Please Call Again: The Second Life of Cell Phones - Global Trade Magazine
  September 28th, 2012 | Written by

Please Call Again: The Second Life of Cell Phones

Taken together, Samsung, Nokia, Apple and other cell phone manufacturers will soon produce about a billion new devices per year—and most of those will end up in the trash within two years.

“A billion anything is an ecological disaster waiting to happen,” says Joe Mckeown, VP of marketing and communications at ReCellular, a Michigan-based company that earns “in the high double-digit millions” giving millions of cell phones a second life—and keeping them out of landfills.

Here’s how ReCellular makes reverse logistics work.

1

FedEx delivers about 25,000 phones per day to ReCellular’s 60,000-square-foot facility in Dexter, Michigan, 12 miles from the company’s Ann Arbor headquarters. “We get almost every phone ever made, every day,” says Mckeown—even such museum pieces as 1980s-era brick phones the size and shape of, well, a brick.

2

The phones arrive from several sources: Major carriers (such as Verizon, Sprint and AT&T) and non-carrier retailers that offer in-store disposal of used devices; consumers who send phones through ReCellular’s online system; and what ReCellular calls its “enterprise collection channel”—big companies turning in used phones they provided their employees.

3

There’s a fourth channel: such charities as Susan B. Komen, Petco, and Cell Phones for Soldiers, a Massachusetts-based organization that collects and sells used phones to ReCellular. Founded by twin teens Brittany and Robbie Bergquist, Cell Phones for Soldiers uses revenue it earns from ReCellular to buy prepaid phone cards for U.S. military serving abroad.

4

The used phones move from the loading dock to a sorting floor. Like a high-tech catch-and-release program in the wilderness, ReCellular tracks each incoming phone by its unique electronic serial number (ESN). With the ESN, ReCellular can determine whether phones have been reported lost or stolen. The ESN also allows Mckeown to say that, despite the immensity of the global marketplace, ReCelluar sees some phones more than once. “We’ve seen the same phones show up three times in our factory,” he says.

5

Phones, “particularly smart phones, have lots of embedded value,” says Mckeown. An obscure U.S. Geological Survey document confirms that fact: “The amount of metals potentially recoverable would make a significant addition to total metals recovered from recycling in the United States and would supplement virgin metals derived from mining.” So, like Native Americans and their buffalo, ReCellular partners with U.S. recycling firms to mine virtually everything in a used phone—spare parts or even such elements as gold, silver and platinum from circuit boards; copper wiring from phone chargers; nickel, iron, cadmium and lead from battery packs; plastic from phone cases and accessories. Everything else—and there’s nearly nothing left—goes into one small dumpster out back, says Mckeown. That dumpster is usually filled with employee lunch leftovers and gets dumped just once a month. Says Mckeown: “We’re a zero-landfill company.”

6

Most of the phones ReCellular processes are fully functional; their owners simply traded up. Among those that require repair, Mckeown says, “the things that break on a cell phone are relatively straightforward—the screen, headphone jack or charging jack.” Some phones can be fixed in the Dexter facility; others requiring more work are packaged in bulk and shipped via air to facilities in Mexico, Indonesia or Hong Kong.

 7

If any of the phones shipped offshore turn out to be beyond repair, they’re returned via ocean carrier through the ports of Long Beach or Ft. Lauderdale for recycling in the U.S. “We never recycle offshore,” says Mckeown, emphasizing the company’s determination to make sure toxic components don’t end up outside the reclamation process. “It’s a closed-loop system, and it allows us to track at the ESN level every unit inside or outside the country.”

8

At the end of all that collecting, sorting, tracking, shipping and reshipping, there’s money to be made. “The repurposed mobile device can have a second and even third life,” Mckeown says. “It’s better than building a new one.” And certainly less expensive: The retail price of an iPhone without a carrier subsidy is up to $699. A repurposed iPhone is about $299. You’ll likely end up with a repurposed model if your phone is replaced under warranty. Ditto if you buy a prepaid phone.

9

Most of the company’s refurbished phones are shipped directly out of ReCellular’s offshore repair plants to retail and wholesale sellers in one of 40 markets worldwide. The company’s sweet spot: emerging markets. “Almost 90 percent of the globe’s population lives in cell phone coverage so the issue now isn’t so much building out networks so that people can have access, it’s that so many of the world’s people can’t afford new phones—can’t afford 30 or 50 or 100 dollars on a new phone,” says Mckeown. “A refurbished or used phone is a great opportunity for them to get access to the technology they want.”

 

To donate your used phones, go to CellPhonesForSoldiers.com or ReCellular.com.

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