To solve this problem, let’s divide this problem into 2 parts

• phones with people out there in the world
  • phone people
    • using them as primary device (x)
    • using them as secondary device (y)
  • old phone
    • lying around at there home (z)
  • Wasted phone
    • dumped (a)
• phones getting manufactured by companies
  • phones in shops – offline stores (b)
  • phones in warehouses (c)

Calculating x

• Total population in world – 700 cr
  • Assuming 90% of people in the world (today) has 1 phone – smartphone or feature phone (due to tech innovation, cost reduction) = 630 cr

Calculating y

• Who will keep >=2 phones?
  • Assumption – People who are working or business class will have the need (but not all will keep >=2 phones) ~ 20% of total world population
  • Assume only 10% of working class will only keep >=2 phones
  • 20% * 10% * 700 cr = 12cr (approx)

Calculating z

• Due to tech innovation a lot of users will be switching to new phones; hence making the old phone either exchanged or buying a completely new phone
  • High income users will switch to new phones frequently and assuming they do it in on an average of 3 years = 10% * (1/3) * 630 = 20 cr approx

Calculating a

• Assuming phones break or go wasted as they go old.
  • 1% of phones gets lost = 1% * 630 = 6.3cr approx

Calculating b

• Phones in shop = assume 10,000 cities in world (top) * 1000 shops each keeping phone (on average) * 50 phones / shop = 50cr

Calculating c

• Phones in warehouse =  Assume 20 phone manufacturers * 100,000 phones per day * 180 day (6 month inventory management) = 40cr (approx)

Total = 630 + 12+ 20 + 6.3 + 50 + 40   ~750cr

Assumptions:

Only smart phones and feature phones. Specialized phones like satellite phones etc. are not included

Affordability – People spend a minimum of a month’s salary on smart phone

Unemployment <10% in most economies.

Mobile phone penetration to be in high 90’s among people who can buy

Male:Female ratio = 1:1

Formula:

Total smart phones = Used + Unused

Used = Used by Primary users + Used by secondary users + People with dual phones

Primary Users = All the working population (assuming tech phone penetration to be in high 90’s among this population)

Secondary Users = Eligible family members from this working population

Estimation:

No. of people in the workd = 7bn

People in the working age 20-60 yrs (Assuming equal distribution and life expectation of 80 yrs) = 4/8*7 = 3.5 bn

Remove unemployment rate = 3.15 bn

Price of smart phones > 100$. Possible no. of people earning more than 100$/month (Proxy of service/knowledge economy ~30%) = 30%*3.15~ 1bn

Among this class ~60% of women work and 100% of men work. No. of smart phones = (100%*50%+60%*50%)1bn=800 mn

Price of feature phones > 15$. People earning more than 15$/month = Roughly the rest of the working population = 2.15bn

Among this class ~ 20% of women work for money and 100% of men work. No. of feature phones = (100%*50%+20%*50%)2.15 bn ~1.2 bn

Total used by primary users = 2 bn

Secondary users

10-20yrs of age = 1/8*7bn ~900mn. 60-80 yrs of age = 2/8*7bn ~1.75 bn. Total ~ 2.6bn

Split into higher income & lower income in 30%:70% ratio = 800mn & 1.8bn. Assuming Only higher income families can afford phones for non income members.

Secondary users = 800 mn

Business users needing >=2 phones –> Assuming 5% of the working population in higher income category = 5%*800mn = 40mn

Unused phones not sent for recycling = 20% of all phones = 0.2 times total used phones

Total used phones = 2bn + 800mn = 2.8bn

Total phones = 1.2*2.8bn = 3.3 bn