Fairphone has published a cost breakdown for the Fairphone 2, sharing detailed information about how the social enterprise calculated the retail price of its latest smartphone.
The infographic shows consumers the true cost of creating a mobile phone, including taxes, production, investments and operations.
Fairphone 2 – the social enterprise’s upcoming phone is another step towards fairer electronics
With a modular design that improves the phone’s longevity and repairability, the Fairphone 2 was designed to expand on the organisation’s ambitions for fair electronics.
Like the first Fairphone, the new phone is being sold using a pre-order model to ensure that the organisation can operate without external investment.
Fairphone aims to sell 15,000 phones by the end of September to kick-start production of the Fairphone 2. To date, over 10,000 phones have already been purchased by Fairphone supporters.
Transparency is one of the guiding principles behind Fairphone’s philosophy for more responsible consumer electronics. In addition to increasing traceability and working to improve industry practices, the organisation wants to give consumers greater insight into its business model, including what it costs to make, sell and service a phone.
The average consumer price of the Fairphone 2 is €525, based on 20% VAT. The cost breakdown visualises all of the expenses related to the design and engineering of a smartphone, as well as Fairphone’s investments in social and environmental programs.
Based on an average production volume of 140,000 phones per year, it includes both fixed costs (like certifications) as well as estimates that may change over time. As the document remains a projection, it should be viewed as an exercise in transparency and not an official accounting report.
Taxes and reseller discounts
For each phone sold, €118 goes to taxes such as VAT, levies like WEEE (a European Community electronics recycling directive) and discounts for reseller partners. That means Fairphone retains €407 of the total sales price to cover the creation of the phone, investments and operations.