Only 1 in 5 smartphone buyers choose to add device insurance. So there is huge headroom for growth across both traditional and emerging players.

Strategy Analytics has completed our latest wave of online research on smartphone, smartwatch, and TWS earbud device ownership, purchase intentions, attitudes and brand preferences across five markets – Australia, Brazil, Germany, UK and USA.

This blog highlights our analysis of smartphone insurance attach rates, attitudes and barriers to adoption by:

• Country
• Smartphone Brand
• Retail Price Tiers

The sample included consumers 18+ years old, nationally representative of key demographics such as gender, age, income, region.

• Over 6,000 surveys were completed:
• • US   - 1277
  • UK -  1224
  • Australia – 1,242
  • Brazil – 1,291
  • Germany – 1,213

One in five smartphone buyers add insurance and an amazing 90% are Completely/Mostly Satisfied.

Smartphone Insurance  is largely untapped beyond USA.

US attach rates for smartphone insurance are double those seen in other countries. This reflects the higher share of Apple iPhone devices in the base and the more advanced share of 5G relative to other countries in this wave of research. Awareness of insurance options is significantly lower outside of the US.

• Germans more likely to use insurance to repair smartphones than replace

Acceleration of 5G sales, the emergence of foldable form factors and continued imaging feature wars will drive retail ASP higher and further encourage insurance revenue.

Significant upside potential is seen with 1 in 3 intenders expecting to buy insurance for their next smartphone. Brazilian online users are most bullish with insurance penetration expected to jump +20 points for their next smartphone.   Unsurprisingly, insurance take-up is positively correlated with device price tier and Apple owners have the highest attach rates (+7 pts vs Samsung).

Xiaomi and Motorola have lowest take-up today but both groups expect to see strong growth for their next smartphone.

As Xiaomi, Oppo, vivo, realme, Honor  and others move up the price tiers the cost/benefit trade-off will shift significantly

1 in 3 owners think they don’t need insurance because they are careful with their smartphones. results vary by country and demographics.

However, the industry is missing significant opportunities with 1 in 3 non-insured reporting they either weren’t offered insurance or were unaware of benefits of insurance.  Over 20% of smartphone buyers are unsure yet and could be convinced to buy insurance with the right value propositions.

Smartphone Insurance and the broader market for insurance of smart wearables, smart speakers and other smart home products remains relatively undeveloped.

Some key questions for further consideration include:

• How does adoption of smartphone insurance vary by brand and product family/models? What types of coverage will resonate beyond replace/repair in key demographics?
• What is the relationship between the vendor certified refurbished, operator refurbished and other secondary market devices?
• How do smartphone insurance attach rates and satisfaction change between online and offline buyers?  Between different types of retailers?
• How will demand for insurance evolve across Brand Lovers, Value Optimizers, Techno Driven and Budget Utility owners?
• Beyond loss/theft/repair what  bundles can be developed that tap into emerging megatrends around sustainability, privacy, security, my data?

I would be delighted to discuss these topics with you in more detail. Reach out to me dkerr@strategyanalytics.com or https://www.linkedin.com/in/dkerrsa/  if you would like to receive a  summary of this research or discuss in further detail.