Bloomberg Businessweek (North America)
Tough standards, and minimal waste, at Apple’s iphone reincarnation sites
▶ Recycling Apple’s devices requires a global network with on-site monitors ▶ “Anything that’s made out of aluminum could have been an iphone”
The companies that put together iphones have to agree to abide by Apple’s strict factory standards and to maintain a certain level of secrecy. So do the companies that destroy them.
In an unmarked building at an industrial park in Hong Kong’s Yuen Long district, Apple contractor Li Tong Group runs a 300-worker factory dedicated to meticulously grinding up and recycling some of the half-billion iphones sold, used, and discarded globally over the past nine years. The plant is one of a handful Apple has employed to destroy its old devices.
While HP, Huawei Technologies, Amazon.com, Microsoft, and other companies have detailed protocols for recycling their products, Apple’s are the most rigid, say three people involved in the company’s processes. To make sure no material goes missing, the Li Tong factory weighs the iphones it’s destroying and the shreds that remain afterward. This rigor helps keep many of Apple’s phones out of landfills—and off the resale market.
In the electronics-recycling business, the standard goal is to collect and recycle 70 percent, by weight, of the devices a company produced seven years earlier. Lisa Jackson, who oversees Apple’s environmental and social policies, says the company and its contractors typically reach 85 percent, meaning they’ll destroy the equivalent of more than 9 million of 2009’s iphone 3GS models this year around the world. Apple says it collected more than 40,000 tons of e-waste in 2014 from recycled devices, including enough steel to build 100 miles of railway track. “I think people expect it of us. I think our customers hold us to a high standard,” Jackson says. “It’s difficult, because these are incredibly complex pieces of product.”
With iphone sales climbing to 155 million units last fiscal year, grinding them up is a growth business. Li Tong, which also recycles equipment from other manufacturers, has three sites in Hong Kong and 12 in China, Japan, and elsewhere. The company says it’ll expand its global capacity by more than 20 percent this year, including a new facility in San Francisco.
Along with Li Tong, Brightstar in Miami, TES-AMM in Singapore, and Foxconn Technology are part of a network of recyclers that have agreed to Apple’s more than 50 phonedestroying rules, which cover everything from security and insurance to letting Apple monitor their processes with on-site staff. The companies declined to provide access to their facilities for this story.
The recycling process starts at hundreds of Apple Stores worldwide or online. Apple lures iphone owners by offering credit in exchange for phones it will reuse or recycle. In the U.S., payouts for a working phone range from $100 for the smallest-capacity iphone 4 to $350 for the largest-capacity iphone 6 Plus. Testing, including by-hand inspection, shows whether the phone can be resold or must be broken down. Apple and its contractors declined to say how many devices they reclaim annually, how many are resold, or how many go to the crusher. Once a phone is deemed ready for the scrapheap, it begins a 10-step deconstruction process that looks a lot like Apple’s production model in reverse. The company pays for the service and owns every gram of used phone, including the pile of dust left at the end, says Linda Li, chief strategy officer for Li Tong.
To prevent waste from being dumped in landfills abroad, dead iphones aren’t shipped across regions. The contractors wipe the phones’ storage and remove their logos before sending them to be recycled. The company requires its scrap to be kept separate from that of other brands, so recyclers must have dedicated Apple facilities, Li says. Each step of the process involves vacuum-sealed rooms, which capture the chemicals and gases released as the devices are broken down.
Apple’s full-destruction policy is more stringent than those of competitors, which typically salvage chips or other components. “The contracts with Apple always involve excessive amounts of destruction,” says Kyle Wiens, cofounder of Ifixit, a repair website that sells parts. “Anytime you are reducing the supply of parts in the market, you raise prices. What would really shock people is just how much value you lose when you shred something down.”
Li Tong says it advises other clients on ways to reuse parts of their electronics— taking cameras from smartphones to be used again in toy drones, say, or adapting screens from Microsoft Surface tablets for use in New York taxis. Jackson says that Apple’s approach makes it tougher for phony iphones to show up on the gray market and that the company is working on ways to reuse components. “There’s an e-waste problem in the world,” she says. “If we really want to leave the world better than we found it, we have to invest in ways to go further than what happens now.” She declined to elaborate.
Once an iphone is ground into bits, the hazardous waste from the components (such as cadmium and arsenic) gets shipped to a facility licensed to store it. Depending on the terms of their deal, the recycling partners take commissions on sales of extracted materials such as gold and copper. The rest of the component elements will be reincarnated as window casings, office furniture, and a host of other items. “Anything that’s made out of aluminum,” Wiens says, “could have been an iphone.”
The bottom line Apple’s recycling contractors put old iphones through a scrapping process almost as complex as the devices’ assembly.