The consumer electronics industry is notorious for environmental waste. Companies built their business models upon designing products that will not last and then encouraging consumers to replace them every couple of years.
Headphone maker Skullcandy is heading in the other direction.
The Park City-based company is designing its earbuds and headphones for the long haul with “Skull-iQ,” which includes hardware and components that can be “turned on” months or years later for additional audio features. With firmware updates, the regular wireless headphones you bought six months ago could suddenly get noise cancelation or trigger a number of various branded voice assistants.
“We’ve futureproofed them,” says Nelson Fortiér, Skullcandy’s VP of marketing. “We want to make our devices last longer—not just physically, but we want them to be relevant longer, too.”
That kind of sustainable design is unusual in consumer tech, which tends to build products with “planned obsolescence” in mind, meaning devices are not designed to last or work with future software. As a result, Americans spend an estimated $1,480 per household each year on new electronics, discarding 6.9 million tons of electronic waste (e-waste), according to a report by the Public Interest Research Group.
That’s a big problem for the environment. A 2019 World Economic Forum report called e-waste “the fastest-growing waste stream in the world.” Much of that waste is incinerated, dumped in landfills, or shipped to undeveloped countries, creating public health and environmental hazards. When that e-waste is exposed to heat, toxic chemicals are released into the air, damaging the atmosphere. Toxic elements like lead, mercury, and cadmium can leak into the groundwater, affecting the environment further.
Making new products is also an issue. There is the environmental cost of mining materials, the energy used to produce them, and the carbon emissions from transportation, marketing, and packaging. The manufacturing of three new laptops, for instance, emits 1 ton of CO2, according to data from the Geneva Environment Network, a cooperative of 75 environment organizations.
Large tech companies have made moves to source more sustainable materials and cut factory emissions. For instance, Apple reported that its assembly sites for its products are certified zero waste to landfill, and it has decreased average product energy use by 70 percent in the last 10 years. Google, however, began issuing detailed environmental impact reports for its devices in 2020 to educate consumers but also to rethink how some of those products are made. The company started using recycled materials in all consumer electronics products and plans to eliminate all plastics from its packaging by 2025.But there has been little innovation in designing products to last longer and resistance to efforts to make them more repairable, says Alex Lobos, professor of industrial design at the Rochester Institute of Technology in New York. “It might prevent them from keeping costs down and from having consumers replace products often,” he says.
Last year, President Biden signed an order that would require cell phone companies and tech companies to make available their proprietary software, repair manuals, tools, and other components so products can be repaired by anyone.
“It’s a good step, but there needs to be a way to make devices truly repairable,” Lobos says. For instance, most electronics and cell phones are made with glues and parts soldered together for cost efficiencies that are nearly impossible to take apart. More sustainable design, he says, may only happen with legislation.
Skullcandy changed the design of its headphones for different reasons: sustainability and product differentiation. When Skullcandy founder Rick Alden started the company on a Park City chairlift two decades ago, his startup was an innovator in the industry—among the first to put two speakers in each headphone cup.
But today, Skullcandy sits in a saturated $85 billion market in which earphones have become a commodity. Since its birth, the 300-employee company has worked to protect the earth and climate by choosing everything from vendors and plastic components to how materials are transported and how energy-efficient its new Park City headquarters would be.
Fortiér admits that Skullcandy is taking a risk in an industry designed around recurring revenue dependent on sales of the launch of newer models. Skullcandy, in essence, will eat into its own revenue stream, the size of which Fortiér declined to reveal. There is also the risk that the company ships out devices with extra parts that may or may not get used.
But the “land and expand” strategy is smart, says Urvashi Bhatnagar, author of “The Sustainability Scorecard: How to Implement and Profit from Unexpected Solutions.” Rather than continually “dating” customers with new products, Skullcandy is engaging consumers over a longer lifespan, allowing them to acquire a greater share of the consumer’s wallet. “Skullcandy is saving money in acquiring new customers,” she says.
On the upside, Skullcandy won’t have the added cost and time of designing, building, shipping, and marketing new products. And sustainable products are in high demand: As many as two-thirds of consumers say they want a business to take a stand on issues close to their hearts, according to a 2020 survey by Accenture. And another report by KPMG suggests that 90 percent of customers are willing to pay more for ethical retailers, 50 percent factor environmental and social practices into whether they make a purchase, and nearly 75 percent say they’ll leave a brand if they feel it puts profit over people. This is especially true for consumer electronics, in which consumer demand will continue to play a large role in forcing electronics firms to become more sustainable, Bhatnagar says.
Skullcandy’s own internal research found that about half of its customers go and buy new products because theirs weren’t working properly or didn’t have the longevity it once had. The other half bought new because they wanted more advanced audio. “A lot of times, people put those devices in a drawer, forget about them, and eventually throw them away,” Fortiér says, “but they’re perfectly good products and have a lot of life left in them.”Research has also found a connection between environmental design and loyalty, Lobos says. When consumers develop a bond with their products, they are more likely to keep them for longer and repair them rather than replace them, and that’s a huge win for sustainability. When they do replace it, they typically stay loyal to that brand.
Skull-iQ translates to consumers in a more general way, with packaging that promises the technology “enables your device to get smarter over time.”
To roll out the new features, Skullcandy partnered with Bragi, a software development platform for artificial intelligence and wireless audio features. One of the first projects Skull-iQ undertook was to send out upgrades that extend the battery life of its earbuds. “It’s not that drastic, but it has an improvement,” Fortiér says.
Potential features down the road may be more complex, such as gesture technology or active noise cancellation (ANC). The company must also adapt to a rapidly changing competitive landscape and changing consumer desires. Product developers check in with consumers every couple of months, and engineers dig deep for a 60-day development sprint. Product and marketing teams must then work closely to determine when to publish upgrades and alert consumers of the new features.
Engineers have also spent months trying to figure out how to launch upgrades within the Skullcandy app, which lets consumers control their headphones. You would think that would be simple, but most app architectures are fairly rigid, making it difficult to add extra lines of code to perform an extra function, Fortiér says. The team is trying to build a more dynamic app ecosystem to change and add new capabilities without breaking existing functionality.
Time will tell whether Skullcandy’s strategy works. Lobos says Skullcandy needs more than durable headphones; it needs new services, a loyal community, and lifestyle benefits. He points to the success of Patagonia, the leader in sustainable brands. The outdoor brand bought full-page ads in the New York Times telling people not to buy one of their products, encouraging them to repair old coats and clothes instead. The company has made it easy to send products in for repair, sometimes even returning a jacket with contrasting stitching to make hanging onto Patagonia garments even cooler. But it also created a marketplace platform where consumers could sell used Patagonia garb. “You can’t just do one thing,” Lobos says, “Otherwise, it’s a big risk.”