggest areas of opportunity in terms of transformation when it comes to the future internet, the more immersive internet that we will see. And it’s really interesting, even when you look at some of the statistics, if we read a book we retain less than 10% of that knowledge. If we experience something, in virtual reality for example, we retain over 80%. And just imagine, instead of reading about Ancient Rome, you can put your goggles on and you can wander around the streets in Ancient Rome together with your teacher and your fellow classmates. There are huge opportunities to make teaching more immersive, more real, and hopefully better for everyone.

Susannah Streeter: But do you think, Bernard, that we might actually come to fear the power of phones in our pockets? Not because of those dinosaurs in the garden that you were talking about, but the creative prowess of AI and what could come?

Bernard Marr: Absolutely. And I think we should not only come to fear this in the future, we should come to fear this right now because a lot of those capabilities are already here. If you just think about what has happened over the last few weeks, we've had Snapchat release an AI friend, basically. So, anyone who uses Snapchat now has a new friend appear. That is my AI. And this is something you can completely customise. You can give it an image of you like and name that you like, and this is enabled by Chat GPT. So, you can have a conversation with this virtual person and that person is also pretty much all knowing because they can answer all your questions. So, I've been talking to a few young kids recently and they're all saying that they stopped using Google and they're just using their Snapchat AI for getting information about pretty much anything. The challenge is that these tools sometimes are wrong. We have no idea where this information is coming from, how reliable it is. This form is a real challenge that we've released these really powerful AIs into our phones. Young kids have access to this. They are starting to use it without necessarily being aware of some of the dangers around this, without necessarily having some of the critical thinking skills that we need to figure out ‘is this really truthful information or not that we're getting?’ And these generative AI tools are only the beginning. We will see a tool that can write music, that can create virtual worlds for us, that can do so much more than just be chat bots. So, we have to be really aware of some of the threats and risks that come with this and we need to prepare our kids to live in a world where we have those tools.

Sarah Coles: So, in terms of AI, do you expect that regulatory bodies will catch up? Or will they always lag behind, so when it comes to developing ‘rules of play’ to govern AI in the future?

Bernard Marr: If the past is anything to go by then regulators will lag behind and, what we’re seeing at the moment, is that the pace of change is only going to accelerate. This is something that I predict is going to happen in the future even more, where technologies like metaverse technologies and artificial intelligence and blockchain, all these truly transformative technologies, will all interact with each other and accelerate each other. And I don’t think we will have a regulatory environment any time soon that can keep up with this. And that will become even more difficult in the future. I think there will be some regulation, we need that I think in this world, but technology is racing ahead so fast that it will always be difficult to create a world where we trust the regulator is in control here.

Susannah Streeter: Now, Bernard, you’ve also been looking into how to stand out in the digital world and try and use these advances to our advantage. How should we go about doing that?

Bernard Marr: I think it's really important to understand what these technologies can do and how fast they are advancing. So, when I talk to people about quantum computing and blockchain and NFTs and augmented and virtual reality, most people have a limited understanding of it but they don't really, truly understand where this technology is going, how fast it is developing and what it might mean for their industry, for their businesses and for their own jobs. So, this is a really important starting point. Start understanding some of these key technologies that are transforming our world, and I talk about digital literacy here. So, having an awareness of some of these digital trends and how they are racing ahead and then we need to have some technical skills, we need some skills around data. We need to have these digital threat awareness skills. So, we understand and mitigate some of the risks that come with all of this. But beyond this, all this I cover in my book, are really, truly human skills. They are things like critical thinking, judgement, and complex decision making, emotional intelligence, creativity, being able to collaborate with others in teams. Having these really strong interpersonal communication skills. These are the skills that we will need in the future as humans to stand out, and basically that enables us to then use those capabilities of these amazingly powerful AIs to help us achieve more and hopefully solve some of the biggest problems the world is facing.

Susannah Streeter: Well, let’s hope so. Bernard, thank you so much. It’s been really fascinating to talk to you.

Bernard Marr: Thank you so much for having me.

Susannah Streeter: So now, I’d like to bring in Emma Wall, our Head of Investment analysis and research here at Hargreaves Lansdown. She’s been speaking to Jeremy Gleeson from AXA Framlington.

Emma Wall: Hi Jeremy.

Jeremy Gleeson: Hi Emma.

Emma Wall: Quite timely. At the time of recording, we've actually had some news about a chipmaker spinning out to list in New York, but was started in the UK. I thought that'd be quite interesting point to kick off on, the fact the UK actually has been quite pioneering in this space and without some UK companies and UK technology, we probably wouldn't have the advancement in the mobile phone we had today, would we?

Jeremy Gleeson: No. Totally agree. Companies like ARM Holdings, Imagination Technologies, Wolfson and Dialogue Semi, which are all British semiconductor companies, have all contributed somewhat significantly to the evolvement of the mobile phone over the years.

Emma Wall: And why do you think we see these types of technologies in the UK, albeit though, they go to list elsewhere, but what is it about the UK tech that inspires this kind of innovation?

Jeremy Gleeson: One aspect is that success breeds success. So, when you get good companies in a particular region, you tend to get other companies also forming in that region because there is a good access to the certain types of engineers required to develop those types of products.

Emma Wall: And in terms of investment opportunities then, pivoting because that’s your day-job, looking for kind of tech stars of the future. Of course, should caveat, not every company will be a success but what is taking your eye at the moment. Where are you seeing the kind of greatest opportunities linked to that innovation and, kind of, mobile devices?

Jeremy Gleeson: We are now looking at the overall smartphone market as being a relatively mature market. The overall number of units sold per year has pretty much flat-lined for several years but, within that, there is constant innovation within the industry and we see that with new applications and new components being put into these devices on an ongoing basis. So, I think one of the interesting things they can place on the smartphone market over the last few years is the, sort of, the removal or the pending removal of buttons. So, those manual features on the phones, which arguably are a point of failure, will be, over time, replaced by digital or haptic buttons and that requires different types of serving conductors and new types of semiconductors. So that's an interesting area. And the other interesting area is that we're using our mobile phones a lot more for recording videos and watching videos and we want to have better quality videos as a result of that. So, the emergence of technology which is helping stabilise video recordings so that they don’t look shaky, that's really important and that's one of the reasons why these devices have seen an increasing amount of popularity. We've seen an uplift in prices over the last several years. People are now spending as much money on buying a mobile phone or a smartphone as they would pay for a computer or a laptop. And that's because of all the functionality that they’re getting out of these devices.

Emma Wall: You’ve given us the context, what about the companies that are doing this well, in your view?

Jeremy Gleeson: The obvious name you have to mention when you talk about the smartphone industry is Apple. They only entered the smartphone market around about 15 years ago, and yet they're probably the name that is mostly connected with the smartphone industry now. In terms of units sold, they probably have only around about 15% market share of the industry on a yearly basis. But, in terms of their dollar share or their pound share of the overall market, it's significantly greater because of the price that they sell their devices for. And the profitability that they make out of those devices means that their profit share out of the entire industry is pretty much dwarfing everybody else. But then there are huge number of components that go into these devices. Qualcomm is a U.S. company, one of the leading providers of the modems which enable these devices to connect to the network. They are in phones from manufacturers all around the world, from Koreans, Chinese and also Americans in terms of Apple devices. And that's a really important component. That is what, kind of, dictates the quality of the connection that the consumer has, whether they're making a voice call or a data call.

Emma Wall: You've talked there about the manufacturer of the phone. What about something else that we've come to expect from our phones?

Jeremy Gleeson: There's a company called Cirrus Logic and they actually acquired a Scottish company called Wolfson several years ago and their expertise started off in the area of microphones. Being able to, sort of, make sure that they got good quality microphones and good quality sound as well. So, microphones and speakers. Increasingly, we are happy to listen to our music on our phones. They have also, sort of, expanded their technology road map to provide image stabilisation technology and provide some of these other components which are allowing for buttonless devices as well.

Emma Wall: And what about the next big thing? I'm slightly putting you on the spot here, but you know, we watched with real interest some of the conferences that have been out of action through the pandemic and the last year we've started to see big conferences again about the future of tech. Where do we go from here? What is the future of the mobile phone look like?

Jeremy Gleeson: You kind of have to sort of really scratch your head to think ‘Well, what else could we do?’ I think payments is just going to evolve more and more. And the convenience of making payments using your mobile phone just gets better. Biometrics means that there's a high level of security which is tied to those payments, which you don't have with a plastic card in your wallet. And obviously, I think more people are wanting to move away from cash in general. But health is another aspect. I think we’re going to see more and more aspects of us being able to monitor our health, monitor our fitness, maybe get flags and notifications when something might be going awry, and they're going to come through our mobile phones. Maybe linked to a periphery device which is monitoring some aspect of your overall health. But sending that data back to your mobile phone. There is a company called Dexcom in the US who makes monitors for diabetics to be notified when their glucose levels are falling and they can then do something about it. And the good thing about this is it's 24-hour monitoring. So, if you're starting to see your blood sugar level fall in the middle of the night, your phone can notify you.

Emma Wall: Really exciting innovation. Jeremy, thank you very much.

Jeremy Gleeson: Thank you.

Susannah Streeter: Well, that was Emma Wall, speaking to Jeremy Gleeson from AXA Framlington, and please bear in mind these are the views of the fund manager and are not individual stock recommendations. You’re listening to Switch Your Money On from Hargreaves Lansdown. And now it’s that time for our stat of the week and, Sarah, you love a money-spinning yarn, so can you guess how many old phones have been sitting in our cupboards, drawers or under beds, ostensibly kept ‘as spares’ but basically just doing nothing?

Sarah Coles: I know there must be tens of millions. I still have my old Nokia from the early 2000s that I can’t bear to part with yet, and I can’t be the only one.

Susannah Streeter: You’re not. It is, according to Deloitte, 24 million. So, can you hazard a guess as to how much that mountain of old phones is believed to be worth?

Sarah Coles: Well, I know there’s value even in the most destroyed phones. My teenagers are a dab hand at ruining a phone, and we still manage to sell them on. Because someone somewhere can use them.

Susannah Streeter: Well, Deloitte has put a price tag of £1 billion pounds on it. Last year alone, 7 million smartphones worth over £500 million were expected to be retained as people upgraded to newer models. You see in my house, we pass them onto the teens and we have a big mobile phone repair box going on. My husband has become a bit of a dab hand at mending screens.

Sarah Coles: But that is an awful lot of cash just sitting there, so I’d really recommend anyone browses the internet auction houses to see how much they could get for a handset. Even if it’s wrecked.

Susannah Streeter: Ooh, whoops! Just dropped my phone. Thankfully, the screen’s intact. That’s all from us this time, but before we go, we need to remind you that this was recorded on May 2nd 2023, and all information was correct at the time of recording.

Sarah Coles: Nothing in this podcast is personal advice. You should seek advice if you’re not sure what’s right for you. Unlike the security offered by cash, investments rise and fall in value, so you could get back less than you invest.

Susannah Streeter: Yes, this is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.

Sarah Coles: And this hasn’t been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.

Susannah Streeter: Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing.

Sarah Coles: You can see our full non-independent research disclosure on our website for more information. So, all that’s left is for me to thank our guests, Bernard, Jeremy, Sophie, Laura, Emma and our producer Elizabeth Hotson.

Susannah Streeter: Thank you so much for listening. We’ll be back again soon, goodbye.