Users now keep cellphones for 40+ months and it's hurting the secondhand market

Refresh rates stretched as consumers see no need to upgrade... or open wallets

Used and refurbished smartphones sales continue to expand by near-double digits but that rate is slowing as elongated refresh cycles for brand new handsets means fewer secondhand devices are becoming available.

Shipments swelled globally by an estimated 9.5 percent in 2023 to 309.4 million devices - which is still a growth rate that most of the major vendors of phones would have killed for, given the 3.2 percent decline in new handsets shipped last year.

Market watchers at IDC reckon the supply of used phones, refresh cycles that have "extended" and "macroeconomic challenges" hit demand for the latest devices. Sales out of older unit remains "healthy," forecast to grow by 8.8 percent on average between 2022 and 2027.

However, users are tending to sweat their smartphones past the 40 month period, according to the analyst's calculations, and this is starting to result in a shortage of inventory for resale on the secondary market. Trade-ins continue but comprise only a portion of the total used inventory.

As such, forecast growth rates are being clipped slightly. "Despite near ten percent growth, the secondhand market is showing signs of slowdown due to a genuine lack of inventory," said Anthony Scarsella, IDC research manager.

"With refresh rates extending in most mature markets, acquiring inventory remains the biggest challenge for resellers. Secondary phone retailers are hungry for inventory ass the high-end of the market continues to be scarce due to customers holding onto their devices."

He added: "This lengthening can also be witnessed in the new market where shipments declined 3.5 percent for 2023."

North America accounted for more than 26 percent of the global secondhand phone shipments, with everyone else clumped together in the Rest of the World section.

Given the number of smartphones that are binned daily - estimated to be hundreds of thousands is the US alone, according to US and Canadian non-profit Public Interest Research Group - it is small wonder that there aren’t enough used devices coming back onto the market.

According to research published by Canalys in 2022, high end devices are more likely to be reused, as most users said they were are more inclined to keep low or mid-range phones as a spare. It found that under 30s were more likely to be interested in purchasing a used or refurbished phone.

"So, it is likely the popularity of [those] devices will grow as the young generation grows older," the analyst said. ®

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