Since the release of personal computers, technology has continued to advance at an ever-increasing rate, resulting in more waste as consumer electronics reach end-of-life faster. Consumers often fail to recycle old devices, but businesses in e-waste and recycling are expected to continue to grow — this may impact the currently increasing costs of materials in the industry.

Turnover Rates, Lack of Recycling Lead to Material Shortages

New devices typically average just two years or less from the date they launch until they reach technological obsoletion. As new phone models often debut more than once a year, consumers looking for exciting new products are quick to move on from their current models in exchange for the latest and greatest. For example, close to 16% of the 900 million current iPhone users are expected to trade in their current phone for a newer version this year. (Apple predicts an average device lifespan of about four years.) 

However, consumers in the electronics market seem to be slowing their willingness to participate in device turnover, according to Apple. 

Rather than trading in their old devices in exchange for new models or recycling the phone’s components to make new devices, consumers often simply throw away their devices when purchasing new models. This approach means the device’s materials end up in a landfill, driving manufacturing costs for future phone models even higher. Fewer available resources mean companies have to either buy limited quantities from recyclers or miners or seek their own alternative means of manufacture.

As material scarcity worsens, utility metal markets are likely to increase in price volatility. Aluminum prices are projected to fall in 2019, which is potentially disastrous for e-waste management and electronics recycling businesses. Because these businesses tend to sell aluminum and copper, the most valuable metal materials, when the market is high to get wider margins, the price drop could mean significant cuts in their profits. 

E-Waste Recycling Industry Growing 

Currently, only 20% of consumers currently recycle their e-waste. For every million cell phones recycled, 35,000 lbs. of copper, 770 lbs. of silver, 75 lbs. of gold, and 33 lbs. of palladium are saved for future use. 

According to a study by IBISWorld, the e-waste and electronics recycling industries have grown in terms of employee headcount, overall cash flow, and even number of companies conducting business in the space. Growing competition in these industries may signal preparation for a drop in utility metal costs, driving consumer electronics costs down as well.

E-waste recyclers provide raw materials to businesses once the materials have been refined, allowing businesses to make more products. Consumers buy these products from manufacturers, recycle the device once it has reached its end of life, and then the cycle repeats. Getting ahead of these trends may allow businesses to thrive in the e-waste and electronics recycling industries as the consumer electronics market begins to settle.