1. Brand Return Share Workshop October 17, 2006 National Center for Electronics Recycling

2. Workshop Overview Brand/Orphan/White Box Definitions Brand/Orphan/White Box Definitions –Effects in current systems NCER Brand Data Management System NCER Brand Data Management System Brand Recording Brand Recording –Misidentified, Examples Return Share Reports Return Share Reports –Assumptions/Calculations –Comparison to Market Share –Company Examples Playing with the Data Playing with the Data –Participant Suggestions

3. National Center for Electronics Recycling Mission: dedicated to the development and enhancement of a national infrastructure for the recycling of used electronics in the U.S. through 1) the coordination of initiatives targeting the recycling of used electronics in the United States, 2) participation in pilot projects to advance and encourage electronics recycling, and 3) the development of programs that reduce the burden of government through private management of electronics recycling systems. Mission: dedicated to the development and enhancement of a national infrastructure for the recycling of used electronics in the U.S. through 1) the coordination of initiatives targeting the recycling of used electronics in the United States, 2) participation in pilot projects to advance and encourage electronics recycling, and 3) the development of programs that reduce the burden of government through private management of electronics recycling systems. Non-profit 501c3 Non-profit 501c3 Located in Region III Located in Region III –Parkersburg, WV area (Davisville) –Polymer Tech Park, owned by PAZ, also Amandi operation

4. What is a “Brand?” “A name given to a product or service ” according to LaborLawTalk.com “A name given to a product or service ” according to LaborLawTalk.com Most large producers use same name for brand Most large producers use same name for brand –I.e. HP-HP, Sony-Sony But, brand name can differ from producer name But, brand name can differ from producer name –Retailers brand differently, i.e. Walmart-ilo

5. What is THE “Brand?” for Electronics Recycling Purposes Same product may include multiple “brand” markings Same product may include multiple “brand” markings –Are true brands, but not correct brand for assignment of responsibility Correct brands to record depends on program, purpose of brand recording Correct brands to record depends on program, purpose of brand recording In Maine, correct is brand one that is registered to a claiming “manufacturer” In Maine, correct is brand one that is registered to a claiming “manufacturer” In Washington, brand ownership determines responsibility assignment In Washington, brand ownership determines responsibility assignment

6. Brand/Producer Differences Difference between brand “licensor” and brand “licensee” Difference between brand “licensor” and brand “licensee” –No central registry of either! Different physical manufacturer (e.g., contract manufacturing) Different physical manufacturer (e.g., contract manufacturing) The producer of the product may license a legacy brand name (e.g., RCA, IBM) The producer of the product may license a legacy brand name (e.g., RCA, IBM) –“Back from the Dead” brands – Polaroid, Westinghouse A single producer often owns multiple brands A single producer often owns multiple brands –Panasonic has Panasonic, Quasar*, Technics A single brand may be produced by more than one company A single brand may be produced by more than one company –Historically: GE formerly by GE, then Thomson, now TTE –Concurrently: Funai for “Magnavox” TV/VCR/DVD combos, Philips for all other “Magnavox”

7. What are “Orphans?” Statutory, legislative definitions Statutory, legislative definitions –Usually a waste for which a manufacturer can not be identified or waste for which its manufacturer is no longer in business NCER definitions NCER definitions –“True” orphans, where the producer has gone out of business and the regulator has determined that there is no successor –“Non-compliant” orphans where the producer is still in business but elects not to comply with the requirements –“Disputed brand” orphans where the producer disputes responsibility for one of many reasons –“De minimis” orphans of one-off brands from producers that may still exist but are extremely difficult to find

8. 6.68% monitor share (#4 in BDMS) 7.06% desktop share (#6) Orphan Brand (Maine)

9. What are “White Box” Products Usually orphans, but not necessarily Usually orphans, but not necessarily May carry a brand, a customer-specific brand, no brand May carry a brand, a customer-specific brand, no brand Definition is evolving Definition is evolving –Usually products with a no-name brand from a non-major vendor by an assembler, or a custom-built computer with name-brand internal components –Other terms for white box manufacturer: “Value-added Reseller”, “System Builder” Defined statutorily for the first time in new Washington State legislation: Defined statutorily for the first time in new Washington State legislation: –“a person who manufactured unbranded covered electronic products offered for sale in the state within ten years prior to a program year for televisions or within five years prior to a program year for desktop computers, laptop or portable computers, or computer monitors.”

10. ”Unknown” White Box Also Orphan 16.18 % return share desktops (#1! In BDMS) 4.44% return share laptops (#6) 2.42% return share TVs (#16) 2.1% return share monitors (#14)

11. White Box This brand not in BDMS before WV brand count 55 “new” desktop brands of 157 total brands (all 3 or fewer units of 1195 desktop units)

12. Brand/Orphan Roles in Existing Systems California ARF System: California ARF System: –No brand or orphan provisions, collected products recycled regardless of brand Maine PR System: Maine PR System: –Strong brand and orphan component Brand count by consolidators, manufacturers billed for their returns Brand count by consolidators, manufacturers billed for their returns DEP required to ID orphans, manufacturers billed for orphan “pro rata share” DEP required to ID orphans, manufacturers billed for orphan “pro rata share”

13. Brand/Orphan in Existing Systems Maryland Manufacturer Reg Fee System: Maryland Manufacturer Reg Fee System: –No orphan provision, no assignment of responsibility at time of recycling –Brands selling into state are required to register, pay $ Washington State Washington State –System financial responsibility allocated by brand –Orphans financed by compliant manufacturers, but only one explicit orphan requirement in the statute: “April 1, 2010, the department shall provide a report to the appropriate committees of the legislature regarding the amount of orphan products collected as a percent of the total amount of covered electronic products collected.”

14. White Boxes in Existing Systems California ARF System: California ARF System: –No definition, but brand label required, and all sellers must collect fee However, desktops not covered, only laptops/monitors for WB However, desktops not covered, only laptops/monitors for WB Maine PR System: Maine PR System: –Brand label required for covered products and desktops, WB laptop/monitor makers must file plan and be responsible for returns + orphans

15. White Boxes in MD and WA Maryland Manufacturer Reg Fee System: Maryland Manufacturer Reg Fee System: –Covers desktop computers, if WB manufacturers makes > 1000/year, registration required, brand label required Washington State defines white box manufacturer, limits their ability for individual plan Washington State defines white box manufacturer, limits their ability for individual plan Washington State calculation of “return” share % to exclude non-claimed brands (including orphans, others?) Washington State calculation of “return” share % to exclude non-claimed brands (including orphans, others?) –Translates into poundage requirement for “equivalent” shares of each manufacturer once annual collection amounts are known

16. Summary of NCER Orphan-White Box Research NCER Report on Orphan/White Box NCER Report on Orphan/White Box –Found regional differences in brand return shares Apple monitors: 4.9%, 11.6% and 18.8% in 3 studies Apple monitors: 4.9%, 11.6% and 18.8% in 3 studies –Variations in sample sizes exacerbate regional differences –Compiling unit totals skews towards largest study (Hennepin County) –Published at IEEE 2006 conference –Published known % of orphan as of early 2006

17. Research Results: Determining Orphans Orphan research led to conclusion: Orphan research led to conclusion: –Not an orphan unless determined (by govt) Need official records, some judgment calls Need official records, some judgment calls Many smaller brands – lot of effort for little return Many smaller brands – lot of effort for little return –Especially monitors, desktops “de minimis” shares in Maine “de minimis” shares in Maine –If manufacturer has less than 1% return share, no pro rata share (i.e. orphan) needed

18. Maine DEP Orphan Determinations If brand identified at a consolidator is not claimed, ME DEP follows this process If brand identified at a consolidator is not claimed, ME DEP follows this process –Search US Patent Office database Can get orphan status there, or further research Can get orphan status there, or further research –Search other Business Directories/Databases i.e. “Brands and Their Companies” i.e. “Brands and Their Companies” Orion Blue Book Orion Blue Book –If no info, general web search –Still no info, DEP works with AG office to assign orphan status Could be mis-identified Could be mis-identified

19. Brand Data Management System

20. Created BDMS to track return share and claims in different states Created BDMS to track return share and claims in different states Sources: Sources: Florida Brand Count 04-05Florida Brand Count 04-05 Staples Northeast 2004Staples Northeast 2004 Hennepin County 2004Hennepin County 2004 Good Guys NW 2004 (TVs only)Good Guys NW 2004 (TVs only) NEW- WV collection events 2006NEW- WV collection events 2006 Forthcoming – Maine Jan-Oct 06Forthcoming – Maine Jan-Oct 06 Shows calculated Brand Return shares by Product Type and also the total number of Brands represented in each Product Category (e.g. 661 Desktop brands).

22. BDMS Outputs Return Share by Product Category Return Share by Product Category Return Share Across All Products Return Share Across All Products Official Brand Claims/Status Official Brand Claims/Status –Data from Maine (no desktops), Maryland (no TVs) –Washington in future Combined manufacturer share for claimed brands Combined manufacturer share for claimed brands

24. Percent of Brand Returns in BDMS Included on Official State Reg. Lists Maine official designations are: Maine official designations are: –Claimed –Orphan –Misidentified –Blank/Still Researching % of BDMS brand returns officially designated by Maine DEP as of the end of August, 2006 % of BDMS brand returns officially designated by Maine DEP as of the end of August, 2006 –95% (Monitors) Another 2% are in the BDMS as “unknown” (no brand) Another 2% are in the BDMS as “unknown” (no brand) –94% (TVs) Another 2% are in the BDMS as “unknown” (no brand) Another 2% are in the BDMS as “unknown” (no brand)

25. Brand Returns in BDMS By Maine Designation Type 281 Brands Claimed 281 Brands Claimed 132 Designated Orphans 132 Designated Orphans 80 Misidentified “brands” 80 Misidentified “brands” 9 “Not officially claimed” brands 9 “Not officially claimed” brands 587 “Still Researching” 587 “Still Researching”

26. Brand Returns in BDMS By Maine Designation Type Within the 95% of BDMS monitor returns with an official Maine designation: Within the 95% of BDMS monitor returns with an official Maine designation: –Claimed (79%) –Orphan (11%) –Misidentified (<1%) –Blank/Still Researching (4%) Within the 94% of BDMS television returns with an official Maine designation: Within the 94% of BDMS television returns with an official Maine designation: –Claimed (88%) –Orphan (4%) –Misidentified (<1%) –Blank/Still Researching (2%)

29. Brand Recording Best Practices and Common Errors

30. Brand Recording Not as simple as looking and writing down Not as simple as looking and writing down NCER developed Best Mgmt Practices NCER developed Best Mgmt Practices –Reduce errors, guide for brand recorders Steps detailed for brand recorder Steps detailed for brand recorder –Know units of measure, product categories –Distinguish product categories – gray area –Finding true “brand” label –Identifies common mis-identified markings –Tips for calculating shares

31. Worst Misidentifications 3MTV Cow Radiation UL Energy Low Radiation VLMFCRT VGA

32. Brand “Aliases” Spelling errors have consequences! Spelling errors have consequences! –Proton different than Protron –J.C. Penney vs JC Penney vs JCPenney –Samyo vs Sanyo –The extra consonants: Phillips, Cannon, Thompson Secondary brands recorded as brands Secondary brands recorded as brands –Apple vs Macintosh vs iMac … –Presario/Compaq –Satellite/Toshiba –But not “Trinitron” for Sony!

33. Brand Recording Pitfalls Candidate for misidentification “Creative”: drive, not brand “Personal Computer”: not brand, but IBM trademark The BRAND! “CCI”

34. Monitor, no label on front Manufacturer here: Sceptre Technologies

35. Could be recorded as: Multi-MediaMulti-Media Legend 2000Legend 2000 Intel/Intel InsideIntel/Intel Inside Packard Bell *Packard Bell *

36. RCA on front, but not enough info for ME program on back

37. “View and View” on front, needed to verify on back

38. Bare tube from residential collection; “Zenith” on tube label, but is it the “brand”?

39. Return Share Calculations

40. 2 Methods for Calculation: 1 st Method 2 Methods for Calculation: 1 st Method Total Units / Return Share Calculation Total Units / Return Share Calculation –Add up all units for a brand across all regional programs where brands were counted, then divide the total number of units collected nationwide by the total number of brand units. –All units equal, regardless of sample size or location –For brands that show significant regional variation in return shares, this method may over - or underestimate return share due to a larger brand counting program in one region compared with another program.

41. Return Share Calculations 2 Methods for Calculation: 2 nd Method 2 Methods for Calculation: 2 nd Method Average Reported Return Share Average Reported Return Share –This method takes the return share for each brand calculated by individual collection programs where brands were counted, then averages the program- specific return shares to estimate the brand’s national return share. –Removes skewing of any regional difference due to the size of the program, but can magnify abnormally high or low return shares in smaller programs.

42. Return Share Calculations Examples of differences in the two methods Examples of differences in the two methods Brand Total Unit Program Average Apple - Monitor 10.43%12.21% Unknown – monitor 1.87%4.26% RCA –TV 12.6%13.41% Dell – laptop 11.8%16.45%

43. The “Equivalent Share” Concept Usually return share among compliant manufacturers Usually return share among compliant manufacturers –Distributes costs of unclaimed brands across companies claiming brands Washington State definition of equivalent share Washington State definition of equivalent share –“the weight in pounds of covered electronic products identified for an individual manufacturer under this chapter as determined by the department under section 20 of this act,” basically: Numerator is return share among compliant manufacturers Numerator is return share among compliant manufacturers Denominator is the total pounds collected by all compliant manufacturers during the “previous program year” Denominator is the total pounds collected by all compliant manufacturers during the “previous program year”

44. Washington “Equivalent Share” Examined Washington’s program combines weights for all 4 product categories to determine return share Washington’s program combines weights for all 4 product categories to determine return share –The next slides show a calculation of the top 10 brands from older, 2004-only BDMS data The list does not include the “unknown” brand returns that totaled about 4% of the return share by weight across all 4 product types The list does not include the “unknown” brand returns that totaled about 4% of the return share by weight across all 4 product types Note that the “Brand Return Share” is not “Equivalent Share” since it includes the unclaimed Note that the “Brand Return Share” is not “Equivalent Share” since it includes the unclaimed

45. Washington “Equivalent Share” Examined (cont)

47. “If my company’s BDMS return share is 5%, what will my equivalent share be in Washington State?” “If my company’s BDMS return share is 5%, what will my equivalent share be in Washington State?” –The actual number in pounds will not be known until summer 2010 (sorry!), but…. –We’ll take a SWAG at it…..

48. Washington “Equivalent Share” Examined (cont) “If my company’s cross-product BDMS return share is 5%, what will my equivalent share be in Washington State?” “If my company’s cross-product BDMS return share is 5%, what will my equivalent share be in Washington State?” –Could be projected by calculating probable “compliant share” across all 4 product categories 90% of television returns will be claimed 90% of television returns will be claimed 80% of monitor returns will be claimed 80% of monitor returns will be claimed 65% of all desktop returns wll be claimed (????) 65% of all desktop returns wll be claimed (????) 80% of all laptop returns will be claimed (less important) 80% of all laptop returns will be claimed (less important) …..so about 80% of all returns by weight will be claimed by a compliant manufacturer …..so about 80% of all returns by weight will be claimed by a compliant manufacturer –So that company’s 5% “return share” becomes 6.25% (not 6%)

49. Washington “Equivalent Share” Examined (cont) “If my company’s cross-product BDMS return share is 5%, what will my equivalent share be in Washington State?” “If my company’s cross-product BDMS return share is 5%, what will my equivalent share be in Washington State?” –Assume about 2 lbs/capita collected in first year –Equivalent Share: 750,000 lbs. –Assume cost of 45 cents/lb. collected –Total projected year 1 cost: $337,500

50. Comparisons with Market Share

51. FL TVs Market vs Return Share from 2005 % Sold based on iSuppli (El Segundo, CA) report to FDEP, 10/24/05

52. FL Data Monitors : Return Share v Market Share % Sold based on iSuppli (El Segundo, CA) report to FDEP, 10/24/05

53. Computers – Desktop, Laptop: Consumer, Small Business, Small Office Market BrandReturn ShareMarket ShareRank Return Rank Market Dell9.6%28.1%31 HP4.8% *20.8%82 Gateway5.8%8.8%73 Toshiba0.8%5.0%134 Apple8.5%4.0%45 Sony0.7%2.0%196 Lenovo7.6% (IBM)1.2%57 Acer1.5%1.2%108 AvertecN/A0.6%N/A9 MicroelectronicsN/A0.4%N/A Market Share Source: IDC via FL DEP Market Share vs Return Share for Computers (Desktop + Laptop)

54. Printers: Sales (US) Consumer, Small Business, Small Office Market Compared with Collected for Recycling (FL) (Percentages based on number of units sold or collected) Units Sold Source: IDC Product Sales 2005 (US)Products Collected 2005 (FL) (n = 12,934,024)(n = 1,705) Vendor Percent Brand Name HP36.3%43.0%HP Dell18.3%12.1%Epson Lexmark17.3%10.3%Canon 12.0%8.8%Lexmark Epson9.9%4.3%Panasonic Konica Minolta2.0%4.2%Okidata Samsung1.7%4.0%Compaq Brother1.3%2.2%Apple OKI0.6%2.2%Brother Xerox0.2%2.2%IBM Others0.5%6.7%Others Total100.0%

56. Thank You! Jason Linnell NCER Phone: (304) 699-1008 jlinnell@electronicsrecycling.org