Study: High-Tech Theft Costs Billions

The theft of high-technology products, such as semiconductors, cellular phones, computers and hard-disk drives, could cost U.S. manufacturers and their customers more than $5 billion annually, according to a just-released study. The study was done over a two-year period by Rand, a nonprofit institution in Santa Monica, on behalf of the American Electronics Assn. and International Electronics Security Group. According to Rand, direct losses resulting from theft from high-tech manufacturers and distributors amount to about $250 million a year, or a little more than 0.1% of total industry revenue. But indirect costs, such as lost business and added security and insurance needs, raise the total to more than $1 billion annually. And the theft of high-tech products from the manufacturers’ customers could cost an additional $4 billion, as companies react to theft by reducing how much they are willing to pay for products, the study said.