Greater circularity in the tech industry is a global concern. Today’s technology leaders have a presence worldwide, making and selling devices to millions of people, and the decisions they make about the life cycles of those devices — such as designing them for multiple generations of use — have a global impact.
However, as CCS Insight’s research into second-hand devices has grown, I’ve been increasingly fascinated by the role of different regions in the market. Europe is a particularly interesting example, with the interaction of forces such as demand for devices, supply chains and regulation creating a unique situation.
A good place to start is the European Parliament’s definition of the circular economy: “a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible … the life cycle of products is extended”. It’s a neat summary and a useful reference.
This definition of circularity matters because Europe as a region has become increasingly influential in the global debate, and the EU is a leader in device-based policy. In 2023, we saw the ability of the bloc to drive through new standards like USB-C, which forced a visible change in industry behaviours, with Apple adopting the charging port on its iPhone 15 range.
It appears that a greater level of device repairability is the next major focus. 2023 saw the European Commission adopt a new proposal to enable and promote the repair of consumer goods, including electronic devices. This move would aim to offer a European quality standard for repair services.
However, regulation can be a difficult dynamic, and it creates a unique situation for Europe in less positive ways. A growing challenge for companies throughout the organized secondary device market is standards when trading in Europe.
The CE mark has long been established as a requirement for goods sold in the EU and has been adopted by other markets as well. The label indicates that products have met legal requirements and been tested for safety in the markets they’re sold in.
The reason this is problematic in the second-hand market is because of regional imbalances in sourcing and reselling devices. CCS Insight’s research has found that second-hand smartphones — most significantly iPhones — being traded in the secondary European market are overwhelmingly sourced from overseas, usually the US and Japan. These devices, originally produced without a CE mark, are legally barred from markets where the standard is required.
There are two main challenges here. The first is demand outstripping supply. Of course, it’d be easier for the European second-hand market to trade on devices originating in the region, but there’s currently a shortfall. Demand for used iPhones is central to the second-hand market overall, but there aren’t enough high-quality Apple smartphones being traded-in within Europe; as such, import becomes necessary.
The second challenge is that there seems to be inconsistency in the application of rules like CE marking. We’ve heard from across the industry that some countries are essentially turning a blind eye to the requirements for CE marks and others are enforcing the rule heavily. This means firms are having to explore options for labelling imported devices correctly ahead of sale, a frustrating slowdown in their processes. It makes it far harder to match second-hand devices with prospective buyers across regions.
This isn’t meant as a criticism of the European approach. CE marking is an important guarantee of quality on consumer goods and means buyers can trust that they’re safe to use. But it shows how emerging markets and concepts, such as the rapidly maturing circular economy, have to contend with the realities of the overall economy and polity at regional and national levels, which isn’t always easy.
For the circular economy, crucial questions remain, and players in this industry are wary about changes in regulation and the way that they’re applied across Europe, both within and outside the EU. CE marking probably won’t be the last barrier to the easy movement of devices; increasingly heavy regulation around USB-C could affect the market for second-hand devices as well as new ones.
CCS Insight continues to research this topic in detail, and we’ll be attending MWC at the end of February. If you’re interested in booking a meeting to learn more about our circular economy research, please get in touch.
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