Created by Bamboo Mobile, a Division of

February 2014

Reuse and Recycling: Idle Device Market Sizing and Forecast Free Excerpt

The Future of Mobile Device Recycling

Table of Contents

2013-2018 Forecast Estimates and Observations:

Introduction/Market Overview 2-13

Total Idle Devices 15

Idle Devices by Condition 16

Idle Devices by Cons vs Biz 17

Idle Devices by Type 18

Total # of Idle Devices Being Recycled 19-22

By Channel 23-25

By Device Type 26-28

By Device Condition 29-31

By Carrier 32-36

Revenue Payout for Buy back or Trade-ins 37-39

Other Observations 40-42

Methodology and Definitions 43-44

About Us 45-47

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INTRODUCTION AND OVERVIEW

REUSE AND RECYCLING

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The Reuse and Recycling Ecosystem

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Companies in the ecosystem range from carriers to recycling and reverse logistics vendors

Carriers 3rd Party Retailers

Recommerce/ Online

Retail

OEMs Support Vendors

Note: Many e-scrap recyclers and wholesale vendors are also part of this market but not represented in this report.

Prior to 2011, there were only a handful of companies doing in-store device buybacks—Sprint, RadioShack, Best Buy to name a few. More recently, big names like Walmart, Apple and Microsoft have all launched trade in programs so the momentum is high in this area.

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Idle Device Reuse and Recycling Market

• The recycling, trade-in and buy back markets continued to grow in 2013.

• New programs from Apple, Walmart and Microsoft have increased exposure of device recycling.

• Early upgrade programs and customer awareness will likely increase take back rates as well.

• 81% of mobile users we surveyed said they would either recycle in the future.

In the end of 2013, there were about 370

million idle, non-active devices in the

market.

About 59M were actually turned back

in, sold back or recycled in 2013.

We expect high growth with about

174M devices being traded in by 2018.

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MARKET SIZE AND BREAKOUTS

REUSE AND RECYCLING

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There were about 370M used, idle mobile devices in the US at the end of 2013.

370M 396M

422M 438M 452M 461M

2013 2014 2015 2016 2017 2018

Idle Device Breakout

Total IDLE Devices

These devices include basic flip phones, feature and messaging phones, PTT, smart phones and tablets. A mobile device is deemed idle if it is not active on a carrier network and is in the

possession of an end user.

Notes: Numbers do not include buyer's remorse. Idle-Powers On indicate those phones (currently not being recycled) that could be put back into the ecosystem, sold as pre-owned devices. Idle-Does Not Power On are devices currently not being recycled but would be sold for components and smelted down. Idle-being recycled (these phones either end up back in the market, refurbished or recycled.) Carriers also use gently-used devices as replacements for insurance claims.

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METHODOLOGY AND DEFINITIONS

REUSE AND RECYCLING

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Research Methodology

Sources:

Compass Intelligence’s segment and market forecasts, which include business expenditures, market demographics, and usage and adoption statistics are built using multiple sources, including proprietary Compass Intelligence research. These sources include, but are not limited to, secondary research, government data and statistics (e.g. CTIA, EPA, FCC, Bureau of Labor Statistics and US Census Bureau), primary research, vendor-based research and in-depth interviews with key decision-makers, where relevant.

Approach:

We develop forecast models using a combination of top-down (estimating the total size of the market) and allocation (allocating a total across several segments) methods. Forecasts are structured to provide a detailed picture of a given market from a segment/directional perspective. This approach is used to leverage our expertise in these areas and to provide a better basis to benchmark results and correlate them to other markets.

Recycling rates determined by information gleaned from primary research on how many subscribers upgrade, how often they upgrade, whether they trade in a device at upgrade and what type of device. Other drivers for the forecast includes carrier reported numbers and other sources like EPA, CTIA, and other recommerce vendors. Some assumptions derived from what end users say about when and if they trade in a device at upgrade. Also, estimates based on industry standards around frequency of phone upgrades.

Revenue assumptions for buy backs begin with subscriber forecast as a baseline, as well as primary and secondary information on device type, device pricing and frequency of upgrades. The market sizing includes basic, feature and smart phones as well as tablets. Basic phones have a low resale value but are valued at least $1 in this model. Average resale price fluctuates so estimates are used for each device category. Baseline includes information reported by some of the carriers. Sprint adjusted to remove buyer's remorse (Sprint reported $120M in payout in 2012).

Validation:

Our forecasts are validated in several ways, including by benchmarking final results with relevant outside data sources, where available, particularly, industry and government statistics, and/or with insights for key decision-makers in the industry.

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Definitions

Idle/Deactivated mobile phones

These are devices that are no longer active or running on a wireless carrier network. These do NOT include Buyer's Remorse or devices returned during the carrier's money-back guarantee timeframe.

Idle from Upgrade

Mobile phones that are idle due to an upgrade and may have value. These mobile phones are sometimes kept on hand and saved for a back-up, family member or other reason. These phone continue to power on.

End of Life (idle on hand)

End of life phones have no value and cannot be refurbished.

These phones are either broken or too old for use. They are decommissioned and sold for parts, and gold, copper and other materials are recovered. End of Life (idle on hand) are the mobile phones customers could recycle but are stored away and sometimes forgotten about. These phones often do not power on.

End of Life (being recycled)

End of life phones have no value and cannot be refurbished. These phones are either broken or too old for use. They are decommissioned, sold for parts, and gold, copper and other materials are recovered. These End of Life mobile phones are being recycled today. These phones often do not power on.

Recommerce

Vendors who buy previously owned electronics. Examples include Gazelle, ecoATM, etc.

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About Bamboo Mobile

• At Bamboo Mobile, we are building a strong foundation for those companies in the mobile industry that seek insights and information focused on eco-friendly efforts in the industry. • Device reuse and recycling, green packaging and devices with the goal of aiding

the industry in creating a stronger and more resourceful mobile world are a few examples of our key topic focus.

• At Bamboo we strive to: • Provide insights that enable companies to achieve their eco-centered goals. • Research and analyze topics associated with green mobility issues. • Offer an advertising and vendor education platform via out platform.

• For more information, please contact

Kate Pearce kpearce@compassintelligence.com Ph: 913.219.6477

• Or Visit Bamboo Mobile at www.bamboo-mobile.com

In real life application, bamboo is renewable, biodegradable and supports local economies. In Chinese culture, bamboo is revered and considered a symbol of longevity and good luck.

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About Compass Intelligence

• Founded in June of 2005, Compass Intelligence - a decision analytics research and consulting firm - redefines market intelligence and consulting.

• We have more than two decades of experience guiding business decisions using in-depth segmentation research that leverages creative, unique, and dependable methodologies.

• Our services include strategy acceleration, consulting and ideation services, market segmentation, market research/intelligence, and competitive analysis.

• 6 research track areas including Mobility/Wireless, M2M/IoT, Digital/Online Customer Experience, Bamboo Mobile, Emerging Technology, and Thought Leaders Research.

• Our focus is to provide individual decision analytics to clients while simplifying the research procurement process.

• Compass Intelligence became a certified Woman-owned business in December of 2009.

• To find out more, please visit our site at www.compassintelligence.com

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