Market for refurbished smartphones to hit 120m units
A survey of U.S. and German consumers by Gartner found that 60 per cent of consumers are replacing their smartphones because they are interested in additional functionality, or they “just want” a new device.
Consequently, the worldwide market for refurbished phones that are sold to end users will grow to 120 million units by 2017, with an equivalent wholesale revenue of around $14 billion. This is up from 56 million units in 2014, with an equivalent wholesale revenue of $7 billion.
The survey, which was conducted in June 2014, surveyed more than 5,600 U.S. and German consumers about their technology usage and attitudes in order to gain a better picture of how devices are used for work and leisure.
According to the Principal Research Analyst at Gartner, Meike Escherish, “with consumers in mature markets upgrading their smartphones every 18 to 20 months the inevitable question is what happens to the old device?”
“While only seven percent of smartphones end up in official recycling programs, 64 percent get a second lease of life with 23 percent being handed down to other users and 41 percent being traded in or sold privately.”
“This rise in smartphone reuse will impact not only the sales of new units, but also the revenue streams of all those involved in the smartphone supply chain,” continued Ms. Escherich. “Stakeholders that are already participating in take-back or trade-in programs need to have a strategy for turning used devices into a positive asset. Others – particularly high-end phone original equipment manufacturers (OEMs) – need to take a closer look at this market in order to evaluate the impact these secondhand devices will have on their market positions and revenue streams.”
With nearly two-thirds of replaced smartphones being reused, continued demand for high-end used devices will increasingly impact primary-unit sales, and motivate phone providers to look into the secondhand market. In North America and Western Europe, the market for refurbished phones is forecast to be worth around $3 billion in 2015 and growing to $5 billion in 2017. Many users are attracted to used high-end devices that they would not have been able to purchase at the original selling price.
“The growing number of privately sold phones will stir up competition in the take-back market and drive communications services providers (CSPs) and refurbishers to engage in more aggressive marketing campaigns and new incentives,” said Ms. Escherich. “The survey shows that, in the U.S. and Germany, 41 percent of used smartphones find new owners via private sales or trade-ins. This trend applies to all levels of technology users, however, users who identify themselves as ‘tech enthusiasts’ in particular should be targeted to shift their behavior away from private sales and toward trade-ins.”
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