What’s Stopping Phone Manufacturers from Global Crypto Adoption?
Why not Global Crypto Adoption
Widespread crypto adoption poses a number of challenges regardless of industry, making the mobile phone market no exception.
There have been a number of attempts made to increase the adoption of cryptocurrencies. This includes a helping hand from Mastercard, who has launched a new multi-currency payment card.
However, it seems phone manufacturers are still not fully convinced.
Over the last decade, there has been a steady growth in the adoption and use of crypto, increasing in many different countries across the globe.
Cryptocurrencies, Bitcoin the first of its kind, which was launched in 2009 and has since spawned an array of other cryptocurrencies, opened new prospects for the transaction of goods and investment.
The chart below gives us a good representation of the percentage of people who do own and use crypto in these selected countries.
(Source – Statista)
Trading in crypto minimizes transactional fees, offers borderless payments, access for all parties involved, and offers an immediate settlement.
After the published white paper by still-unmasked Satoshi Nakamoto which outlines the use of Bitcoin, no one could have predicted how popular and game-changing the crypto revolution would become, and that too, in such a short space of time.
Global Crypto Adoption
According to Chainanalysis’s Global Cryptocurrency Adoption index, Russia, Ukraine, and Venezuela have been the top three countries for crypto adoption in 2020.
The table below outlines the top 10 countries that have adopted cryptocurrency in 2020, indicating that developing countries are among the most popular users, driving retail crypto adoption with Ukraine leading the way.
(Source – Insights)
Although China and the US are still delivering a sizable portion of crypto transaction values globally, the top ten charts reflect how smaller countries are considerably more active users of digital currencies out of the 154 countries that were analyzed.
Twelve of those countries had so little digital currency activity that they were given a score of 0, implying crypto still has a long way to go.
With this in mind, let’s explore some of the reasons why phone manufacturers might be reluctant to step into crypto adoption.
The Fear of Crypto Adoption among Phone Manufacturers
Although large smartphone manufacturers have continually been adding crypto features to their phones, they seem to be sheepish in the area of accepting crypto as a method of payment.
It is believed that this is largely down to, not only the rise and fall in crypto interest but also the economy and its stability as a whole.
There also seems to be a huge amount of trust issues that come with using cryptos such as needing to insert regulation and mirroring them to reflect the county their products are being sold in and the organization’s own reputation.
Privacy and trust and the scalability of how far their products will go using crypto is also another considering factor.
Many manufacturers fear that the positive rise in crypto will naturally come crashing down, causing them to lose a considerable amount of profit, especially if they allow consumers to purchase their products using digital currency.
In relation to fiat currency, there is an understandable level of fluctuation, which is represented by the economy as a whole, but the risk seems to be far less great.
In 2019, HTC launched its blockchain phone which could only be brought with cryptocurrency. Unfortunately, their efforts did not prove successful, and so they revised their strategy and began to accept fiat currency.
This is a clear indication of not only the reluctance of consumers purchasing crypto but also the lack of demand for it.
Recent statistics such as the ones above may help make phone manufacturers take a leap of faith into adopting cryptocurrency as a method of payment for their products, but only in these specific countries where there is a rise, and arguably a demand, for accepting digital currencies.
Could a Stagnant Phone Market also be the Problem?
In an already stumbling phone market, the pandemic has seen things go from bad to worse. Declining figures in handset sales in an already stagnant market was most definitely not welcome.
In comparison to the past, smartphone users have not been upgrading their handsets which have caused the market to slow down.
Although competition between rivals is still fierce, the array of phones launched year on year is simply not enough to get consumers wanting to spend their money, especially as many of them feel their current handsets still have a good amount of life left in them. According to Gartner, global smartphone sales declined by 20% in 2020.
Unfortunately, the figures present in the table above show a very bleak picture for the smartphone market overall across all tech giants for the year 2020.
Understandably, 2020 has been a challenging year in more ways than one, but the decline in interest paired with what was an already stagnant market indicates that recovery from this year will be hard.
For this reason, it could also be argued that phone manufacturers are reluctant to dive into the ocean of cryptocurrencies.
However, the silver lining to this is that the stagnant market has forced manufacturers to push innovation, aiming to launch new, more advanced smartphones with greater technology. With this in mind, the future of the smartphone market could look very different from now, prompting