Each household in France owns an average of a hundred pieces of electrical and electronic equipment. And this number will keep growing with home assistants, wireless headphones, virtual reality headsets and smart watches.

Unfortunately, the more equipment we own, the more we trash. Waste electrical and electronic equipment is currently considered to be one of the fastest growing waste streams in the European union, growing at 3-5 % per year.

To recover high value materials from waste, the electronic and electrical equipment industry has massively invested in collection and recycling infrastructures. But today, results are disappointing: in Europe only 35 % of discarded e-waste is properly collected by formal recycling systems while the valuable rare elements are almost entirely lost during recycling.

The end-of-pipe approach, recycling end-of-usage products, cannot be the only solution. The industry needs to review the way electrical and electronic products are designed, manufactured, used, and collected to keep them out of the waste stream.

Improve repairability

Image: Sergey Peterman / stock.adobe.com

If buying a new appliance can be a customer friendly experience, having it repaired is a whole different story. Customers face many hurdles and frustrations: where to find an experienced and available technician; will spare parts still be available from the vendor; will the cost of repair exceed the cost of a new product?

Spare parts needed for repair can be harvested from used products to improve their availability and reduce their cost. For example, 75% of the spare parts used by Google to repair its data centre servers are used ones. According to a recent French study, building an inventory of spare parts harvested from used devices would be economically profitable. Part harvesting could also be made easier with new product design. For example, dissolvable circuit boards could help recover spare parts from IT equipment.

Repair may look like a  small business opportunity, but it is not: the mobile phone repair business alone generates about $ 4 billion in annual revenue.

Industrialise the refurbishing process

It makes no environmental sense to recycle an electronic appliance that can be reused. For instance, keeping a smartphone in use for an additional year cuts its CO2 impact by 31 %.  But it makes no economic sense either: a reused iPhone retains around 48% of its original value, whereas its value as recyclate is just 0.24%. Various players, from start-ups to large manufacturers, are collecting, refurbishing, and reselling used equipment to capture this remaining value. Refurbished products usually undergo a rigorous process that includes testing, replacing defective modules or parts, cleaning, and repackaging. For example, Dyson, HP, Dell and Lenovo sell refurbished equipment on dedicated outlet web sites. IBM Global Asset Recovery Services has been refurbishing used IT equipment for 30 years. Envie in France or Norsk Ombruk in Norway restore large domestic appliances.

But what has long been seen as a niche market is today becoming an opportunity of its own. The market for used smartphones, for instance, is expected to grow from 81 to 223 million units between 2015 and 2020, representing a staggering compound annual growth rate of 22%. To capture a share of this market, some players are investing in industrial facilities to refurbish high volumes of used products. GameStop has invested in a 17,000 m2 site to refurbish game consoles. Apple is working on an automated disassembly system with the ability to disassemble 1.2 million iPhone units per year. Anovo has operations in 11 countries to refurbish various devices from touch screen tablet devices to triple play set top boxes.

Unfortunately, reuse has its limits. With their existing designs, appliances, even refurbished, cannot always match the performance of new ones. For example, with the recent efficiency improvements of heat pump systems, buying a new refrigerator can be preferable to reusing an old one.

Sell appliance as a service

One of the most promising models that will keep equipment out of the waste steam is to sell  the service that appliances provide, rather than the product. Professional customers already have access to such services: offices can buy copies per page from Xerox, light per lux from Philips, compute capacity by the hour from Amazon. Professional laundries can pay per use for their Electrolux washing machines. But only a few start-ups are providing such services to end consumers. For example, in the Netherlands, Bundles offers pay-per-wash services to customers and charges customers a monthly subscription fee on a per-wash basis. As part of the service, Bundles takes care of the washing machine installation and maintenance, and retains ownership of the appliances. Homie is developing a similar service.

Selling appliances as a service is a major business model switch for manufacturers, distributors, and users, and this model can be enhanced further with the support of new technologies. With the Internet of Things, washing machine manufacturers will have access to the operational data (temperature, water pressure, vibration…) of equipment. By analysing the data using machine learning technologies, they will determine under which conditions a part is going to break before it actually happens. They will be able to take preventative actions by ordering the right replacement part and scheduling the visit of a field service technician. By owning and managing their own products, vendors will significantly reduce the total cost of ownership of their equipment. This reduction will benefit both the company and their customers. Selling appliances as a service would also drastically improve customer experience, avoiding the hurdles of installation, maintenance and disposal, especially for larger ones such as fridges or washing machines.

Design for repair, reuse of refurbishing

However, today, manufacturers have little economic or legal incentive to manufacture products designed for repair, reuse or refurbishing. Why would they spend additional money designing modular components, manufacturing repairable products or buying durable parts if they cannot capture back part of this value? But incentives will change when vendors choose to refurbish their own devices or sell their appliances as a service. And it is already happening today. For customers looking for long lasting products, Miele build many updatable appliances, making it possible to re-programme electronic units or upgrade products to include the latest technological advances. When Apple started its iPhone subscription programme, it is said to have designed stronger and more resilient iPhones by including a harder aluminium case, a stronger cover glass, as well as additional gaskets and seals that improve water resistance.

Project Ara, from Google’s ATAP division – gone, but not forgotten? Image: Maurizio Pesce, (Project Ara Spiral 2 Prototype) [CC BY 2.0], via Wikimedia Commons
Some modular appliances reach the market, such as the Fairphone or the A5 LED phone from Alcatel. Andy Rubin, who created the Android software, also recently launched the Essentials, a new ‘future-proof’ phone with modular components. Most modular phones are built around a main computer board where components, such as a battery or a camera lens, can be easily added like Lego pieces. By allowing users to replace components, modular phones are much easier to repair and upgrade. Unfortunately, these phones have not yet met the expected success. Google stopped its Ara project and LG ended the sale of its modular G5 phone. Customers seem to favour an integrated, all-in-one phone to one with a bunch of components that might require more effort to manage. But modular phones present many opportunities for experimentation. Phone components could be used in other devices or to convert a phone into a new device. For instance, the Moto Z modular phone from Lenovo can be converted into an Amazon’s Alexa home assistant, just by adding an additional module.

Frictionless collection

Image: IDEO

Online retailers allow customers to order appliances in a few minutes and receive them within hours. But it is a different story when it comes to end-of-life collection: having a used device collected is not as easy as buying new one. To remedy this, some vendors and distributors are working on frictionless collection schemes. The Italian online retailer ePRICE is considering using a network of 280 lockers to deliver new appliances and collect used ones. US retailers have installed ecoATM kiosks that automatically exchange small used devices, such as smartphones or tablets, against cash. The start-up Volpy has designed an app that, once installed on a smartphone, assesses its technical conditions, estimates and proposes a buyback price, and sends a courier to collect the device within one hour. In the Netherlands, used electronic equipment is collected by the postal service PostNL when delivering mail and packages. Design consultancy IDEO has come up with a proposal service, Use Me/Lose Me, that, with the owner’s approval, monitors appliances via web-connected chips. If anything goes unused for too long, the product’s details are uploaded onto an auction site and the sale, payment, and shipping process is managed accordingly.

Electronic and electric equipment manufacturers are amongst the world’s most innovative companies. They are working hard to make everyday life easier. But so far they’ve taken little advantage of their unique capacity to adopt circular design approaches and invent more effective production and use models, or reduce the use of high value materials. And that needs to change.

 

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The Author

Rémy le Moigne

Rémy le Moigne

Rémy Le Moigne is a consultant and the author of an award winning book on the circular economy. He works with private companies and territories to accelerate their transition towards a circular economy. Previously Rémy has been a partner of Deloitte supply chain strategy practice where he led projects in Europe, West and Southern Africa.

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