HP expands the PC trash-to-cash market

Computerworld - There are many ways to get rid of your personal PC. You can throw it in the basement or a closet, drop it off at the local recycling center or advertise it on Craigslist. And now you sell it to Hewlett-Packard Co.

HP this month, without much fanfare, began offering cash for old PCs and other consumer equipment from just about any maker, including its rivals. If HP determines that your old equipment has some value left, the vendor will mail you a check for it.

Users, both businesses and consumers, have been putting off PC upgrades because of the sluggish economy. In response, vendors are expanding financing options for businesses. HP last month offered zero percent financing to businesses, and now the vendor is apparently trying to give consumers a reason to upgrade as well.

On its Web site, HP has developed an interface for determining the value of products, including printers, digital cameras and smart phones. Users enter the manufacturer, model and basic configuration of the equipment. The product must be in working condition. If there is no value to the product, HP will recycle it.

Using HP's guidelines, the user has to decide whether a notebook, for instance, is in excellent, good or poor condition. Cosmetic appearance is paramount in determining condition. In the poor category is this reporter's several-year-old, travel-damaged IBM ThinkPad T43, which also has a tiny crack. It was valued at $12.82 by HP's online estimating tool. It would have been $111 in good condition and $132.50 in excellent, unblemished condition.

Meanwhile, IBM, on its Web site, sells a refurbished T43 with roughly the same configuration, for just over $500, although that model was temporarily out of stock.

Businesses have long been able to trade up old equipment as part of leases or other incentives offered by vendors. And consumers have long been offered equipment take-back programs as part of recycling efforts. But cash-back programs aimed at consumers, as this HP program is, are still relatively rare, said David Dauod, an analyst at IDC.

Dauod said sources of used equipment are shrinking because businesses, in particular, are retaining their equipment for longer periods. Meanwhile, demand for used equipment is also on the increase because of the economy, he said. "Clearly, there is a huge worry among the vendor communities that these products are drying up," he said.

Consumers have not been a target for cash-back programs because they "typically tend to keep their systems forever," Dauod said.

Consumers can also shop around for the best deal. Dell Inc. has a cash-back program but provides the money in the form of a Dell gift card. Dell, too, uses an online interface; it valued the same model T43 IBM notebook at $61 if it was in good condition.

Bob Houghton, the CEO of Redemtech Inc., an IT asset recovery company in Columbus, Ohio, said the economy is prompting users to hold on to equipment longer, while also stimulating demand for used equipment.

"There is no question that capital spending and equipment refresh has been curtailed as a result of the economy," said Houghton said. "We have seen people slowing down their refreshes, extending their life cycles and reusing equipment rather than buying new."

Read more about Hardware in Computerworld's Hardware Topic Center.