January 16, 2008 4:00 AM PST
Refurbishing an old approach to PC recycling
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The company, one of many that specialize in disposing of old electronics, says refurbishing offers the most efficient alternative to dealing with the world's growing mound of e-waste. Energy doesn't get wasted pulling old computers apart and melting down components into raw materials. Additionally, energy and natural resources aren't consumed for a new PC because the old one has effectively usurped demand for it.
Approximately 80 percent of the notebooks that come into the company's facility get refurbished and resold. The rest get picked apart and sold by component, or munched and melted.
"We are selling laptops that are 10 to 12 years old," he said.
PC refurbishment has been around for years, and it typically has not lived up to its promise. The failure largely can be chalked up to Moore's Law, which describes how computers and other devices get steadily cheaper and better over time. Because of these two factors, resale value drops extremely rapidly. Why buy a used computer if the new one costs about as much?
Circumstances, however, are slowly bringing refurbishing back in vogue. The IT asset recovery business now accounts for about $6 billion in revenue a year, according to David Daoud, an analyst at IDC. Most of that comes from selling refurbs.
"If you focus on PCs only, the volumes are growing, but not as big as refurbishers hope, given the significant demand for such products," he said.
E-waste regulations are a significant driver. The European Union and 4 states have created mandatory recycling measures, and 20 others will likely do so in the next two years.
These laws will force companies and individuals to examine recycling processes, and refurbishing will begin to become more attractive. An oft-cited study written by Eric Williams for the United Nations estimates that recycling consumes 20 times more energy than reuse. The original study says it takes 240 kilograms of fossil fuels (PDF) to make a PC, but that number includes a 17-inch CRT. Even if Williams' estimate is high, a carbon tax--which imposes payments on companies for emissions--would likely work to harden a price difference between new and used systems.
And that pile of e-waste isn't getting any smaller. The United States alone gets rid of about 60 million PCs a year. While corporations hire outside companies to take away their old stuff, individuals are often at a loss.
"There are billions of units sitting in closets right now," Ziegler said.
Meanwhile, the electronics market is also beginning to penetrate low-income emerging nations, where large segments of the population can't afford new gear, even with the rate of price declines.
Demand for refurbished gear is also increasing in the States and Europe. Parents want to give kids laptops at earlier and earlier ages. Many families have bought digital TVs and are now putting in second sets in the other rooms.
LG, Westinghouse, and others showed off new bedroom and kitchen PCs at the Consumer Electronics Show in Las Vegas. With a second or third PC, customers become more price-sensitive and less focused on performance: it's going to be used to only surf the Web, after all. eBay, to some degree, has acclimated the public to used electronics.
"Your 3-year-old plasma (TV) may be old to you, but not to my daughter," Ziegler said.
Daoud also believes that we may begin to see a drive among manufacturers to encourage corporate users to help the earth by retiring PCs early, like after three years. That sounds counterintuitive, but it makes sense. A PC that gets retired early has a greater resale value, which means fewer PCs going to the chipper.
"The way they convince them (the PC owners) is by sharing the profits of their sale of the marketable units, hence helping reduce the cost of ownership," Daoud said. "Most of the companies that are engaged in (the) refurb market say they do not have enough systems to fulfill global demand, and so pressure is growing to find ways to convince users to retire early."
Naturally, refurbishers still have to hit low price points, which isn't easy. A tour of TechTurn's site shows a lot of notebooks clustered in the $435-$550 range; individual notebooks are anywhere from nearly zero to $200 less than new counterparts.
The online store, however, shows four desktops (with no monitors) selling for less than $200. The company also continues to sell "tens of thousands" of Pentium III laptops. When in stock, these laptops sell for $200 to $300. In other words, they start at close to the same price of the XO from the One Laptop Per Child organization.
What to burnish and what to send to a chipper depends on the circumstances. "Putting $180 worth of work into a $200 laptop is not a good thing," Ziegler said.
Ironically, one of the stumbling blocks toward greater acceptance of refurbished electronics has been the nature of early e-waste laws. California's recycling law tends to encourage recycling over refurbishing. The European Union directives did the same thing, but recent amendments have made it far easier to refurbish old electronics legally under the e-waste laws. India, China, Brazil, and other countries put tariffs on used electronics (though often not on components to make new equipment locally).
Washington state, however, includes refurbishing as part of its e-waste recycling program.
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