The market for used and refurbished smartphones has witnessed rapid growth over the past several years, thanks to a wide variety of trade-in and buyback programs across multiple channels and platforms.
In the US, most major carriers, retailers, and many online retailers (e-tailers) have implemented some type of trade-in strategy or platform to purchase used devices at a deep discount.
These types of programs have also appeared in Western Europe and Asia over the past three to five years. A new forecast from International Data Corporation (IDC) estimates that the market for used smartphones will grow from 81,3-million devices in 2015 to 222,6-million units in 2020, representing a compound annual growth rate (CAGR) of 22,3%.
“The demand for refurbished smartphones is already becoming constrained in countries such as the US,” says says Anthony Scarsella, research manager for IDC’s Mobile Phone programme. “Mobile operators are the most constrained given the need for replacement devices for customers who have purchased device insurance plans.
“In addition, used handsets provide an additional option for customers with subprime credit making them ineligible for equipment installment plans. With the average selling price for a used device expected to be $136 in 2020, the total market value for used devices in 2020 will be an estimated $30-billion.”
“The used smartphone market will impact OEMs, mobile operators, and component suppliers, thus IDC has committed new resources to help customers understand and plan for this new and potentially disruptive force,” says Will Stofega, program director, Mobile Phones at IDC. “Although there is a potential downside to mobile ecosystem suppliers, IDC believes that the used smartphone market also presents new opportunities to grow revenue and increase market share.”
According to IDC’s taxonomy, a refurbished smartphone is a device that has been used and disposed of at a collection point by its owner. Once the device has been examined and classified as suitable for refurbishment, it is sent off to facility for reconditioning and is eventually sold via a secondary market channel. A refurbished smartphone is not a “hand me down” or gained as the result of a person-to-person sale or trade.