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EC disposal rules whack small PC builders

Gartner note

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In coming months, the member countries of the EU will enact waste disposal laws conforming with the European Commission's Waste from Electrical and Electronic (WEEE) directive.

The new regime, coupled with more disposal regulations coming down the line will hit smaller PC makers hardest, according to Gartner. Waste disposal will "raise production costs, reduce margins and accelerate consolidation among midtier and small European PC vendors".

Barriers to entry in the European PC market will be significantly raised, handing an advantage to the likes of HP, Dell, IBM, Apple and Sony which already have recycling and refurb programmes in place. This could have an effect upon US PC manufacturers which annually export up to $6bn in consumer electronics.
"If these manufacturers can’t — or won’t — comply with the directives, that export number could drop significantly," Gartner says.

Of course, they'll comply. And of course, the US will -footdragging state by footdragging state - eventually follow suit with producer pays waste disposal legislation. And of course, PC prices will eventually go up to pay for the additional cost. But who pays for waste disposal now? Overwhelmingly, it's the taxpayer mopping up the mess as obsolete computers are dumped into the municipal waste stream.

So no more subsidy for manufacturers and their customers - eventually. Producer pay comes in a year or two - after the WEEE legislation comes into force, during which taxpayers will face higher waste management costs.

So what about the poor little system builder. Gartner argues that companies will need sufficient scale to collect and dispose of waste cost-effectively.

We disagree: there are plenty of specialist waste disposal, or asset management companies, as they prefer to call themselves which will handle electronics disposal on behalf of manufacturers/ system builders. With WEEE rules in place, they might even make some money for a change.

Gartner's argument about scale reminds us of the
fuss when the EC enacted EMC (electro-magnetic compatibility) compliance laws. The burden was supposed to be so harsh that small system builders would go bust. Did they? Well yes they did, but not because of this. Instead, the component makers, such as Intel, did the EMC-compliance work for them.

About the WEEE Directive

Over a period of several years (the timetable depends upon the country), the EU intends to: a: remove as many 'obsolete' computers as possible from the municipal waste stream
b: dramatically improve recycling and refurbishment take-up
c: make producers/polluters pay for their safe disposal.

A second waste directive coming into force in 2008 will see more restrictive hazardous waste rules applied to "lead, mercury, and cadmium, as well as for chemicals such as flame retardants that show in circuit boards and plastic covers", Gartner says in its research note. Currently the lead in computer monitors is the only part of a PC which is classified as hazardous waste.

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