Giving new life to old phones

As many as 1.3bn phones will reach their “end-of-life” this year as leases and contracts expire, but instead of ending up unloved in a drawer, being sold on eBay or handed down to another family member, old smartphones are increasingly being given a professional makeover from a new breed of circular economy companies.

A report published today by research firm CCS Insight says more than 300m old smartphones were traded last year, with a growing network of organised resellers accounting for sales of 107m of them — growing 28 per cent compared to the previous year. CCS says the circular economy for used smartphones was worth $13.3bn in 2021, but this could more than triple to $44bn by 2026.

“The market is maturing rapidly and the industry structure remains fluid, with many companies emerging as serious players,” says Simon Bryant, vice-president of channel and supply chain research at CCS. He cites Back Market, Cashify, Genuine Solutions, PCS Wireless, Phobio, Recommerce, Renewd, Swappie and Umicore as key players.

Last week, I met Thibaud Hug de Larauze, CEO and co-founder of Back Market, the French company that raised $510mn at the beginning of the year for a valuation of $5.7bn.

He explained how Back Market, which operates in 13 countries, is an aggregator and marketplace for refurbishers and resellers, such as the UK’s musicMagpie.

“Back Market exists to create trust in the transactions of non-new products,” he says, referring to the quality monitoring of suppliers the company carries out and the recommendations it makes to buyers.

Monday’s company-wide briefings at the seven-year-old service report not just the previous week’s revenues but also how much was saved in terms of CO₂ emissions and raw materials. “To build the latest iPhone, it took 270Kg of raw materials and 70,000 gallons of water,” he says.

Back Market started out with smartphones but has extended its product range to laptops, tablets, consoles and other categories. “Our ambition is to be the global leader of the circular economy for tech products,” says Hug de Larauze. With the cost of living crisis and consumers’ growing environmental awareness, circular is one economy that is still set to boom.

The Internet of (Five) Things

1. Crypto crunch continues
Singapore-based Three Arrows Capital has failed to meet demands from lenders to stump up extra funds after its digital currency bets turned sour, tipping the prominent crypto hedge fund into a crisis that comes as a credit crunch grips the industry. On Wednesday, the value of bitcoin temporarily dipped below its “realised price” of $20,000 from its November high of $68,000 — meaning the average buyer has lost money. It has been a hard lesson to learn for many, says the FT’s editorial board.

2. Bitcoin mining declines
Bitcoin miners are scaling down production as sinking cryptocurrency prices and rising energy costs squeeze profits and slam their shares. The bitcoin hash rate, a measure of the amount of power dedicated to creating new coins, has fallen 4 per cent since the start of the week, according to data from Blockchain.com.

3. Tech jobs are hard hit by the downturn
Tech companies such as Coinbase, Peloton, Stitch Fix, Redfin, Compass and Carvana have announced significant redundancies, says Lex, as they try to cut costs in a tougher environment. It’s the same story in China, reports our Beijing bureau, where tech workers say it’s the worst job market they’ve ever encountered.

4. Where is the pandemic dividend for ecommerce?
For more bad news, Richard Waters has turned to ecommerce. Amazon’s share price has finally fallen back to its pre-pandemic level. Exchange traded funds that track the ecommerce sector have done even worse. What happened to the idea that the new online buying habits that people were forced to learn in the pandemic would lead to a permanent change in consumer behaviour? he asks.

5. The limits of robo-mops and AI
Gillian Tett discovered the limits of artificial intelligence when her robo-mop “escaped” and became entangled in a flower bed. In the wake of the sentient Google chatbot controversy, John Thornhill asks whether it is acceptable that private corporations have exclusive control over such powerful technological tools.

Tech tools — Pod cocktails from Bev

Bev, a new automated bartender, amounts to a pod-operated Nespresso for cocktails, writes Jamie Waters. It is dangerously easy to use, with a Margarita, an Old Fashioned and a Whiskey Sour produced by him in minutes. Out first in the US this summer, the $300 Bev is the work of Black+Decker, the hardware giant better known for drills than Daiquiris. It’s plugging a gap in the market for robot mixologists. The market-leading Drinksworks Home Bar was yanked off shelves late last year and, aside from a sleek Bartesian offering, there is scant competition. It’s one of five drinks gadgets reviewed by Jamie.