A new organisation to encourage recycling and reuse of mobile devices was announced at Mobile World Congress in Barcelona this week. The Device Renewal Forum (DRF) aims to establish a common certification for refurbished wireless devices which it believes is necessary in order for the market to grow.
The need to increase mobile phone reuse is clear. Less than 1% of the estimated 1.68 billion devices produced annually are currently reused or recycled. The average life of a smartphone in the USA is 1 year. Typically consumers in developed countries will have up to 6 unused old mobile handsets in their homes.
According to the DRF, mobile phones now make up the largest stream of e-waste in the world. This represents a huge under-utilisation of technological resources, as well as an environmentally disastrous waste of the rare metals and manufactured components used in mobile phones. If the experience of the personal computer market is anything to go by, much of this waste will ultimately end up being dumped in emerging markets.
The DRF asserts that, at present, there is no commonly agreed standard of what constitutes a refurbished mobile phone. Some organisations do little more than clean the dirt off the casing while others undertake a complete data wipe, test the device and replace broken components. DRF aims to establish a technology agnostic ‘gold standard’ which will give operators, dealers and customers confidence in recycled devices.
The initiative comes with heavyweight backing from Sprint Nextel, Brightstar, e-Recycling Corps, Moduslink Global Solutions and the CDMA Development Group. It will work across all wireless standards including GSM, CDMA, HSPA and LTE.
The initiative aims to incentivise consumers to hand in their old phone, breaking the pattern where consumers in developed markets now enter a store with one device and leave it with two. According to Sprint Nextel research indicates that offering around US$50 will persuade a majority of US consumers to hand in their old phone.
Much was made during the DRF’s launch of the potential to fulfill the demand for affordable phones in emerging markets by renewing and certifying refurbished wireless devices. David Edmundson, CEO of e-Recycling Corps, stated that 70% of the phones passing through his company go to emerging markets.
However, it is difficult to see the business case in emerging markets. With a US$50 acquisition price - plus the costs of refurbishment, transportation and distribution - it is hard to see how recycled phones can retail for less than US$100-120 in the low ARPU countries in Africa, Asia or Latin America.
With highly desirable top end feature phones (such as Nokia’s newly launched Asha range) retailing at this price bracket, and calls being made by Airtel and others at MWC for a $50 Smartphone, only iPhones and top end Androids are going to find a market at this price level - and not for the long term.
With this in mind it is hard not to see the DRF’s rhetoric as being more about meeting company CSR targets than meeting the demand for affordable phones in emerging markets. The aim of extending the life cycle of mobile devices and recycling to reduce waste is laudable. But the DRF should understand that people in emerging markets don’t want the developed world’s cast-offs.