Cell phones keep getting smaller and smaller while boasting more and more features. Most of those phones, PDAs, and smartphones, however, are eventually tossed out, and the results are disturbing. In the US, consumers purchase about 140 million new cell phones a year, replacing them on average about every 18 months. Americans are actually global leaders in cell phone recycling at 10%, compared to the global rate of 1%. That still means 90% of unwanted phones, however, are sent to the landfill, where they leech toxins while wasting precious rare metals that are becoming more difficult to find. But what some dismiss as trash can be lucrative treasure to others, so keep your eye on two CEOs who are launching a new cell phone recycling venture.
Ron LeMay, formerly of Sprint, and David Edmonson, a past CEO of Radio Shack, unveiled eRecyclingCorps at the CTIA Wireless Conference in Las Vegas last week. Based in Dallas, the new firm will work with cellular phone dealers in creating incentive programs to encourage customers to trade in their old phone when purchasing a new one. Working with wireless service providers, eRecyclingCorps will either recycle the phones or resell them in emerging markets.
The heart of eRecyclingCorps’ service is a web-based platform that will prompt customers to discard their phones at the store at which they are purchasing a new device. At a store’s point of sale system (i.e., “cash register”), customers will immediately know the salvage value of their old handset, which could run anywhere from $5 to $300. Stores will give customers the choice of having that credit applied towards a new phone, accessories, or wireless fees. In turn, eRecyclingCorps will pay the stores for the phones, and then upon delivery, will decide what to refurbish and what to recycle.
eRecyclingCorps’ advantage is that its business model makes it easy for consumers to ditch, not just pitch, their old phones. Currently phone recycling programs involve going to a specific e-waste drop off point, or mailing the phones through a service such as the US Postal Service’s pilot program. The best time to snag that unwanted phone is during the transaction to purchase a new one–instead of employing wishful thinking that consumers will drive out of their way to a far-off recycling center–or remember to insert that phone into an envelope, even if the postage is prepaid.
Sprint says it wants 90% of its cell phones recycled or re-purposed by 2017. Match that to eRecyclingCorps’ expectation to make a 35% profit margin, and the math is easy.