Monday, February 20, 2006

The Dilemma of Computer Reuse

A couple of years ago, when the price of a personal computer started to fall dramatically--thanks to Dell's influence both on manufacturing and advertised pricing--my brother asked me a particularly difficult question. He is a professor of business, by the way, at the University of California at Davis (, so this was just the kind of question he would ask: "Are used computers like used cars or like used televisions?" The implied meaning was that a used car gets resold and reused, but a television just gets thrown away. I can remember going to a TV repair store some years ago to repair our "large" TV (17" or something), and seeing dozens of televisions in the front room of this repair shop. I said, "Your business must be booming." The owner said, "No, these are all the televisions that people have dropped off, but have decided aren't worth the expense of repairing." When my brother asked the question, I was still hoping that the used computer would be like the used car, but I think the reality is that it is now like the used television.

There are a several reasons for this.
  • First, of course, is the lowered price point for purchasing a personal computer. The prices have gone down, and the marketing strategies have also effectively lowered the "perceived" price of a computer. (Most people have had the experience of seeing the $300 computer advertised, and then finding that they have spent $600 or $700 when all was said and done.)
  • Second, eBay has had a huge impact on pricing in the used marketplace--as I am sure they have in many industries. Not that the price you see on eBay should have any real bearing on what you would pay for a warranted and refurbished computer, but it does, because eBay has become the point of comparison pricing. While the price of a Pentium 3 computer may be $100 on eBay, a refurbisher cannot buy a comparable computer wholesale, pay for refurbishment and overhead, and then make a profit selling at the same price. More than likely just the costs for the refurbisher will be more than the $100 selling price on eBay.
  • Third, Microsoft's licensing policies have basically made it impossible for resellers to legally transfer a Windows license. I've loved Microsoft for years, and greatly appreciate what they have done to make the personal computer a great, productive tool--but it's a shame that the cost to put a current license on a used computer is often more than the price of the computer. If for nothing else, this has killed the market for commercial refurbishment.
  • Fourth, the manufacturers have a lot of incentive to get us to buy a new computer, even if we don't really need one, since that's where they get their revenue. No different than any other market. The new car I buy doesn't really get me anywhere any faster than the older one, it's just snazzier--and since the majority of computer usage is just web, email, and word processing, we could keep using our old computer for a lot of things if we didn't keep being told we need a new one.
  • And finally, when the cost of having someone repair your computer or get rid of some troublesome virus is more than the price of a new PC, well, guess what the obvious answer is...

I don't believe that there are any really good statistics for how many computers get reused in this country, but the EPA estimates that 60 million become obsolete each year, with the great majority getting thrown away, shipped overseas, or left in the closet. The unknown dark secret of the used computer industry for a couple of years has been just how much equipment is just getting put into containers and shipped overseas. Most people in the know think it has been a significant percentage--as high as 80%. Organizations like the Basil Action Network ( and the Silicon Valley Toxics Coalition ( have worked hard to educate about the environmental and human rights issues associated with computer dumping, but it's not even clear if most of what is being shipped overseas is being dumped. Much is certainly also being reused, and likely without any concern about legal software licenses. And there are rumors that much of the equipment bought in the last few years was done so to recover data off of hard drives (could that really be?). Which brings up another point: if the potential liability of possibly having data on my hard drive get out exceeds the value of the computer, as it probably does for computers used in health care, for example, then it's smarter for me to throw it away than to reuse it. Working in the industry as a for-profit computer refurbisher, I can tell you one thing: only a very small percentage of computers are getting reused.

At the same time, however, there has probably never been a greater need for working computers by schools and non-profits that don't have the funds to purchase new computers. Jim Lynch from CompuMentor has documented much of this in his excellent report, "Islands in the Wastestream" ( And while there are some 400 non-commercial refurbishers who accept donations and cater to this need, the great majority of those are organizations that were started as "labors of love" and don't have the wherewithal to really mobilize and produce large quantities. In Canada one out of every four computers in their schools has been refurbished--but I visited that program and went through the numbers, and when you factor in the services donated and the labor programs, it costs them more to refurbish a computer than it would to buy a new one. And we don't have the tolerance for social programs like that here in the U.S. We'd rather there was a commercial motivation. The problem is, there's not enough profit for a real commercial motivation to take hold. And (the subject of some other day), just getting a computer into the hands of a needy organization is only part of the battle--they also have to be able to set it up and keep it running. Why don't schools want you to bring your old computer over to them? Because setting it up and getting it to work in their environment will often cost more to them than buying a new one.

There is also the environmental side. Even without conclusive studies relating to the disposal of computers in landfills, there are compelling environmental reasons to reuse a computer. With a refrigerator, 20% of the environmental cost is in the manufacture, and 80% in its use (mostly electrical). So, it makes sense to throw away a refrigerator that is less efficient or not the latest energy-saving model. But with a personal computer, 80% of the environmental cost is in the manufacture, and 20% in the use. That's because the natural resources in excess of the weight of an SUV are required to make a PC, largely because of the miniaturization involved. So the best possible thing we can do, from an environmental standpoint, is to reuse our computers, or pass them along to someone who can; and that's not happening much.

It's a dilemma.


  1. Anonymous1:32 PM

    Here's a solution, Steve, the M$ "Fresh Start" programme. What is needed is a non-profit foundation that can transfer these machines, allowing the individual schools to register the donated gear:

  2. Microsoft's Fresh Start program really is a good one, but it requires that the computer be donated, as you have indicated. Again, as a theme that I end up discussing a lot, this leave the commercial market out of the equation. We can talk about the virtues of non-commercial or non-profit organizations all we want (for good reason), but I believe that the reason that such a small percentage of computers get reused in this country (<5%) is because the energy and motivation of the commercial market is not brought to the table here. When the replacement license for the operating system costs more than the value of the hardware (often the case), there is just no opportunity for profit.

    As much as I really appreciate the efforts of the non-profits in the used computer arena, most started as labors of love and don't have the inventory, accounting, and marketing skills to really address the volume and scope of this situation. So instead, the commercial companies just collect computers, put them in containers, and ship them overseas...

    As I remember, there can be a "reasonable" fee charged by a non-profit getting a computer to a school and having it still qualify as "donated" for Fresh Start. So a larger non-profit could theoretically focus on this as an area of business; however, there is risk in the purchasing of newer, off-lease equipment and it might be hard for a non-profit to justify the risk of inventory loss, etc. if the market turns (and the market has turned too many times in the last few years for anyone to be very comfortable).

    Do you have an idea about this?

  3. I think there has probably never been a greater need for working computers by schools and non-profits that don't have the funds to purchase new computers.


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