Second-hand and refurbished phone market takes flight amid inflation hike
Who needs shiny new blowers when there's bills to pay and kids to feed? Answer: fewer and fewer folk
More and more cash-strapped people are opting to buy second hand and refurbished handsets in these tougher economic times with sales of used and refurbished devices estimated to have passed 282 million in 2022.
The unit growth for those 12 months is some 11.5 percent higher than the prior year, and IDC number-crunchers have calculated compound annual growth of 10.3 percent until 2026 when shipments are forecast to reach 413.3 million.
Anthony Scarsella, research manager with IDC’s Worldwide Quarterly Phone Tracker, said the used market grew off the back of a 6.1 percent rebound in sales of new phones in 2021.
"Used devices demonstrate more resilience to market inhibitors than new smartphone sales as consumer appetite remains elevated in many regions," he said.
"Attractive price points are critical for growth as cost savings remain the primary benefit," Scarsella added. "However, a high-end inventory struggle due to elongated refresh cycles in the new market has used prices growing 11 percent in 2022."
North America was calculated to have shipped 73.5 million smartphones last year with the other 209.1 million devices sold into channels across the rest of the globe.
Trade-in programs continue to be the major catalyst for both new and used phone sales via telco and retail sales channels, speeding up refresh cycles in the US, Canada and Western Europe. Higher sales of more premium phones last year has also created a circular effect, as trade-ins feature mostly on their tier of device.
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IDC said that how long these “aggressive” trade-in offers last will be a “big question for buyers and sellers.” It warns that narrow margin on these used and refurbished phones will, ultimately, dent the profitability of the vendors and resellers flogging them.
The backdrop to this is rising inflation and a looming global recession which has meant that many consumers and businesses are less cash-rich than they were at any point in recent years.
The new smartphone market has shrunk for five consecutive quarters up to and including calendar Q3 in 2022. The economics of buying a new phone simply don't stack up for many people.
The silver lining to the expansion of the used phone market is perhaps environmental benefit: in the US alone, hundreds of thousands of smartphones are binned each day, so expanding the life of these devices can only be seen as a positive move.
This might be helped by a Right To Repair movement… if only everyone could get behind the legislation as it was intended. ®