Why Ap­ple will not be able to stop dig­ging holes yet

The National - News - Business - - Analysis -

Just be­fore Earth Day, Ap­ple an­nounced a new goal: to make its com­put­ers and phones and watches with­out min­ing any new raw ma­te­ri­als. In­stead, Ap­ple would one day build its prod­ucts “us­ing only re­new­able re­sources or re­cy­cled ma­te­rial”. This is what is known as a “closed loop”, in which new prod­ucts are made ex­clu­sively from older ver­sions of the same prod­uct. If suc­cess­ful, Ap­ple would no longer have to worry about dig­ging holes in the ground, thereby avoid­ing con­flict min­er­als and the other messy de­tails of high-tech man­u­fac­tur­ing in the 21st cen­tury.

It’s a bold idea, even for Ap­ple, which can boast sev­eral past suc­cesses in pro­mot­ing sus­tain­able man­u­fac­tur­ing and op­er­a­tions. Given both tech­no­log­i­cal and com­mer­cial ob­sta­cles, how­ever, it’s al­most cer­tain to fail.

Closed-loop re­cy­cling isn’t a new idea. In the 1930s, Ford Mo­tor spent sev­eral years op­er­at­ing a money-los­ing fac­tory de­voted to re­cy­cling old Fords into raw ma­te­ri­als for new ones. More re­cently, Dell de­vel­oped a break­through com­puter made us­ing ma­te­ri­als from old de­vices. The com­pany and its man­u­fac­tur­ing part­ners have been mak­ing plas­tic parts for those com­put­ers from old elec­tron­ics since 2014, and the process has shrunk Dell’s costs and en­vi­ron­men­tal foot­print.

For its part, Ap­ple plans to fo­cus on re­cy­cling 44 el­e­ments found in its prod­ucts. Yet while some – alu­minium, for ex­am­ple – are al­ready re­cy­cled com­mer­cially, many oth­ers never will be. For ex­am­ple, ac­cord­ing to Ap­ple, an iPhone 6 con­tains .01 ounces worth of rare earth el­e­ments (17 chem­i­cal el­e­ments es­sen­tial to to­day’s tech­nol­ogy) in com­po­nents that in­clude the hand­set’s speak­ers and touch­screen dis­play. That is a tri­fling vol­ume that can­not pos­si­bly be ex­tracted and sep­a­rated in a com­mer­cially vi­able man­ner us­ing cur­rent tech­nol­ogy. (Ap­ple ad­mits that its goal is as­pi­ra­tional at the mo­ment.)

Ap­ple could look to re­cy­cle rare earths from prod­ucts it doesn’t make it­self; new tech­nolo­gies have made it pos­si­ble to ex­tract rare earths from old mag­nets and LED bulbs, for in­stance. But that would ob­vi­ously break the closed loop. Other com­mon el­e­ments found in Ap­ple tech­nol­ogy – such as tan­ta­lum and tung­sten, two rare me­tals used in small quan­ti­ties – will be sim­i­larly hard to re­cy­cle in any cost-ef­fec­tive fashion.

As daunt­ing as the tech­ni­cal chal­lenges are, Ap­ple faces an­other, more im­me­di­ate prob­lem: how to get its hands on enough old iPhones and iPads to sus­tain a true closed loop. Ap­ple cur­rently en­cour­ages cus­tomers to re­turn old de­vices through its Re­new pro­gramme, in some cases in ex­change for gift cards (or at least health­ier con­sciences).

Yet even a ca­sual scan of eBay and other global mar­ket­places re­veals that Ap­ple’s buy­back pro­gramme isn’t ter­ri­bly competitive. For ex­am­ple, a used iPhone 4 in good con­di­tion can fetch over US$100 on­line, whereas Ap­ple of­fers no com­pen­sa­tion what­so­ever. Ap­ple’s highly touted Liam re­cy­cling robot is de­signed to dis­man­tle the 2014-vin­tage iPhone 6, which cur­rently sells for over $300 used.

And it’s not just the phones them­selves that have value, ei­ther. In the Chi­nese city of Shen­zhen, old com­po­nents are used to man­u­fac­ture a mul­ti­tude of new prod­ucts – even knock-off iPhones, as doc­u­mented in a re­cent vi­ral Youtube video in which a novice built a work­ing iPhone from a hodge­podge of Shen­zhen-sourced parts.

Noth­ing pre­vents Ap­ple from pay­ing mar­ket rates for its old elec­tron­ics. But that would re­quire ad­mit­ting that the re­use value of Ap­ple prod­ucts of­ten­times ex­ceeds the com­mod­ity value that the com­pany would like to ex­tract from them. That is a dif­fi­cult men­tal leap for a com­pany de­voted to con­vinc­ing con­sumers that they con­stantly need to up­grade to the lat­est de­vice.

If noth­ing else, Ap­ple should fo­cus less on the im­pos­si­ble dream of creat­ing a closed loop of Ap­ple prod­ucts and in­stead com­mit to in­clud­ing greater vol­umes of re­cy­cled ma­te­rial into its cur­rent prod­uct lines, with­out re­gard to whether the ma­te­rial comes from MacBooks or Ford cars. (To its credit, Ap­ple has started us­ing re­cy­cled tin in the iPhone 6S.) Such an ap­proach would al­low mar­kets – and not Ap­ple to de­cide when a prod­uct should tran­si­tion from use­ful de­vice to com­mod­ity and likely to save the com­pany money and trou­ble for years to come.

Ap­ple should com­mit to in­clud­ing greater vol­umes of re­cy­cled ma­te­rial into its cur­rent prod­uct lines, with­out re­gard to whether the ma­te­rial comes from MacBooks or Ford cars

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