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Connected Devices: Designed for Circularity & Growing Acceptance of Refurbished Devices

Due to the increasing number of connected devices emerging on the market, too many old, disused, or discarded electronics are dumped well before the end of their useful life. This is a problem that is getting worse each year. While having optimal recycling schemes for unwanted devices is one solution to this increasing waste mountain, prolonging the life cycle of these devices by encouraging sales of second-hand devices is another alternative and a growing trend.

 

Fortunately, a recent Deloitte report predicts that the growth rate of the used smartphone market will be four to five times higher than the overall smartphone market by the end of 2016. But we are yet to see this offset the growing global e-waste mountain. It will take time to convince consumers who are always wanting to upgrade to the latest smartphone, but do not consider trading in their old one.

Wearables are also adding to the e-waste problem. Most original equipment manufacturers (OEMs) either already have, or plan to have, wearable devices as part of their connected devices portfolios. In fact, industry analysts IDC predict that worldwide shipments of smart watches will reach 126.1 million units by 2019. While demand for VR headset shipments are predicted to create a $2.8 billion hardware market by 2020, up from an estimated $37 million in 2015. This growth is fuelled by gaming on both, mobile and console devices, as well as streaming content, shopping, training and education.

With this influx of devices, manufacturers and retailers not only have a duty of care as good corporate citizens to ensure that electronic products pass back into the manufacturing cycle and components re-enter the supply chain, rather than going to landfill, but also have potentially lucrative additional business opportunities. 

Following the recall of the Samsung Galaxy Note 7, the company found itself in the line of fire of consumers and the likes of Greenpeace to indicate its strategy as to whether it would repair, refurbish or resell the devices. This is because the phones contain components that comprise rare and precious material like gold, cobalt, and tungsten that it is essential to recover, either for re-use or to recycle as well as the toxic aspect of batteries. In fact, according to the Institute of Electrical and Electronics Engineers, approximately 165 pounds of raw mined materials go into the manufacture of the average mobile phone. It is paramount that everything is done to re-use as many components as possible.

Additional revenue streams

Offering trade-in or buyback programmes when selling new devices, not only saves the consumers money but also earns companies’ useful additional revenue streams with the added benefit of promoting brand loyalty in the longer term.

Business models such as sharing, renting, leasing, re-selling, or hardware-as-a-service can also extend use/re-use of equipment or their components as a first port of call. This will mean plenty more used equipment will stay in the market and manufacturers will only benefit.

Adding  an extra level of trust for the customer

Brand reputation is key, and consumers choosing products will associate quality with this. Those with a strong status should be looking to mitigate any concerns of used items by promoting that the product has been properly tested and verified. In doing so, major electronics companies can strengthen consumers’ trust in them and prolong the lifecycle of products through the introduction of second or even third-life equipment.

For example, it is not acceptable that electronic devices have been sold on online auction sites with both corporate and personal data remaining on them. Processes must be put in place so that used smart devices or hard drives entering the second-hand market go through proper data deletion processes compliant to recognised industry standards such as HMG Infosec (UK) and NIST 800-88 (US National Institute of Standards and Technology). There is an obligation to comply with data protection laws and reputable brands will certainly take appropriate measures to ensure this happens.

Offering enhanced or out of warranty programmes also provides an additional layer of trust. Many wearables are being distributed by mobile operators, as an accessory to smartphones, and many of these devices are covered by both the manufacturer’s warranty, as well as extended warranty policies provided by retailers themselves or through insurance companies.

However, making it clear to consumers is essential. This lack of consumer knowledge was made apparent in a survey we ran last year where 98% of UK adults were found to be unaware of their basic consumer rights to return, refund or exchange faulty goods. Otherwise, consumers may be left with an unusable device and a large bill to fix it, giving them a negative perception of the brand and increasing the likelihood that they may move to a purchase a competitor product and not look back.

Bolstering corporate social responsibility & circular economy

Offering robust warranty and returns policies can also contribute towards Corporate Social Responsibility (CSR) objectives, better control over commodity price fluctuations, and additional revenue streams.

When you consider the fact that leading brands are finding themselves under more scrutiny than ever before, from investors and customers alike, it is now more important that sustainability and CSR practices are high on the agenda at the very top of an organisation. Working with an electronics repair specialist will mean parts can be recovered and harvested for an OEM’s full product portfolio ensuring that standards are met and the highest level of service delivered.

Product lifecycle and their associated value chains should be critical considerations for all manufacturers and there are multiples ways in which businesses can benefit. The industry needs to come together to educate consumers and businesses as to what to do with their unwanted products and build effective reuse and recycling strategies. Especially as consumer demand for second-hand electronic devices shows no sign of abating. This should be optimised upon as it will ultimately save companies money from the bottom line as they effectively get to make margins multiple times on the products they re-sell and enable millions of perfectly good products and components to be reutilized.

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