Refurbished Smart Phones: Calling for Sustainability and Profit

Gal Raz ,

The first day that pre-orders were available for the iPhone 6 and 6 Plus, Apple and its carrier partners received more than 4 million orders. Service providers were set with a choice: Should they collect previous iPhone generations to refurbish and sell, and if so, how should they incorporate those items into their product lines?

Doing so had clear benefits — it would be inexpensive for the providers and help them sell high-end services that comparably priced, new phones didn’t offer. But the refurbished phones might take sales away from the new phones.

In fact, the sale of discounted, used devices can increase the sale of new products, as selling the refurbished product at an inexpensive price encourages lower prices all around and more sales of phones with high-end, data-rich plans that lead to profit for providers. If remanufacturing leads to more new product sales, that could mean the environmental impact might intensify — but that impact is balanced by the fact that refurbished products don’t go through the full manufacturing process, so the environmental footprint per-unit is far lower.

Read more about the nuances of how refurbished electronics can lead to sustainable and profitable growth in Darden Professor Gal Raz, Queen’s School of Business Professor Anton Ovchinnikov and Recanati School of Business Professor Vered Blass’ article “Bringing New Life to an Old Phone,” in the Darden School of Business/Washington Post “Case in Point” series.