Plunging metals prices are putting “e-waste” recyclers in a bind.
These companies, which collect outdated and broken electronic devices and shred them to extract the metals inside, have seen incomes plummet along with the value of copper, iron ore and other raw materials.
One of the largest e-waste recyclers, Electronic Recyclers International Inc., is partnering with iFixit, a company best known for exposing the innards of new iPhones to Apple Inc. fans, to tap a more lucrative market: repair shops and gearheads who will pay top dollar for spare parts.
IFixit already sells salvaged electronic components on its website. The company aims to turn a niche market into big business by partnering with ERI, which each month converts some 25 million pounds of electronics into scrap. Earlier this year, engineers from iFixit began assisting ERI with stripping devices of valuable parts at a facility in Fresno, Calif. The companies expanded the number of devices they strip down in June, and plan to operate in all of ERI’s facilities next year.
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“When commodity prices are strong, it can make more sense to break a devices down into its raw components and recycle it,” said Brendan Egan, head of online marketing for ERI. When they’re weak, “it can make more sense to … give those parts a second life.”
An iPhone 5s contains copper worth about 15 cents, down from roughly 21 cents when the smartphone was released in 2013. Prices for iron ore, another common metal found in smartphones, are down over 60% in the last two years, while the trace amounts of gold found in phones have declined in value by around 20%. By contrast, a smartphone motherboard and display could be sold for $50 each, said iFixit CEO Kyle Wiens.
To be sure, the appetite for repairing old devices may be limited. About 1.5 billion smartphones are expected to be sold this year, according to research firm IDC. But customers routinely replace their phones rather than repair them, and vendors are constantly releasing new models and cutting prices for entry level devices. A Gartner Inc. survey of smartphone users worldwide found that only 19% of devices wind up with recyclers like ERI.
Even so, parts are often in short supply because manufacturers of mobile devices aren’t inclined to encourage repairs, which would potentially hurt sales of new devices, said Rob Schafer, an analyst at Gartner.
“It doesn’t surprise me that [recyclers like ERI] want to climb up that food chain to get to the components side,” Mr. Schafer said.
In early tests, customers snapped up stands for the Microsoft Surface tablet, which can be difficult to find from third party sellers, Mr. Wiens said. He added that motherboards for Samsung smartphones were also popular.
The deal with ERI is “kind of like AutoZone and the junk yard teaming up,” he said.
