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This is repulsive. Promoting waste and destruction when there are many better ways to deal with a phone you don't want or need anymore.

http://www.phones4charity.org/

http://www.ncadv.org/takeaction/DonateaPhone.php

http://www.cellphonesforsoldiers.com/

Thank you! I had the exact same reaction when a coworker told me about this. There are millions of people who would take your old phone off your hands.
If you actually watch the video, it isn't exactly encouraging you to smash your phone, it is just using it as a metaphor to move on to new technology. I'm sure they would love you to donate your old phone to one of these charitable organizations.
If you actually read the contest, 100 people will receive phones in exchange for destroying their current ones.
And if you look at the form, it has a field "Destruction method", for which the example text is "Hammer / Baseball bat / Screwdriver / Fire / Blender / etc."
About 30,000 to 40,000 cell phones weigh about one tonne. That yeilds about one kg of gold. There are other materials that are recovered - paladium; silver. (I'd guess the copper is worth something too? Not sure how easy that is to get out after you've got the other stuff).

That doesn't have much to do with this contest I guess.

The actual number of phones to be smashed is probably statistically insignificant compared to the number dropped and broken each day - I suspect there are more than 100 dropped/cracked/unusable phones daily here in the Chicago area.

The bigger issue for me is that this is effectively really only available to people who either have another phone available for use or who can do without a phone for several days ("After your submission has been reviewed and accepted, you should have your new OnePlus One in approximately 48 hours." but there's nothing about how long they're going to take to review submitted videos).

They also want to be sure you're not smashing an older phone - they have a fairly limited list which looks like it's all current high-tier phones, so if you're using a slightly older one (e.g. Nexus 4, HTC Amaze) it's not listed. I'm not familiar with all the phones on their list, so this may also be related to screen size - only larger phones need apply since the OnePlus One is a phablet?

They list Galaxy S3, which is about the same size as, similar horsepower to, and IIRC older than the Nexus 4, yet N4 is not listed.
I don't think it's even related to screen size. They are all quite recent high-end smartphones. Phones that could still be useful to a lot of people.

This is just dumb marketing at its worst.