February 2011

Electronics Recycling Enhancements

New Shift in Electronics Recycling

By: Mark V. Bowles, ecoATM

You know those old cell phones sitting in your drawers at home? You are not alone. The average American household has about six of them. Those phones are part of a growing e-waste problem that ecoATM, a rapidly growing San Diego company, is attempting to solve.

ecoATM believes that mixing convenience with incentive is the right formula to induce broad-scale recycling participation. Traditional recycling methods, such as mail-in or cardboard box donation programs, have simply lacked broad-scale consumer participation. Historically, less than 10 percent of cell phones in the U.S. and less than 3 percent worldwide are properly recycled or reused. ecoATM’s solution is an automated recycling kiosk, a self-serve take-back system that pays consumers for recycling their unused cell phones and other consumer electronics. The concept is working as well as expected: the first 10 ecoATM kiosks launched in malls and electronics retailers in 2010 have already paid out hundreds of thousands of dollars to more than 15,000 customers who have resold or recycled tens of thousands of phones.

The kiosks are attractive to consumers because the developers have used machine vision and artificial intelligence with electric diagnostics to create a user-friendly process. The ecoATM kiosk identifies a phone’s model by scanning the phone and comparing the images with a database of more than 4,000 handsets. The machine then presents the correct cable to the consumer and asks the user to plug the phone in and turn it on. The kiosk then tests the phones electronics and simultaneously inspects for a cracked or damaged LCD and/or cosmetic damage. The kiosk offers to erase the phones data and dispenses cash based on the phone’s condition and value for resale.

ecoATM divides its flow of electronics into two streams: those that have a secondary market and those that don’t. Devices that have no value are considered scrap. The kiosk does not pay for them, but it still acts as a recycling collection point. People are encouraged to turn them in as ecoATM ensures that all electronics with no value are properly disposed of. Phones and other electronics are smelted down for their precious metals and plastics that can be reused in future manufacturing.

Devices that have a secondary market are collected and sent to the ecoATM processing lab where they are routed to buyers around the world. The worldwide secondary market for phones is a starved channel with a seemingly insatiable appetite. The channel takes phones almost as quickly as ecoATM kiosks can accept them. The demand is only growing as emerging markets in second- and third-world countries are beginning to see rapid wireless network development and expansion. In fact, the number of worldwide mobile users is growing at a faster rate today than ever before. Used and refurbished phones provide a much cheaper alternative to a new device. For many people in developing economies, a cheaper refurbished device over a new device is the way to go. ecoATM expects the smart phone tsunami to spill over into emerging markets as well. As people begin to retire 2nd, 3rd and even 4th generation smart phones, lagging markets will begin to trade in their traditional mobile devices to upgrade to smart phones. The cycle is continuous with no end in sight.

The potential pool of electronics is considerable in size. Initially ecoATM focused on cell phones due to the increasing popularity of high-value smart phones and brevity of lifecycle (13 months on average). In the U.S. alone, more than 150 million cell phones with an estimated value of about $5 billion are retired annually. This adds to the existing cache of about 1 billion cell phones sitting unused in consumer drawers worth an estimated $7 billion. After initially launching 10 pilot kiosks to take back cell phones, ecoATM has now outfitted the kiosks to take back video games, MP3 players, tablets and e-readers with future plans to expand take-back categories to include laptops computers, PC’s and other consumer electronics.

Environmental Impact
Not only does ecoATM do an excellent job at putting cash in people’s hands from used items, but the kiosks also have a tremendous environmental impact as well. According to the EPA, the manufacture of each cell phone creates three tons of toxic mining waste. The improper disposal of these devices creates another hazard as cell phones contain a number of extremely toxic materials. Harmful materials are embedded inside the circuitry and displays, toxins such as arsenic, lead, and copper, in addition to cadmium, mercury and beryllium (a known carcinogen). If disposed of correctly, cell phones contain many non-toxic materials that can be recycled and used again. ecoATM sends all collected devices with no secondary market straight to EPA-registered materials reclamation facilities where devices are responsibly smelted down for materials and eventual reuse.

A single ecoATM machine has quite an impact. The following chart illustrates the environmental offsets of a single kiosk:

EIR Kiosk Image

What’s Next?
ecoATM is currently expanding its kiosk network and experimenting with new take-back categories. Recent developments have the company riding high on significant momentum as the core kiosk patent was granted in January 2011, and as kiosk retail giant Coinstar made an undisclosed investment in the company. New kiosks continue to provide strong market validation that people will use an automated kiosk to cell their old electronics. ecoATM has received trial requests from almost every big box retailer and grocery chain in the US.

In 2011 ecoATM plans to roll out several hundred kiosks to further expand the market. Further deployments and a mass national rollout are planned for 2012 as ecoATM continues its quest to offer full-service buy-back and recycling centers for consumer electronics – and solve a growing e-waste problem.