Apple May Join Growing, Lucrative Smartphone Recycling Market

 
 
By Michelle Maisto  |  Posted 2013-06-17
 
 
 

Apple May Join Growing, Lucrative Smartphone Recycling Market


EleGreen, a relative newcomer to the growing smartphone recycling movement, has a focus on the upgrades of government agencies and large corporations, whether from old BlackBerry smartphones to iPhones, new BlackBerrys or Android-running devices.

EleGreen buys phones to resell them to other markets—making sure, first, that they're cleared of data, it says—or else makes sure they're recycled responsibly. It recently bought 3,000 phones from a major corporation that was refreshing its device lineup.

"Most people don't realize how much they can get for their old phone because they only look to their service provider, or the manufacturer," Spencer House, vice president of marketing and operations, said in a June 14 statement. "Our primary objective is to educate the consumer, make buy-back easy and pay top dollars for the hardware."

For a device like the iPhone 4S, eleGreen currently offers a buy-back price of $295. Given that many people pay a hardware rate of $199 to upgrade, eleGreen points out that its price would put a person ahead by nearly $100.

According to eleGreen, 400,000 cell phones are retired every day in the United States.

And according to Nokia, a veteran of the recycling scene and the creator, it says, of the "world's largest recycling network," only 9 percent of people recycle their old phones.

Ken Hyers, an analyst with Strategy Analytics, says that data security fears are the leading reason that so few phones get recycled.

"The other big reason many consumers hang onto their disused phone," he said, "is because they recognize that the devices have an intrinsic value, but they don't really have any obvious way to know what the dollar value of their old phone is, and they don't have an easy way to sell their old phones."

Offering cash incentives, companies like eleGreen are working to educate companies about their options.

Gazelle, which buys old iPods, tablets and Apple computers, in addition to a range of smartphones, says it has paid out nearly $100 million in exchange for more than 1 million devices.

Newaya, another newcomer, specifically offers "professional mobile phone data wiping for businesses," though its quotes arrive within a few hours via email from a human, versus the instantly generated offers on many of the other sites.

Apple May Join Growing, Lucrative Smartphone Recycling Market


In fact, with so many companies now offering to buy used phones, one site, SellCell.com, aggregates their offers—a Priceline for selling used devices.

The highest price it found for a 32GB iPhone 4S was $296, from OrganicOffer, though there were five other sites offering at least $250 for the phone. SellCell points out things like the payment methods offered and whether the company includes free shipping and free packaging (they almost always do).

These companies are challenging the established players on the scene.

Sprint, through its Buyback program, has for years been encouraging customers to turn in their old phones, instead of relegating them to junk drawers and filing cabinets (its current offer for the 32GB iPhone 4S is $167). It's also happy to recycle the phones, batteries, data cards and accessories of non-customers.

Sprint reuses nine out of 10 phones it collects through its recycling programs. Since it began in 2001, it has collected nearly 50.5 million phones.

It says its refurbished phones help to meet customer demand for a "like-new phone at a lower-than-new price."

Nokia, for its part, has more aggressively emphasized the environment benefits of recycling and reusing, alongside the business benefits.

According to Nokia, a cell phone contains almost every element in the periodic table, and we've been drawing these elements from the Earth to a degree that what's left isn't of the same quality as what we've already taken out. The ores from recycled phones are "300 times richer" than those we extract today, says Nokia.

Its recycling program works to recover "100 percent of the materials" in old phones, turning them into everything from new phones to park benches.

"If everyone recycled just one [phone]," adds Nokia, "we could prevent over 370,000 tons of raw materials being taken from the earth."

Apple Rumored to Be Planning Buyback Program

The highest buyback price for a used iPhone might soon come from Apple.

According to a June 7 report from Bloomberg, Apple is planning to team with Brightstar, a distributor that handles trade-ins for AT&T and T-Mobile, to offer a recycling program.

Apple's goal, said the report, is to get iPhone 4 and 4S users to upgrade to the iPhone 5—with a buyback price of $200 or so, a customer can make the switch at no upfront cost in some cases—and then to resell the refurbished iPhones to customers in emerging markets.

With competitor Samsung's market share continuing to rise, an Apple buyback program could help to grow Apple's footprint.

It could also help to increase corporate recycling. And certainly consumer recycling.

The rumored Apple-Brightstar program would solve the issues currently preventing recycling, says Hyers, by providing phone owners with "an assured way to wipe the data from the phones while at the same time making it easy to trade the phone in towards a new model."

Neil Mawston, executive director of Strategy Analytics' Global Wireless Practice, says limited recycling awareness, low motivation, and concerns about privacy or corporate security have kept recycling figures low, and that Apple's participation could change that.

"Apple's U.S. retail stores have huge footfall of visitors, so any attempt to promote more recycling through Apple's stores will help to raise awareness of this important activity," said Mawston.

"Apple is not the first company to promote recycling of old smartphones, but Apple could be among the first to truly popularize it."

Mawston added, "We expect the recycling rate for all smartphones worldwide to increase during 2014."

Follow Michelle Maisto on Twitter.

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