How environmental factors have affected mobile phone prices: Sony Ericsson W550 W550 Sony Ericsson

EUROPEAN ENVIRONMENTAL LEGISLATION  Waste Electrical and Electronic Equipment (WEEE) - Consumers should have the responsibility of returning WEEE - Producers finance, arrange the collection, treatment and recycling of such waste - Adds a fee to electronic goods Free of charge DIRECTIVE 2002/96/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 January 2003 on waste electrical and electronic equipment (WEEE).(2003). An average fee for a handheld electronics device is €1.02 (EMSnow,2006) (Arcadis,2008, p.250) Competition among collective take back systems (Sony, Braun, Electrolux, HP) managed to keep prices low (Veit, 2005)

RESTRICTION OF HAZARDOUS SUBSTANCES (ROHS) Lead Mercury Cadmium Hexavelant chromium PBB PBDE (Directive 2002/95/EC of the European Parliament and of the Council, 2003)

In 2005 the same survey showed: -70% expected no change in prices -26% a potential increase in prices. In 2004 a survey on 53 component suppliers and 13 contract manufactures, showed: - 54% did not expect to increase prices for compliant parts after the legislation - 35% expected a potential price increase (Technology Forecaster, Inc. 2005,, p. 8)

Cost to the EU electronics industry: €59.6 million for initial compliance €4.7 million annually to maintain compliance (Arcadis,2008, p.100)

Global provider of mobile multimedia devices, feature-rich phones, accessories and PC cards. Manufacturer of the Walkman Phone Series Sony Ericsson, with an annual revenue of over $2.5 billion dollars the average cost of compliance would be averaged at $3.5 million (Arcadis,2008, p.100)

 The main part of a phone consists of solder paste  An increase of raw materials resulted in increased solder paste prices  It depends on the quantity used per phone It is estimated that lead free solder paste will increase the cost of an average computer product by 0.05% It is estimated that lead free solder paste will increase the cost of an average computer product by 0.05% (Solder Products Value Council,2006, p. 4)(Trends in the Costs of Raw Materials,2008)

W550, the second walkman phone manufactured by Sony Ericsson Screen: 262K colours Built-in memory: 230MB Radio and music listening Camera resolution: 1.3 megapixels Bluetooth

Total manufacturing cost estimate for the Sony Ericsson W550i Walkman phone (Cypress labs.2005.p.5) (Sony Ericsson W550 price history. (n.d) USD

Average Sale Price of SE mobile phones Euro

Summary Costs will eventually be passed on to users as all manufacturers in the sector will incur the same costs, so competition will not inhibit price rises Due to legislation, competition amongst take back systems managed to keep WEEE fee prices low Raw material prices used in assembly line increased more than 100% since 2006 but Sony Ericsson absorbs the costs due to competition Keeping WEEE fees low, costs the industry money (Arcadis,2008, p.117)

Solder Products Value Council, (2006). Cost of lead free solder materials. Retrieved from Sony Ericsson W550 price history. (n.d). Retrieved from Arcadis. (2008). Study on RoHS and WEEE Directives. Retrieved from ec.europa.eu/enterprise/environment/reports_studies/studies/study_on_rohs_and_weee_directives_final_report.pdf Technology Forecaster, Inc.(2005). Electronic component supply chain preparedness for substance-restriction requirements. Retrieved from Avnet website Trends in the Costs of Raw Materials.(2008). Retrieved from EMSnow.(2006) WEEE recycling cost. Retrieved from Veit, R. (2005, Nov 01). How do WEEE get it right?.EMSnow, from Cypress labs. (2005). Sony Ericsson W550i Walkman Handset. Retrieved from THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION.(2003). DIRECTIVE 2002/95/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 January 2003 on the restriction of the use of certain hazardous substances in electrical and electronic equipment. Official Journal of the European Union, L (37),19-23 THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION.(2003) DIRECTIVE 2002/96/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 January 2003 on waste electrical and electronic equipment (WEEE). Official Journal of the European Union, L (37),24-38 References

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