Is a Certified Used PC in Your Future? HP Thinks so...

Every year millions of PCs get recycled, many of which could still be very capable for a variety of use cases. This produces a great deal of waste and even with recycling programs, not all waste products get harvested and recycled. To combat this, some parts of the world are now mandating the reuse of perfectly good PCs after they reach their replacement cycle limit, mostly taking place primarily at enterprises, of 3-ish years. Indeed, France mandated that 20% of PCs be refurbished and reused, and other countries are following suit. PC makers are now seeing this not as a negative effect of their sales of new PCs, but as a way to both be more ecologically friendly as well as producing increased revenues.

HP Renew Solutions

HP has initiated its HP Renew Solutions program. HP Renew Solutions will offer certified refurbished PCs to users instead of just recycling them. HP indicates that not every PC that has been used can be refurbished. As they are turned into HP after their useful life, primarily from enterprise users, the PCs are graded from A to D, and only the best are then refurbished and released for sale. HP plans to offer them not only on their own web site, but also through partners, which will greatly expand the potential for these machines and make them available to a wider range of organizations and individuals. Further, they are qualifying independent companies that refurbish machines. Those that meet HP’s standards will be able to refurbish PCs, and HP will directly warranty those machines for one year, thus upping the level of comfort for purchasers who may not be enthusiastic about warrantees from relatively smaller refurbishers.

Extending useful life

The notion that a PC has a limited life due to hardware obsolescence is not always a valid assumption. Even a 3 year old PC can be perfectly adequate for a variety of tasks and for a variety of users. Further, reuse of these machines saves a significant amount of waste and recycling efforts. And finally, there are many situations where individual users and smaller organizations cannot afford the price of a new machine or replacement every 2-3 years as prices have increased over the past few years. This is true not only in the emerging world, but also in mature markets like the US, Europe and parts of APAC. Providing perfectly useful machines can do a great deal to helping in overcoming the digital divide.

Will users buy used machines?

But will users accept the notion of obtaining a recertified machine with 3 or more year’s old technology? It depends on the price. We surveyed a limited sample of business users to see if they would purchase a recertified PC, and if so, how much of a discount in price they would have to see to do so.

While the number of users that said they would never buy a recertified machine is not small at 22%, the majority of 78% indicated they would. But price would be an important issue for those buyers. 44% indicated they would if the price was 50% less than a new machine, while 30% indicated they would if the price was 35% less, and only 4% indicated they would if the price was 20% less.

We also asked how long business users typically keep their PCs.

Machine lifetimes of more than 3 years is the largest share at 50%, indicating a lengthening of the time users keep their PCs, and also indicative of the fact they are not shy about using older technology.

Bottom Line: There is clearly a market for recertified PCs, especially if the original manufacturer stands behind the warranty and makes them available through a quality distribution program. Many users do not really stress the processing capabilities of their machines with their daily workloads and don’t really need the latest generation of technology. They are keeping them in use longer indicating they are satisfied with previous generation technology. It seems logical then that for a significant reduction in purchase price, there is a healthy market for refurbished and recertified devices. We do not expect this type of program to significantly affect new machine volumes for PC vendors, but offers them an additional revenue opportunity, enhanced sustainability performance, as well as an opportunity to reach a different class of users. Organizations and individuals would do well to evaluate these offerings as a viable cost reduction strategy as well as a sustainability option.

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