ReCellular Chief Sees Future for Yesterday’s Electronics

1/14/11

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operates at a loss, Manning says. Yet that is part of the game. A reason for people to send their phones to the company is to keep the devices out of landfills, where plastic pieces can leach gas and other toxic materials from the phones can pollute the environment.

Despite the company’s rapid growth, Manning says that it is just scratching the surface of the global supply of used cell phones. He estimates that Americans alone have roughly 700 million to 1 billion old phones stashed in drawers and closets. A part of the company’s strategy is to give people good reasons to recycle those used phones. ReCellular receives many of its phones from charities that get people to donate their cell phones to support specific causes.

The company is now searching for ways to increase its ability to collect phones in overseas markets, in part because about 60 percent of the phones it sells today go to customers in foreign countries. In Europe, Manning says, most of phones are made with the same technology that is required for the devices to operate in other foreign markets. Many phones sold in the U.S., however, are not built with that same technology, the CEO says.

ReCellular might expand its operations in places such as Europe through acquisition, Manning says. (The firm already has a facility just outside Hong Kong to help manage its global supply chain.) There’s also an opportunity for consolidation in the U.S. market, given that there are lots of small players in the industry here. The CEO didn’t discuss any specific plans for acquisitions, yet it’s something to watch at the firm.

The company has added some 30 employees since it announced its deal with Beringea in October, bringing its work force to about 310 people, according to Manning. Another piece of good news is that the CEO expects to match or improve the level of revenue growth the firm had last year. Manning says that the company is also interested in increasing its business through markets for gaming devices, tablet computers, and netbooks. Which means a whole bunch more 15-month-old devices could someday show up on ReCellular’s doorstep.

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