Growing Popularity in Refurbished Cell Phones

Several months ago, 2nd Green Revolution ran a piece on “urban mining” in Japan, which described the country’s efforts to recycle metals found in many discarded electronics. I was reminded of it recently while reading a story on companies selling refurbished phones in the Wall Street Journal (“Entrepreneurs Find Gold in Used Phones”). While the impetus to recycle electronics in Japan was produced by procurement issues of raw materials, the WSJ article is interesting because it highlights the market response to the growing popularity of secondhand devices. 

One of the companies profiting from this development is ReCellular. Among the largest cell phone refurbishing businesses in the U.S., ReCellular generated $66 million in revenue in 2010, which it expects will increase by 50 percent by the end of this year. While growth in this area is traditionally attributed to the overwhelming supply of electronics – last year, Gartner estimates that global phone sales increased 31.8 percent to 1.6 billion units – recent growth has been spurred by thrifty shoppers and high-end smart phones. ReCellular and its rivals are also increasing sales by buying phones from individuals on websites like Usell.com. Other options include Best Buy, Gazelle, and Pace Butler. Niche companies like ecoATM, an automated phone dispensary, even offer customers quick cash for used devices.

In just a few years, ReCellular’s CEO says refurbished phones may account for 20 percent of total U.S. phone sales (current estimates are 5 percent or less). Although far from a perfect solution, it is always refreshing to see a segment of the marketplace benefit by selling and recycling used products, especially electronics.