The ITAD Report

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Pandemic prompts IT spending cuts


The coronavirus pandemic has disrupted worldwide supply and demand for new PCs, bringing both bad and good news for computer recyclers and refurbishers, according to Gartner. The markets research firm reports that, during the first quarter, shipments of new PCs around the world declined by 12.3% year over year. It was the steepest drop seen since 2013, and it came after three consecutive quarters of growth. The data includes desktop and notebook PCs but not Chromebooks or iPads. A press release from Gartner pointed to a number of factors affecting the market:

  • Chinese challenges: Because of the lockdown in China that started in late January, fewer new PCs were produced. Later, logistics challenges added to the difficulty of getting those devices to market.
  • Demand for remote work and study: Once the lockdowns spread to other regions, there was suddenly PC demand for remote workers and online classrooms. Gartner noted manufacturers could not keep up with the demand. The effect has also been increased demand for refurbished PCs, (Inrego’s comments).  
  • Businesses slow IT spending: Gartner noted businesses are reducing their IT spending because of overall economic uncertainties, especially small and midsized companies. “This uncertainty is causing enterprises to shift their IT budgets away from PCs and toward strategic business continuity planning,” Mikako Kitagawa, research director at Gartner, stated in the press release. Kitagawa said organizations and consumers alike will extend their PC life cycles. That could delay those devices entering the recycling and reuse steam. Some ITAD companies are already struggling to access material because their customers’ offices are closed, or IT staff have put asset disposition on the back burner.
  • U.S. trends: Because the virus impacts were most apparent in the U.S. late in the first quarter, PC shipments in the U.S. grew slightly (0.8%) year over year. But shipments fell by 30.2% from the previous quarter.

Source: Gartner

ITAD firms that weather the storm will see opportunity


Several ITAD companies will fail, but those strong enough to survive coronavirus-related revenue losses will encounter post-pandemic advantages, an ITAD market analyst predicts. “The year 2020 is expected to be the toughest to date for the ITAD sector,” wrote David Daoud of research and consulting firm Compliance Strategies. “Surviving the great pandemic crisis will be a matter of managing cost and tweaking strategy for the post-pandemic take-off.” Business shutdowns and work-from-home orders around North America have made it difficult for many ITAD and e-scrap recycling companies to obtain material for processing, even as demand for used electronics is high.

Putting asset management on hold

In his analysis, Daoud noted his firm’s research finds that ITAD decisions are handled by internal IT departments in about 70% of cases, but those departments right now are focused on helping company employees work from home. ITAD is being put on hold. “In this environment, ITAD companies must expect a substantial drop in ITAD-related activity, likely dropping to near zero level,” he wrote. “And although no one we spoke with provided a date for normalization, we assume that a return to normal could only happen after a cure against COVID-19 is announced and fully rolled out and executed. Until then, governments will continue to tighten restrictions on the movement of people.” As a result, he predicts several ITAD companies, particularly those without a cash cushion, will fold. Others, particularly smaller companies, will lay off employees as they idle processing capacity. Surviving companies will review non-essential expenditures and scale-back spending, he wrote.

The ‘rubber-band effect’

A recovery may not require a long period of market consolidation and restructuring. Companies that survive will likely enjoy a “rubber-band effect” and a recovery built on serving the pent-up ITAD services demand, particularly with fewer players providing ITAD services, Daoud stated. But the market may not look exactly like the pre-pandemic market. For example, companies and school districts may learn from this crisis that it is important for employees and students to have equipment so they can work and study at home. That could drive demand for PCs. But it will also mean ITAD companies must find a way to serve the “distributed and retail nature of the coming PC base.”

Additionally, he predicted that among some segments of the population, the virus concerns will reinvigorate their environmental concerns. As a result, the environmental stewardship role of ITAD will likely return to the fore, he said.

The suggested that companies at risk of closing consider talking with their peers and competitors about mergers to survive. “Remember that Arrow’s exit from the market has created an opportunity, and in this current environment, major corporations that have ITAD as a tiny subset of their business could realize that this is now the best time to disengage, creating more uncertainty on the supply side,” Daoud wrote. “If you are willing to join forces with other peers, this may be the perfect time to start talking.”

Source: e-scrap news

EU funds for green businesses


If you are a small or medium-sized company (SME) seeking financing for new, green products or services, don’t miss out to apply for EU money.

Companies that apply must be established in an EU Member State or a Horizon 2020 associated country. Large corporates, research centers or scientists cannot apply directly but they can participate in projects as subcontractors or third parties and don't need to be established in an EU Member State or associated country.

Have a look the EU definition of SMEs to see if your company fits the bill. If not, the EIC enhanced pilot offers different kinds of support at different stages of the innovation cycle and for different types of applicants. Try out the EIC wizard to see which innovation funding instrument suits you the best.

The EU Parliament wants binding rules on common chargers


The European Parliament calls on the Commission to put forward beefed-up rules on common chargers by July 2020 at the latest.

There is an “urgent need for EU regulatory action” to reduce electronic waste and empower consumers to make sustainable choices, MEPs say in a resolution approved by 582 votes to 40, with 37 abstentions, calling for the mandatory introduction of common chargers for all mobile devices. Without hampering innovation, the EU executive should ensure that the legislative framework for a common charger will be “scrutinised regularly in order to take into account technical progress”. MEPs reiterate that research and innovation are vital to improve existing technologies and come up with new ones.

Parliament also wants the Commission to:

  • Take measures to best ensure the interoperability of different wireless chargers with different mobile devices.
  • Consider legislative initiatives to increase the volume of cables and chargers collected and recycled in EU member states.
  • Ensure that consumers are no longer obliged to buy new chargers with each new device.
  • Strategies to decouple the purchase of chargers from the purchase of new devices should be introduced with a common charger solution, MEPs say, stressing however that “any measure aiming at decoupling should avoid potentially higher prices for consumers”.

According to estimates, around 50 million metric tonnes of e-waste are generated globally per year, with an average of more than 6 kg per person. In Europe, total e-waste generated in 2016 was 12.3 million metric tonnes, equivalent to 16.6 kg on average per inhabitant. Short lifecycles for some devices also lead to more e-waste, notes the resolution.

  • A standard for a common charger must be adopted urgently
  • Measures empowering consumers to make sustainable choices
  • Decrease e-waste generated in Europe (16.6 kg on average per inhabitant