This is a short analysis of the official Fairphone 2024 impact report.
Fairphone is kinda cagey about how much money they exactly spend on fair/eco initiatives, giving only very little information on what exactly it spends in these departments.
For a good reason, it is not a lot.
Specifically, these numbers are given in the report for 2024:
- The workers assembling the phones get $1.20 of “living wage bonus” for each phone assembled. This bonus is spread over all workers in the factory, no matter if they worked on fairphones or not, coming out to a yearly bonus of $60.67 per worker.
- $3000 was spent on gold fairwashing credits for some artisanal gold mine in Tanzania
- $13000 was spent on fairwashing credits for 2.5 tonnes of cobalt (that’s 20% of the raw world market price of cobalt).
That’s everything. They do talk about a few other fair/eco initiatives in there, but if you read about what they are doing there, it’s usually very little and mostly marketing speech. We can safely assume that if any other initiatives would cost more than the ones mentioned above, they would have put these values into the impact report.
They sold 103 053 phones in 2024, so the credits mentioned above come out to just $0.155 per phone.
So to account for the rest of their initiatives and credits, let’s be ultra generous and assume they paid 10x of that for all of these initiatives and credits, bringing this value up to $1.55 per phone plus $1.20 in living wage bonus, which gives us a total of $2.75 per phone.
To double check how realistic these numbers are, lets look at their use of fair materials using the Fairphone 5 as our example.
On page 42 they claim “Fair materials: 76%”, but with the disclaimer “Average across 14 focus materials” next to it.
These 76% do not consider materials that are not “focus materials” (and aren’t acquired fairly at all) and it also doesn’t take into consideration the different distributions of the materials in the phone. Some materials (e.g. iridium) are only found in trace amounts in the phone, while other materials (e.g. aluminium or plastics) make up a large part of the weight of the phone.
On page 67 they go into more detail. Here they claim that only 44% of the materials by weight are “fair”. To make this even worse, 37% of these 44% are recycled. Specifically, the materials they use in recycled form are metals, plastics and rare earth elements. These are materials that are cheaper to recycle than to mine, which means these 37% of “fair” materials cost nothing to Fairphone and might even save them money. You will likely find similar shares of recycled materials in any other phone too.
Of the 7% “fair” materials that are left, only 1% is actually mined fairly, the remaining 6% are fairwashed using credits. As we have seen above, these credits are really cheap (adding maybe 20% to the price of the material).
On top of that comes the fact that the raw materials make up only a tiny fraction of the manufacturing cost of a smartphone. The expensive part is turning a pile of minerals, metals and plastic into chips, PCBs, screens, batteries and assembling all of that. So even if they paid fairwashing credits for all materials in the phone it would likely not cost more than a few dollars.
TLDR: Less than $5 per phone are spent on fair/eco.
So where does the money go? In 2024 they had an EBITDA of just €1 745 840, or €16.94 per phone. That’s not a lot at all, so it’s not like they are pocketing huge sums of money.
Their main problem is that they are a tiny company with low sales figures that has to outsource almost everything they do. On their website they claim to have “70+ employees”. That’s barely enough for supply chain management, sales and marketing. They don’t have an in-house production and likely not even in-house development. They don’t have any economies of scale on their side and they certainly don’t produce screens, batteries, chips or PCBs in house, like other major manufacturers like e.g. Samsung can do. Their development cost is spread over far fewer sold units.
All of this costs a lot of money.
So when you pay an extra €200-300 to buy a Fairphone instead of a comparable mainstream phone, you are mostly paying for a boutique manufacturing process that can’t benefit from economies of scale.
Which is ok, that’s nothing bad to do. Just be aware where that extra money is going.
Buying a Fairphone is hardly fairer than buying a regular phone and it is certainly not more eco friendly than buying an used phone.
I think you’ve tilted slightly too far towards cynicism here, though “it might not be as ‘fair’ as you think” is probably also still largely true for people that don’t look into it too hard. Part of my perspective is coming from this random video I watched not long ago which is basically an extended review of the Fairphone 5 that also looks at the “fair” aspect of things.
Misc points:
- In targeting Scope 2 emissions they went with renewables to get down to 0 Scope 2 emissions. (p13)
- In targeting Scope 3 emissions they rejigged their transportation a little (ocean freight instead of flying, it sounds like?) to reduce emissions there. (p14)
- In targeting Scope 3 emissions they used an unspecified level of renewable energy in late manufacturing with modest claimed emissions reductions. (p14)
- Retired some carbon credits, which, yes, are usually not as great as we would like, but still. (p14)
- They may have some impact by choice of supplier even when they don’t necessarily directly spend extra cash on e.g., higher worker payments.
- They may have some impact by engaging with suppliers. They provide small-scale examples of conducting worker satisfaction surveys via independent third party which seemed to provide some concrete improvements (p30) and “supporting” another supplier in “implementing best practices for a worker-management safety committee” (p30).
- They’re reducing exposure to hazardous chemicals in final assembly, and according to them they are “the first company to start eliminating CEPN’s second round priority chemicals” (p31). I don’t know much about this.
- With partners, they “organize school competitions in which children are educated about […] e-waste” (p40).
- They’re “building local recycling capacity” in Ghana by “collaborating” with recycling companies (p40).
- Extremely high repairability (with modest costs for replacement parts that make it financially sensible to repair instead of replace) keeps more phones in use, reducing all the bad parts of having to manufacture brand new phones.
- The ICs make up a huge portion of the environmental costs of the phone (both with the FP4 (pp 40-41) and with the FP5 (p10)), and Fairphone isn’t big enough to get behemoth chip manufacturers to change their processes (though apparently they’re lobbying Qualcomm for socketable designs, as unlikely as that is to happen any time soon). If you accept the premise that for around half of the phone they have almost no impact on in terms of the manufacturing side, it makes their efforts on the rest a bit better, I guess?
So yes, they are a long way from selling “100% fair” phones, but it seems like they’re inching the needle a bit more than your summary suggests, and that’s not nothing. It feels like you’ve skipped over lots of small-yet-positive things which are not simply “low economy of scale manufacturing” efforts.
I promise I’m not a shill. This seems relevant.
Liberux seem pretty transparent in everything they do. https://liberux.net/
Thanks for that. I had a discussion about it in another thread but without concrete numbers.
you are mostly paying for a boutique manufacturing process
You’re also in a way supporting an NGO lobbying for repairability and sustainability. We’ve seen progress on this front in EU and it’s possible Fairphone made some impact by showing what is technically achievable. It’s hard for Google to say that replaceable battery simply can’t be done when you have another company doing it.
Personally I find $300-$400 donation to be too much. If they would establish donations plan I would probably support them. I do donate to Signal from time to time and other OS projects regularly. But I’m happy that enough people are willing to donate to keep them going.
To me, the appeal of Fair phone has always been it’s repairability. And I think that they view the repairable aspect as a big part of their eco impact, as they intend for people to own their Fairphone for much longer and repair pieces as they need to be buying a new device entirely every 2-4 years.
Plus they’re helping continue to push EU regulations towards repairability. The premium going to that is fine by me
Well you also pay for repairability and theoretically software support, though they struggle in that regard, especially due to Broadcomm driver woes
This is absolutely correct.
I remember when they changed their messaging and openly admitted that their phone is not and can never be 100% “fair”, but that they’re trying their best. They were quite open about it. Even so, the factual fairness I read then read better than what you present now.
To be fair (haha, pun intended) their phones are also about modularity.
So where does the money go?
Almost* every alternative hardware company asks much more for a (hardware wise comparable) product for a whole slew of reasons; “Fairness” rarely plays into it.
In other words, even if the Fairphone wouldn’t claim to be fair, it would cost just as much.
And, to be fair again, the Fairphone is still cheaper than some of its competitors.
* except Pine64 it seems. (also somewhat modular btw)
- except Pine64 it seems. (also somewhat modular btw)
Pinephone does not have lock-able bootloders. Meaning less security. In contrast I can install Calyx OS on a Fairphone, Re-Lock the bootloader, and its secure and private.
Yeah, my issue with Fairphone’s branding/marketing/reputation here is that I know a lot of people who buy a fairphone because they want to save the planet, and that’s really not what this phone is doing.
Almost* every alternative hardware company asks much more for a (hardware wise comparable) product for a whole slew of reasons; “Fairness” rarely plays into it.
In other words, even if the Fairphone wouldn’t claim to be fair, it would cost just as much.
This is exactly it. Running a tiny company with nothing in-house making a custom phone with custom hardware is expensive.
To be fair (haha, pun intended) their phones are also about modularity.
That’s where the whole concept falls apart for me. I own my phones for a long time, and battery longevity has gotten much better in the last 1-2 decades. If you own a phone for 5-7 years, you will likely need to replace the battery one, or at most two times. Even if in the worst case this is going to cost you at max maybe €135 per swap (that’s what Apple charges for a battery swap on their most expensive phone). On a cheaper phone using 3rd party repair shops we are talking about less than half of that.
I’ve never destroyed a screen before, but some people do, and also then you’ll likely pay maybe €150-200 for a phone in the same range as the FP5. Now consider that Fairphone spare parts really aren’t cheap. They want €40 (plus shipping) for the battery and €100 (plus shipping) for the display for an FP5, so you aren’t saving that much on DIY repairs with the Fairphone.
Now consider that buying a mainstream phone comparable to a Fairphone is usually ~€300 cheaper, and the calculation completely breaks down. And it becomes even worse if you never destroy the screen.
A repairable phone is the most important thing. I could buy a used flagship, but the battery will be trashed. I used to buy a phone every 2 years but now I just buy a battery every 2 years. I can use my phone knowing that if anything breaks I can have a replacement part in within a week, and I don’t have to spend 100€s to ship it to some repair shop in a different part of the country.
Fairphone 4 and 5 are also the only smartphones certified by the Swedish unions: https://tcocertified.com/product-finder/index?category=Smartphones
I mean, i do that too. Battery & Display for
- Galaxy S3: (still) no problem
- Poco F1: no problem
- Oneplus 9: there are now two incompatible variants of battery
Btw: all of them have official LineageOS support.
Of course, be careful with “original” batteries with only 50% capacity.
On non-Fairphones, which tend to have larger batteries and lower power consumption batteries tend to be usable for much longer. We are talking 3-5 years there.
So what’s the better deal? Get the battery replaced once in the phone’s lifetime at a local 3rd party repair shop for €100, wait for half an hour and get your phone back, or pay €200-300 extra for the privilege of a phone where you only pay €40+shipping for the battery, if you are lucky enough and they still have them in stock when your battery dies?
(Fairphone tends to have availability issues with spare parts. For example, right now the FP5 battery is out of stock.)
On non-Fairphones, which tend to have larger batteries and lower power consumption batteries tend to be usable for much longer. We are talking 3-5 years there.
No way.
Get the battery replaced once in the phone’s lifetime at a local 3rd party repair shop for €100 wait for half an hour and get your phone back.
These shops only service iPhones and Samsungs, there’s only like 1-2 shops in Stockholm that repair Pixels and Xiaomis at all, let alone whatever 3 year old model you have. Not to mention things like screen and USB port repairs cost 100-200€ more than the fairphone parts.
(Fairphone tends to have availability issues with spare parts. For example, right now the FP5 battery is out of stock.)
I’ve had to wait a month for a fairphone battery before, but it’s not like they’re discontinued. I can imagine battery warehousing costs more than screens and USB ports.
Damn.
What’s their margin? Are they profitable?
So where does the money go? In 2024 they had an EBITDA of just €1 745 840, or €16.94 per phone. That’s not a lot at all, so it’s not like they are pocketing huge sums of money.
Yes, they are profitable, though barely so. Then again, their profits per device is much much more than what they pay for fairness.
