Smartphones have become the driving force behind today’s digital economy, as the functionality of the phone has exceeded many expectations. Many services that were previously offered by means of physical products are now available directly in the form of apps on the smartphone. Smartphones are having a huge impact not only on the intangible app industries, but also on the tangible manufacturing industries. Given that smartphones are one of the most important devices in our lives today, one of the most urgent tasks might be to properly understand the impact of smartphones on our economy. This project aims to measure the value of both smartphone apps and the quality improvement of the smartphone device, based on the concept of consumer surplus. The scope of this research includes the measurement of (i) how much the smartphone is expanding our digital lives through various apps, (ii) how much the smartphone is replacing other digital devices, (iii) how much the quality improvement of the smartphone device has benefited our citizens over time, and (iv) how the quality-adjusted price of smartphones has changed over time.
