Modular Upgradability in Consumer Electronics: Economic and Environmental Implications

Abstract

SummaryModularly upgradable product designs have been advocated to offer environmental and economic advantages; however, they are not commonly used in the consumer electronics industry. In this article, we investigate the economic and environmental benefits and challenges of modular upgradability for consumer electronics. From an economic point of view, we posit that the limited adoption of modular upgradability in consumer electronics is owing to various demand-, technology-, and competition-related issues. From an environmental point of view, we posit that modularly upgradable product designs may not necessarily lead to superior environmental outcomes. To reach meaningful conclusions regarding the environmental benefits of modular upgradability, one needs to understand how product architecture affects demand, production, and consumption patterns, which arise from endogenous consumer and manufacturer choices. It is also important to take into account that modular upgradability may have potentially differentiated effects in the production, consumption, and postuse phases of the lifecycle.

Can smart factories bring environmental benefits to their products?: A case study of household refrigerators

“…This exemplifies the speculated environmental benefits of smart factories as a more efficient manufacturing paradigm (Radziwon et al, 2014). Specifically, the manufacturing processes of outsourced modules at suppliers also show higher energy efficiency, compared with corresponding manufacturing processes in Haier (see Tables S7 and S8 is not in the "optimal" state from the view of procurement, as it may not necessarily lead to superior environmental performance (Agrawal, Atasu, & Ülkü, 2016;Yang, Yu, & Jiang, 2014). For the refrigerator delivery, the values of all categories are increased by about 4.00%, which can be attributed to the increased transportation mileages, because each refrigerator is supposed to be delivered to its customer directly.…”

“…The increases of the values of most impact categories are about 12.70%. Notably, the current product modularity is not in the “optimal” state from the view of procurement, as it may not necessarily lead to superior environmental performance (Agrawal, Atasu, & Ülkü, ; Yang, Yu, & Jiang, ). For the refrigerator delivery, the values of all categories are increased by about 4.00%, which can be attributed to the increased transportation mileages, because each refrigerator is supposed to be delivered to its customer directly.…”

What circular economy measures fit what kind of product?

“…More durable products may require more and/or higher quality material and for active products the use life efficiency versus benefits of use extension comes into play. There is also a risk that products with a modular design are needlessly upgraded (Agrawal et al, 2016).…”

What Affects the Secondhand Value of Smartphones: Evidence from eBay

“…Bellezza et al (2017) found that consumers are more careless with their possessions if they know an upgrade is available. Relatedly, the limited market success of modular phones or phones that are specifically optimized to allow unlimited repair and upgrades (e.g., Fairphone) challenges the notion that repairability is a highly sought-after feature in smartphones (Lowe 2016;Agrawal et al 2016;Hill 2017). Thus, despite growing advocacy and pending legislation affirming consumers' "right to repair" (The Repair Association 2017; Koebler 2017; Bloomberg 2017), it remains unclear whether consumers truly value the ability to repair and upgrade devices and to what extent such enhanced functional durability (defined here as the duration of time products remain functionally up to date) extends the use phase in smartphones.…”