Fairphone Pushes Smartphone Companies to Become More Environmentally Friendly

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1Q 2022 | IN-6451

According to a United Nations report, every year 1.4 billion smart devices are sold worldwide, with millions being discarded after only 2.7 years. With 50 million tons created each year, electronic waste (e-waste) is the world's fastest increasing waste source. Considering this, Fairphone, a social entrepreneurship firm based in the Netherlands, designs and manufactures smartphones with reduced environmental and social effects, highlighting the potential for a more equitable future within the tech industry. Furthermore, the company’s latest smartphone, namely the Fairphone 4, has demonstrated how far smartphone manufacturers might go to improve product durability and address product life extension. Therefore, even though the company is not expected to become a worldwide leader in smartphone sales, it still represents a notable example to the industry for implementing a fairer, more sustainable approach to innovative product and service design, while making a positive impact across the value chain.

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Fairphone's Recyclable Smart Devices are Long-Lasting and Fair


Given the constant rise in demand and production volume in the electronics sector, as well as the concentration of harmful and valuable components being used in the manufacturing process, the volume of e-waste created is becoming a growing global concern. In an effort to reduce this impact, Fairphone has highlighted the potential for the major tech companies to reshape the industry by creating smart devices that are more sustainable and long-lasting. The company was launched in 2010 as a public awareness campaign with a mission to design and manufacture mobile phones with reduced environmental and social effects.

Fairphone is considered one of the most environmentally conscious enterprises in the mobile technology sector. Notable activities include collaborations with the Fair Cobalt Alliance to improve the situation for artisanal miners in the Democratic Republic of Congo, alongside many other groups such as B Corp and UN Global Compact. The company works with Closing the Loop on safe electronic-waste recycling in Africa and with Teqcycle on phone recycling in Europe. Fairphone in collaboration with Closing the Loop has contributed to the collection of phones in Uganda and Rwanda to encourage consumers to return obsolete smart gadgets in Europe to improve phone recycling rates closer to home. In 2020, through collaboration with its partner, Teqcycle successfully restored around 40% of the smartphones collected. Additionally, Fairphone has worked with iFixit to produce open-source repair guidelines for the smartphone, designed to extend phone's lifetime by two to three years. Fairphone has demonstrated that businesses may still be able to profit while prioritizing social and environmental objectives.

Sustainability Transformation Within the Smartphone Industry being Driven by Fairphone


The target of Fairphone's initial crowd-funding campaign for its first smartphone was about 5,000 individuals, but 60,000 people ended up ordering the Fairphone 1 model in 2014 worldwide. In 2015, the company launched its first modular smartphone, Fairphone 2, becoming its first smartphone to integrate Fairtrade Gold, an independent ethical certification system for gold, into its supply chain. Two years later, when the Fairphone 3 was released, 54,000 handsets were purchased, mainly in Germany, followed by France and Switzerland. Moreover, the successful launch of Fairphone 3+ in 2020 generated a profit of €0.7 million, aided by a non-cash tax benefit of €2.0 million. In addition, the Fairphone 3+ came with an upgradeable camera module that customers could easily change themselves. Additionally, the phone's lifetime was extended by two to three years by combining a modular architecture with the power of repair, significantly lowering its annual environmental effect. The Fairphone 3+ was constructed using 41% post-consumer recycled plastics, which represented a significant increase over the company's previous 9% for the Fairphone 3. In 2021, Fairphone sold combined model units of 95,000, with accessories and replacement parts bringing in €36 million in sales.

Launched in October 2021, Fairphone’s fourth-generation mobile, the Fairphone 4, is a 5G smartphone that includes a 100% recycled plastic rear cover that can be removed and a Qualcomm Snapdragon 750G microprocessor. As with its previous smartphones, users can repair the phone themselves, and a battery charge is said to last about two days. Fairphone has committed to providing Fairphone 4 support until the end of 2025, with plans to extend it as far as 2027.

The Fairphone 4 is not equipped with a headphone jack and so the company has decided to also move into the wireless earbuds market. However, as earbuds have an environmental disadvantage owing to their shorter battery life, Fairphone has committed to using Fairtrade Gold and 30% recycled plastics in the product. At a price point of just £89.95, the Fairphone True Wireless Earbuds hit many of the right notes in terms of audio performance and come with active noise cancellation.

Fairphone's Strategy is Making an Impact Through its Circular Business Approach


When developing a new circular business model based on principles of fair trade, increasing product durability and addressing product life extension are critical considerations. Fairphone is notable for building smartphones and is an excellent example to the industry, motivating others to create more environmentally friendly, sustainable, and ethical devices. Dematerialization, product life cycle extension, recovery of secondary raw materials, product-service systems, sharing platforms, and collaborative consumption are all examples of a circular economy that Fairphone has perfectly embraced in its business model. However, Fairphone recognizes that it won’t be able to compete with the likes of Apple, Google, or Samsung in terms of smartphone shipment volumes, and it quite possibly does not wish to. However, the firm must continue to invest more in improving and optimizing its devices and designs, while understanding that lack of software updates will eventually slow its phones, even though these will be considerably difficult to implement for such a small company.

Fairphone’s influence inside the electronics business continues to expand each year. Fairphone analyses its industry effect using a mechanism that distributes points to firms who follow Fairphone’s objectives depending on their size, influencer, and market value. For example, Fairphone received 31 influence points in 2020 due to its relationships with Glencore (Commodities Metals and Mining), and Tesla (Automotive and Renewable energy), up from 10 in 2018 and 13 in 2019. As it is being demanded more from customers and regulators, the smartphone industry is beginning to take repairability more seriously. Last year, for example, Apple began selling new screens, batteries, and other parts directly to customers in response to government legislation pushing companies towards more ethical practices. However, considering the glue and specific screws that keep everything together in an iPhone, it still doesn’t make the repair any easier for users. Meanwhile, Android phone maker Google has abandoned detachable back panels in its more recent smartphone launches that formerly made battery replacements simple, thereby negating the ability to extend the lifecycle of the device.

The sourcing of raw materials used to build components for smart devices is also a matter of dispute, as they are commonly sourced in the Democratic Republic of the Congo where the mining trade has been used to fund brutal conflicts for many years. Few smartphone vendors come close to Fairphone in terms of ethical sourcing, although both Apple and Alphabet have very good policies in terms of mineral sourcing, and Apple and Huawei are recognized for their good toxic chemicals management and disposal. In addition, Samsung collaborates solely with eco partner-certified suppliers through which they can assess and manage the environmental impact that may occur in from their components, raw materials, and manufacturing processes. However, Motorola does not appear to have phased out toxic chemical management from their products, despite its intention to have it improved.

So, even though Fairphone has already stated that it is unlikely to overtake prominent players as a global leader in smartphone sales, it has shown that there is room for improvement when it comes to sustainable production. Nevertheless, even the slightest of changes made in the supply chain and manufacturing of smart devices from lead smartphone businesses may have a considerable positive effect on the environment, enable greater fairness in the industry, and trigger a much-needed reduction in e-waste.