News & Observer | newsobserver.com | Lenovo boosts recycling to generate revenue

Published: Jun 24, 2008 12:30 AM
Modified: Jun 24, 2008 05:18 AM

Lenovo boosts recycling to generate revenue

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WHERE OLD COMPUTERS GO

Computer manufacturers have range of recycling services. For more information, check these sites:

Apple: apple.com/environment

Dell: dell.com/recycling

Hewlett-Packard: hp.com/go/recycle

Lenovo: lenovo.com/environment

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Lenovo is in the business of selling gleaming new computers.

But it also aims to make more money from old ones.

The company, which has a world headquarters in Morrisville, has started a service to help businesses deal with aging machines.

Lenovo, through electronics recyclers such as GEEP, which has a large operation in Durham, will take back old machines of any brand, remove data, refurbish computers that still have life left and recycle those that nobody would want.

The move comes as businesses and consumers focus more on the environment and as all computer manufacturers look for new ways to generate revenue.

The amount of profit that companies such as Lenovo and Dell make from new computers has declined.

Computers are more like commodities these days, which keeps manufacturers from charging a premium for most models.

"Hardware margins have declined quite a bit over the years and, while they're not terrible, terrible, they're not good enough to sustain a company over the long term," said Roger Kay, president of technology research firm Endpoint Technologies Associates.

"All PC companies are trying to increase their proportion of services attached to their hardware."

Dell, Hewlett-Packard and many other manufacturers have long offered computer recycling. For some, it's a way to entice buyers.

Dell, for instance, will recycle Dell-branded products for free, and it takes other manufacturers' gear when a customer buys new Dell products.

Lenovo has had offerings, too. For $30, consumers can dispose of unwanted electronics gear through Lenovo.

Last year, the company said it facilitated the disposal, through refurbishment or recycling, of more than 38 million pounds of computers. But its approach largely has varied by geography.

Many business customers with operations around the world "have come to us and said, 'We need a global solution,' " said Henry Hicks, Lenovo's vice president of worldwide services sales and marketing.

They want a single contact with the "processes to ensure the stuff we don't need anymore is either going to get a second life or is being disposed of properly."

Many larger companies upgrade their computers every three to five years, making the issue of equipment disposal a serious one.

The companies not only want to avoid environmentally unfriendly actions that could embarrass them, they want to ensure that sensitive data are completely removed so as not to jeopardize proprietary plans.

Lenovo will provide options through its service to ease any fears.

Pricing will vary, depending on the needs of each customer, Hicks said.

The company wants to refurbish as many as 80 percent of the computers that it takes in. Customers will get money back from those that are resold.

In the coming months, look for Lenovo to roll out other services for its customers, Hicks said. It's working to develop services that are targeted to specific segments of customers -- small and midsize businesses, for example, or large multinationals.

"It's absolutely one of our growth strategies for the company," Hicks said.

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