CEOs are focused on five critical areas that will define business success in the coming years as organizations navigate economic uncertainty, technological disruption, and shifting regulatory landscapes. From automation and AI-driven transformation to ESG and customer experience, today’s leaders are making strategic investments to ensure long-term resilience and growth.

Let’s investigate what is top of mind for CEOs as they prepare for the future, and which steps to take.

AI-Driven Workplace Transformation & Automation

Automation is no longer just about efficiency, it’s about enabling data-driven, decision-making at scale. CEOs are prioritizing intelligent automation strategies that streamline operations, reduce costs, and unlock new revenue opportunities. Organizations are leveraging automation to improve forecasting, enhance productivity, and innovation.

Ensuring employees are equipped to work along technologies is a key challenge in integrating automation into existing workflows. Ethical AI implementation, addressing bias in automated decisions, and maintaining transparency must be considered in AI-driven operations.

Those who invest in automation with a clear strategy will gain a competitive advantage, while those who resist will face operational inefficiencies and stagnation.

A top concern for CEOs as AI rapidly reshapes business function is workforce transformation. IDC predicts that by 2026, 20% of knowledge workers will take charge of their work transformation, using AI tools to automate workflows. Organizations will need to balance the benefits of empowered, efficient workers against potential risks related to AI governance and process consistency.

Companies must also consider responsible and ethical AI implementation. Those who invest in automation with a clear strategy will gain a competitive advantage, while those who resist will face operational inefficiencies and stagnation.

Regulatory Flux: Navigating Compliance Challenges in a Shifting Policy Landscape

Regulatory uncertainty continues to be a significant challenge, particularly as AI, data privacy, and ESG policies evolve. CEOs must stay ahead of emerging regulations, ensuring compliance while maintaining operational agility.

Businesses are investing in regulatory intelligence and governance frameworks that allow them to adopt new policies quickly. Those that proactively integrate compliance into their strategic planning will be better positioned to navigate risk and capitalize on emerging opportunities. In the AI space, evolving laws around data privacy, bias mitigation, and AI accountability are prompting organizations to develop strong internal compliance programs.

Additionally, ESG regulations are tightening, requiring companies to provide greater transparency in their sustainability practices. Organizations that fail to adapt risk significant fines, reputational damage, and operational disruptions.

CEOs can influence industry regulations while ensuring their businesses remain competitive by prioritizing proactive compliance strategies and engaging with policymakers early.

Customer Experience Squared: Rising Expectations for Digital Services

Consumers and citizens alike expect seamless, personalized digital experiences—across all industries. CEOs recognize that customer experience (CX) is no longer just a differentiator; it’s a necessity.

AI-driven personalization, real-time engagement, and frictionless digital interactions are becoming the standard. Organizations that prioritize CX will see stronger customer loyalty, while those that fail to meet expectations risk losing relevance in an increasingly digital-first world. To anticipate customer needs and deliver personalized solutions in real-time, companies must invest in AI-powered chatbots, predictive analytics, and omnichannel experiences.

Furthermore, digital trust remains a key factor—organizations must ensure that their data collection practices are ethical and that customers feel confident in their interactions. By embedding AI and automation into CX strategies while maintaining a human touch, businesses can cultivate lasting customer relationships and drive long-term success.

Expanding Digital Security Frontiers: Fortification Against Multiplying Threats

As organizations accelerate digital transformation, cybersecurity risks continue to grow in complexity and scale. CEOs are prioritizing robust security frameworks that can withstand sophisticated cyber threats, ensure regulatory compliance, and protect sensitive data. The increasing adoption of AI, cloud computing, and IoT technologies has expanded the attack surface, making proactive security strategies more critical than ever.

Organizations are implementing zero-trust architectures, AI-powered threat detection, and enhanced identity management systems to safeguard against cyberattacks. Cyber resilience is no longer just an IT issue—it is a core business imperative. CEOs are working closely with security leaders to embed cybersecurity into business strategies, ensuring that security investments align with operational priorities.

Additionally, cyber risks extend beyond the enterprise, with supply chain vulnerabilities and third-party security breaches posing significant challenges. Companies must take a holistic approach, integrating security into every stage of digital initiatives and fostering a culture of cyber awareness across all levels of the organization.

Future-Proofing Against Environmental Risks: ESG Operationalization and Risk Management

Sustainability is no longer a corporate social responsibility initiative—it’s a business imperative. IDC foresees that by 2027, 75% of customers will expect CO₂ emissions data on everything from build, operate and disposition of their IT assets to assist with their overall corporate sustainable goals.

Therefore, CEOs are now embedding environmental, social, and governance (ESG) principles into their operations to mitigate risks, meet stakeholder expectations, and drive long-term value.

As ESG regulations tighten and investor scrutiny increases, companies that align sustainability with business strategy will be better positioned for future success. However, operationalizing ESG requires more than just meeting compliance standards; it involves integrating sustainability into business models, product development, and supply chain operations.

Businesses that effectively integrate ESG into their corporate strategies will mitigate risks, build stronger relationships with investors, customers, and employees while sustaining competitive advantages.

Conclusion

CEOs are facing a complex landscape where technology, regulation, and shifting consumer expectations intersect. Those who embrace automation, invest in AI-driven workforce transformation, navigate regulatory change proactively, prioritize customer experience, and operationalize ESG strategies will mitigate risk and drive sustainable growth.

Organizations that take a strategic, forward-looking approach to these pressing challenges will thrive in the future. Leaders who prioritize agility, innovation, and ethical business practices will shape the next generation of successful enterprises. By staying informed and adapting to change, CEOs can ensure their companies remain resilient and competitive in an evolving global economy.

Interested in learning more about who is leading the AI revolution? Our new eBook explores the C-suite’s strategic priorities for AI adoption and offers key insights on implementation challenges, opportunities for innovation, and actionable steps to ensure AI delivers tangible business outcomes.

“Change” has been the theme in tech marketing for the past several years. We recently published the results of our 22^nd annual tech marketing spend benchmark, IDC Tech Marketing Investment Guide for 2025 Planning: Benchmarks, Key Performance Indicators, and CMO Priorities.

The results reflect the acceleration of digital transformation over the past five years, the rapid adoption of GenAI, and marketing’s response to the permanent shift in consumer and B2B buying behavior. The trendline indicates that marketing has officially entered the next era – the AI experience era.

A Look Back at Marketing Since the Dawn of Digital

In 2007, social media was introduced to the world, forever altering how consumers obtain information and engage with brands. For the next decade and a half, marketers embarked on a digital transformation of both customer engagement and internal operations.

Digital, social and demand centers of excellence were formed. Automation platforms for both marketing and sales were adopted. Use of analytics and database marketing placed the responsibility of creating leads and driving demand, squarely in marketing’s remit.  

In 2023, GenAI changed the game.. Creative capabilities were broadly placed into the hands of all marketers and citizen creators. Searching and gathering information was augmented and in some cases, replaced by GenAI applications such as ChatGPT. In the 2024 B2B Tech Buyer Behavior Study, 20% of respondents stated they are using AI Chatbots to search and for discovery of information, brands and vendors. This has lead marketing leaders to take full responsibility for the digital customer experience and the orchestration of the omnichannel experience.

The 4 Biggest Things to Happen to Marketing in the Next Decade

Marketing’s Remit Has Expanded

Starting back in 2021, IDC Research showed that marketing’s #1 remit was driving business growth. In the 2023 Marketing Organizational Models study, at least 80% of senior marketing leaders stated they carry the responsibility of digital customer experience, employee communications, internal brand communications and marketing technology.

In 2024, IDC research found that CMOs are now assuming the role of the Chief Market Officer, expanding marketing’s role with the full accountability across the go-to-marketing engine, including sales.

As a result, the technology marketing spend benchmark found a 10.8% increase in marketing investment year-over-year. The allocation of investments have evolved, increasing the investment in marketing technology program spend by 26% and allocating 3.4% more to staffing of MarTech roles.

Digital experience roles have evolved far beyond email and phone outreach to know include managing chat and mobile/SMS engagement. Web and social media marketing staffing has grown 8% as a result of advertising staff experiencing a shift to enable more social media efforts, mobile advertising, pulling work in-house from agencies.

The AI Disruption

56% of benchmark participants anticipate a 10% or higher ROI from GenAI in the next 12-18 months. A quarter of marketing leaders believe that GenAI represents a major opportunity and are striving to be leaders, even if it means making mistakes.

GenAI is actively being utilized across marketing. 97% of marketers are leveraging GenAI to support content marketing, including dynamic SEO optimization, creating derivatives of content, translating and localizing.

82% of marketers are supporting the evolution of web marketing, beyond digitally delivering analog content (i.e. PDFs) to incorporating more interactive and immersive content, such as personalized digital assistants, hyper-personalized web pages and personalized offers.

Marketing operations are also experiencing substantial benefits from GenAI with close to 80% of marketers focused use cases such as micro-segmentation, more real time insights and gathering voice-of-the-customer. 

ABM Gives Way to Personalization-at-Scale

While the term “Account Based Marketing” or ABM is still floating around, less marketers are focused on continuing to enable personalized marketing for a subset of the customer and prospect base.

Instead, marketers are leveraging GenAI to achieve personalization-at-scale. The benchmark study found an increase in industry and audience marketing staff positions as marketers are created horizontal teams focused on connected experiences, moving beyond marketing to one persona and instead focusing on the whole marketing journey. 

A key dependency for GenAI and personalization-at-scale is the health of marketing’s data infrastructure. Marketing is only as good as the data it runs on. Recognizing how critical intelligence is to AI experience marketing, marketers rebalanced their intelligence investment across competitive, customer and market intelligence. The investment in the MarTech stack sits at 4.4% of the marketing budget, with a 22.4% surge in data and analytics spending year-over-year.

Marketing to GenAI

There is a lot of conversation around GenAI evolving the marketing function, even changing marketing roles. Did you consider that soon you may be marketing to GenAI agents of your customers? Even having your own GenAI agent engage, rather than a marketing or sales representative? In the 2024 B2B Tech Buyer Behavior Study, 73% of B2B buyers stated they would use more AI guided selling assistants to act as an intermediary between themselves and vendors, such as doing product comparisons, responding to RFI/RFPs, answering technical questions and providing quotes and configurations. 

Shoring up your data, tech stack, digital experience enablement, and LLM optimization is critical. This requires a combination of technology and UX in addition to continued investment in technology and experience platforms.

It is also essential to make sure you have the right people to deliver. Marketers must continue to up-skill and hire staff that understands how to train and prompt LLMs, design and implement omnichannel experiences.

Over the last five years, we have seen the shift in the priorities and focus of marketers through their marketing investment trends. IDC Research finds that the executive team now has a spotlight on marketing’s technology investment and the maturity of customer intelligence.

To deliver to marketing’s strategic responsibility and expectations, leaders need to maintain the investment focus on maturing the core AI experiential capabilities, essential for marketing in the experience era. 

B2B commerce is evolving at an unprecedented pace. Rapid technological advancements, evolving customer expectations, and market dynamics are paving the way for increased adoption of digital commerce platforms.

B2B organizations are reaping the benefits of enhanced sales efficiency, improved profitability, and better customer experiences. However, as the B2B digital commerce landscape becomes more complex, organizations must stay attuned to emerging trends and address related challenges in an agile way. This means transforming their operations and strategically aligning their resources to maintain a competitive edge in this dynamic landscape.

B2B Digital Commerce Is Increasingly Becoming Experience Driven

Business buyers now demand personalized interactions expecting streamlined product discovery and context-aware recommendations. Role-based personalization, while addressing the collective needs of buying groups, will be crucial in B2B sales. Additionally, self-service capabilities can empower buyers and reduce friction in complex buying scenarios.

This means empowering them and giving them a sense of control over the buying process, while also providing the crucial “human touch” to aid decision making. As sellers continue to drive a significant part of the buying experience, they can benefit from personalized support, increased automation, and streamlined workflows so they can focus on strategic selling. Tools like digital sales rooms exemplify this synergy between digital tools and human expertise by creating collaborative environments where buyers and sellers can interact efficiently.

AI Is Transforming Every Facet of Digital Commerce

From hyper-personalized interactions to predictive analytics, AI is poised to transform the entire buying journey. AI-driven product configuration tools can streamline workflows and provide dynamic and needs-based solutions. Generative AI (GenAI) offers new opportunities for workforce enablement and customer engagement.

AI agents can further transform this through autonomous decision-making and self-optimizing processes, reimagining how organizations interact with their customers. To fully leverage this potential, B2B organizations must build robust data foundations and enable their workforce to fully leverage AI’s potential.

Sustainability as a Strategic Imperative

Embracing sustainability is becoming a strategic necessity for organizations. B2B organizations must integrate sustainability considerations into their digital commerce strategies to effectively meet operational objectives, regulatory demands and customer expectations. This includes adopting circular economy principles, enhancing transparency in sourcing, and minimizing the environmental impact of their fulfillment processes.

Digital platforms are also crucial for driving sustainability efforts such as marketplaces for used products that promote recycling and sustainability. An example of these are marketplaces for used EV (electric vehicle) batteries which promotes their effective retrieval and recycling.

Continuous Adaptation and Proactive Compliance Are Key To Thrive

An ever-evolving regulatory and geopolitical landscape requires a proactive approach to compliance and risk management. The stakes are high, with non-compliance potentially leading to substantial economic losses, reputational damage, and loss of customer trust. Thriving in this landscape will require continuous monitoring and adaptation, along with fostering awareness and good compliance practices within organizations

How Can Companies Thrive in This Complex Landscape?

Invest in Digital Technologies That Enable Agility

Embrace an agile approach to digital commerce and strategically align your technology stack. Invest in technologies that can scale and support evolving needs. Composable and API-first solutions can provide flexibility and enable rapid adaptation to evolving market requirements.

Enable Your Workforce to Leverage AI-Enabled Tools

Prepare for an AI-driven future by investing in employee training and change management. This will ensure your workforce is comfortable and proficient in using AI tools across various business functions. When leveraging AI to enhance customer interactions, maintain a balance with human connection. Personal relationships will remain crucial in driving transparency and building trust with your customers.

Understand How Digital Commerce Fits in Your Overall Sustainability Strategy

Begin by assessing how to integrate sustainability into your digital commerce strategy.  This could involve designing metrics to measure your sustainability impact.  A broader approach includes embracing circular economy principles and increasing transparency regarding the sustainable footprint of your products and suppliers.  This allows you to simultaneously satisfy growing customer demand and meet evolving regulatory requirements.

Foster Change Management

Cultivate a data-centric organization where employees are comfortable working with and sharing data to drive data-driven decisions.  Furthermore, promote awareness and compliance practices throughout the organization.  Strategically leverage digital technologies to support your company’s compliance and risk management processes.

Navigating the Future of B2B Digital Commerce

By focusing on these key trends, B2B organizations can navigate complexities and position themselves for success.  An agile approach will be crucial for effectively addressing challenges. The ability to pivot quickly and respond to change will provide a competitive advantage, enabling B2B organizations to capitalize on emerging opportunities and thrive in this evolving landscape.

When it comes to doing business, time isn’t just money — it’s also your competitive edge. Yet many organizations waste this precious asset on IT procurement processes that can stretch six to nine months. That’s a lot of time — and a lot of lost sleep, particularly for today’s CIOs.

As technology rapidly evolves and IT governance takes center stage, the role of the CIO has never been more dynamic — or demanding. Today’s CIOs have transitioned from overseers of IT infrastructure to serving as business strategists, innovators, and drivers of organizational transformation. They’re managing procurement teams, integrating cutting-edge solutions, and addressing legacy system challenges — all while juggling tight budgets and even tighter timelines.

The mandate is clear for 2025: deliver more efficiency and greater strategic value, faster. Yet, traditional procurement undermines this goal, bogging down the process with manual tasks, lengthy approvals, and inefficiencies that slow progress when speed is critical.

Let’s pull back the curtain on some of the key pain points:

Lengthy Timelines: Delays in software sourcing can hold up the launch of new projects — putting organizations at a significant disadvantage.

Legal Bottlenecks: Complexities in contract negotiations and compliance reviews can add significant human-hours to the process and weeks or even months to timelines.

Data Deficiencies: Seventy-five percent of organizations struggle with inadequate data analytics, leading to poorly informed decisions. (Veridion)

Resource Strain: Overestimating the maturity of procurement processes and misjudging workloads can put undue pressure on teams.

Legacy System Integration: Adopting new software while managing outdated systems can be a logistical nightmare.

Supplier Risks: Evaluating vendor performance and mitigating risks can consume significant time and resources.

The list is daunting, but there’s hope ahead.

Strategic Software Sourcing: The AI Advantage

AI-powered sourcing platforms are transforming the process by automating manual tasks, improving decision-making, optimizing costs, and enhancing efficiency. They empower businesses to move faster, better mitigate risks, and make smarter technology investments.

While time is certainly money, it’s also essential to understand strategic sourcing — a proactive and future-centric approach to software procurement. Unlike traditional methods that focus solely on immediate cost, strategic sourcing aligns procurement decisions with sustainable business goals. It emphasizes long-term supplier relationships, total cost of ownership, and demand forecasting.

Strategic sourcing is about thinking ahead. It’s not about finding the cheapest solution; it’s about finding the right solution that delivers value over time. AI supercharges strategic sourcing, addressing major pain points with precision, analytical intelligence — and the all-important speed.

Here’s how AI can help:

Automate Routine Tasks: Routine tasks like data validation, purchase order management, and contract analysis can bog down procurement teams. AI automates these processes, reducing errors and freeing up professionals for more engaging work.

Accelerate Timeline: Efficient and effective AI-driven platforms can cut procurement cycles significantly, enabling organizations to launch projects faster.

Enhance Data Accuracy: Although most organizations use data analytics, less than 20% are satisfied with the results. AI can improve data accuracy and provide actionable insights for better decision-making. (CIOinsight)

Optimize Demand Forecasting: Procurement teams often rely on guesswork when it comes to forecasts. AI can use predictive analytics to ensure the right resources are available at the right time.

Mitigate Supplier Risks: AI can evaluate supplier performance, identify potential risks, ensure compliance with regulations, and increase transparency and trust.

Reduce Costs: By automating much of the process — and freeing teams for more strategic work — AI can help achieve significant cost savings while maintaining high-quality outcomes.

The Bigger Picture

AI doesn’t just make IT procurement faster — it redefines what’s possible. By accelerating access to new technologies, AI fuels innovation and keeps businesses ahead of the curve. Streamlined processes build agility, empowering organizations to adapt to market shifts in real time. And by automating the mind-numbing tasks no one enjoys, AI frees your teams to focus on strategic, meaningful work — the kind that sparks collaboration and creativity.

In a world where every second counts, why waste months on outdated procurement processes? With AI, you’ll not only save time — you might even find some to spare (or catch up on sleep.)

Step Up to Smarter Software Sourcing with IDC TechMatch

IDC is transforming the way IT teams make software investments with a revolutionary new software sourcing platform. IDC TechMatch, powered by AI and grounded in the world’s most reliable IT market intelligence, will simplify, accelerate, and align your IT sourcing decisions.

With IDC’s new AI-driven software sourcing platform, TechMatch, you’ll simplify decisions, optimize spending, and keep your organization ahead of the curve, gaining a strategic advantage over your competitors.

Ready to discover how IDC TechMatch can transform your pain points into game points?

It’s “time” to learn more today.

AI is driving one of the most significant shifts in enterprise technology—but as you’ve seen, just having an AI-powered product won’t guarantee success. Midmarket tech vendors must do more than position AI as an innovative feature; they must prove its real business impact to skeptical tech buyers who don’t know as much about your product. They just know about the world they are entrenched in—which is often very different from yours.

AI Adoption Is Surging—But Buyers Need More Than Hype

AI-related spending is set to reach $371.6 billion by 2027 as businesses shift from experimentation to targeted AI investments.

But tech buyers are demanding more clarity, proof, and measurable business value. They aren’t just looking for AI—they’re looking for vendors who can:

Translate AI capabilities into real-world business outcomes
Provide data-backed proof of AI’s ROI and competitive advantage
Guide them through the AI adoption curve with expertise

For midmarket vendors, the challenge isn’t just selling AI—it’s marketing AI effectively in a way that resonates with buyers.

Your AI Story Needs More Than Features—It Needs Proof

Tech buyers are overwhelmed with AI messaging. What they need is a clear, compelling reason to choose your AI-powered solution over the competition.

AI Features Alone Won’t Differentiate You – The market is crowded with vendors claiming AI superiority. To stand out, you must showcase how AI solves specific business challenges and improves key metrics.
Buyers Want Data-Backed Confidence – 69% of B2B buyers are more likely to engage with marketing content if it’s backed by credible, personalized data. Vendors who provide benchmarks, case studies, and independent validation will gain trust faster.
The AI Buying Journey is Complex – AI isn’t a plug-and-play solution. Buyers need education, implementation guidance, and risk mitigation strategies. The best marketers will position their companies as strategic advisors, not just vendors.

How Midmarket Vendors Can Win in AI Marketing

Lead with Business Value, Not Just Technology

Show how your AI solution reduces costs, improves efficiency, or drives revenue—not just how it works.
Speak in the language of business decision-makers, not just technical buyers.

Back Claims with Data and Real-World Examples

AI skepticism is high—buyers want quantifiable proof of success.
Use case studies, benchmarks, and IDC-backed insights to validate your claims.

Target the Right Buyers with Tailored Messaging

AI adoption varies by industry and business size—a one-size-fits-all approach won’t work.
Identify your ideal AI buyers and tailor messaging to their specific challenges and priorities.
Assess infrastructure readiness—do they have the foundation to support your AI solution?
Highlight key differentiators that make adoption easier, such as AI model training, data labeling, and ongoing support.

Help Buyers Navigate the AI Learning Curve

Offer clear guidance on implementation, integration, and ROI measurement.
Position your company as an expert resource, not just a seller.

AI is Reshaping Tech Buying—Are You Ready?

By 2026, 65% of individuals will rely on GenAI-powered search and engagement. Vendors that adapt now—by refining their messaging, proving AI’s business impact, and guiding buyers through adoption—will win market share.

Move Beyond AI Hype—Lead with Clarity and Proof

The AI market is evolving fast, and midmarket vendors who can position AI as a must-have business enabler—backed by real-world proof—will dominate.

AI alone won’t drive revenue. But the right AI marketing strategy will.

Buyers Don’t Just Need Opinions—To Drive Results, You Need to Offer Them Data-Backed Guidance.

The European Union’s Ecodesign for Sustainable Products Regulation (ESPR) will come into force on June 20, 2025. It will introduce a new framework to make electronic devices more sustainable. This law goes beyond energy efficiency by mandating durability, repairability, recyclability, and extended software support for smartphones and tablets. The ESPR is within the EU’s broader aim to create a circular economy that reduces electronic waste while making sure consumers get access to devices that last longer and can be repaired.

This regulation presents both operational challenges and strategic opportunities for smartphone manufacturers. Complying with it will require significant changes in how they design their products, manage the supply chain, and handle after-sales customer service. While initial costs may rise due to higher material standards and new repairability requirements, manufacturers that quickly adapt could boost their market position.

The Impact on Smartphone Manufacturers

One of the key pillars of the ESPR is durability. Devices will need to meet stricter requirements for resistance to drops, dust, and water ingress. This will likely push manufacturers to redesign their products, particularly when it comes to protecting from water ingression, the second-largest cause of damaged smartphones (Read more about the Impact of Liquid Damages in my article).

While this may initially increase production costs, it can also lead to fewer warranty claims, lower returns, and a stronger reputation for reliability. Brands that embrace this shift early may gain a competitive edge by positioning their products as premium, long-lasting investments.

Battery performance is another focal point of the regulation. To comply, smartphones must maintain at least 80% of their initial capacity after 800 charge cycles. This pushes manufacturers to invest in higher-quality battery technology, potentially leading to innovations such as more energy-dense cells or modular battery designs. Additionally, the push for removable or easily replaceable batteries could reshape product engineering, affecting device thickness and aesthetics. While these changes may add complexity to design processes, they also provide an opportunity to differentiate in a market where battery life remains a critical consumer concern.

Repairability will become a defining feature of future devices. Under the new rules, smartphone manufacturers must ensure that critical spare parts, including batteries, screens, cameras, charging ports, and buttons, remain available for at least seven years after a product is discontinued. Additionally, these parts must be delivered within a maximum of 10 working days, ensuring timely repairs and reducing consumer reliance on device replacements. The legislation also imposes new disassembly requirements, making it easier for professional repairers and, in some cases, consumers to replace damaged parts using basic tools. This prevents manufacturers from using proprietary designs or software locks that restrict third-party repairs—a common industry practice that has previously driven up repair costs and discouraged device longevity.

From a business perspective, these regulations introduce new revenue opportunities in the form of refurbished and certified pre-owned devices. As consumers gain access to affordable repairs and extended product lifecycles, demand for manufacturer-backed refurbishment programs and trade-in services is likely to grow. IDC forecasts that trade-in used smartphone sales will grow on average 6.7% between 2023 and 2028 to reach $94 billion by 2028.

Although PCs are not yet part of this legislation, last year at the Mobile World Congress, I witnessed brands moving beyond the traditional approach of simply incorporating recycled materials and reducing carbon footprints to a more strategic approach of repairability by design (Read more here).

Software upgrades are another crucial area. The ESPR mandates that operating system updates must be available for at least five years after a device is discontinued. This prevents premature obsolescence, addressing one of the most common reasons for smartphone replacements. However, it also presents challenges for manufacturers, particularly those dependent on frequent hardware-software upgrade cycles to drive sales. Companies will need to balance regulatory compliance with revenue strategies. While most brands already provide five-year upgrades on their flagship and premium devices, extending this to mid-range handsets will be particularly challenging for many smaller brands. The six-figure cost reported by some brands will make it impossible to continue offering mid to low-end devices long-term. This will compel them to reduce the number of devices in their portfolios and weaken their position against more prominent brands.

Strategic Implications for the Industry

The ESPR represents a fundamental shift in how the smartphone industry must approach product lifecycle management. Companies that fail to adapt will risk fines, supply chain disruptions, and reputational damage. However, those who proactively integrate sustainability into their core strategies can benefit in several ways.

Early adopters of the regulation can establish themselves as leaders in sustainability, gaining an advantage in a market increasingly influenced by environmental consciousness. With consumers becoming more selective about the sustainability credentials of their purchases, companies that highlight durability, repairability, and eco-friendly design can create strong differentiation.

Furthermore, regulatory alignment is crucial for market access. The EU remains one of the world’s largest and most lucrative consumer electronics markets. Brands that do not meet these new requirements could face import restrictions, compliance-related delays, or reputational setbacks, ultimately losing market share to more forward-thinking competitors.

Supply chain optimization will also become a priority. The emphasis on repairability and spare parts availability encourages a shift from a linear economy model (produce, sell, discard) to a circular economy model, where devices are repaired, reused, and resold. This could lead to new revenue streams in refurbished devices, leasing models, and extended warranty programs. It also means manufacturers must rethink their supplier relationships, ensuring consistent access to high-quality components over a longer period.

The Consumer and Sustainability Perspective

For consumers, the ESPR brings several significant benefits. By ensuring smartphones last longer and can be easily repaired, the regulation reduces the financial burden of frequent device replacements. This is particularly relevant in an era of rising electronic prices, where consumers are looking for greater value from their purchases.

Beyond cost savings, the regulation addresses the growing e-waste crisis. The smartphone industry generates millions of discarded devices each year, with only a fraction being properly recycled. By mandating longer-lasting products, the ESPR directly contributes to waste reduction, minimizing the environmental footprint of smartphone production and disposal. This shift aligns with growing consumer demand for ethical and sustainable technology choices.

Transparency is another key aspect. The introduction of standardized energy labels and repairability scores will allow consumers to make more informed decisions. By having clear, accessible information on battery longevity, durability, and repair costs, buyers can prioritize products that align with their sustainability values and long-term needs.

Conclusion: A Pivotal Moment for the Smartphone Industry

The EU Ecodesign for Sustainable Products Regulation is not just a regulatory challenge—it is a defining moment for the smartphone industry. While compliance will require significant adjustments, the regulation also opens doors for manufacturers to rethink their approach to design, customer engagement, and business sustainability. Manufacturers should view this legislation as an opportunity to innovate and create new business models. This could include offering extended warranties, repair subscriptions, or trade-in programs that incentivize responsible disposal and recycling.

Companies that embrace these changes can build stronger, longer-lasting relationships with their customers while reinforcing their commitment to environmental responsibility. As sustainability continues to shape consumer preferences and regulatory landscapes worldwide, proactive adaptation to the ESPR can serve as a blueprint for future-proofing business models and maintaining a competitive edge in an evolving market.