The global second-hand or refurbished smartphone market grew 15% year on year (YoY) in 2021, according to the Counterpoint’s Research’s Global Refurbished Smartphone Tracker.
According to the report, demand and supply surged in the second-hand market often regarded as the secondary smartphone market. This translated to a 15% YoY growth for the market, up to the point that it beat the new smartphone shipments- which grew 4.5% YoY in the same year.
With new smartphone prices remaining at the higher end, a larger share of consumers is buying refurbished models of popular brands like Apple and Samsung. In Nigeria, users often settle for second-hand and refurbished iPhone devices by Apple.
In a July 2021 analysis, Technext found that Apple had the biggest second-hand market globally. Of all smartphone makers, Counterpoint Research Director, Jeff Fieldhack revealed that there has been no slowdown in the appetite for Apple’s iPhone devices within the secondary market.
The market will keep growing
Getting a new smartphone comes with some financial burdens. But with the availability of refurbished alternatives, the user is equipped with the means to cut costs and have a decent and durable smartphone in his hands.
The foregoing explains why the global refurbished smartphone market keeps growing, to the envy of new smartphones. From Africa to the West and Europe, these devices (refurbished smartphones) continue to enjoy popularity and patronage.
Commenting on the volumes and growth of the global refurbished smartphone market, researcher Glen Cardoza said:
“Refurbished smartphones are a part of overall pre-owned devices which re-enter the system through various routes. Trade-ins are the fastest-growing source for such pre-owned smartphones, the volume of which grew more than 10% globally in 2021.”
According to Cardoza, refurbished volumes will grow more in developing markets.
“We are seeing a YoY increase in volumes among refurbished players in developing markets like China, India, Latin America, Southeast Asia and Africa. These markets will grow more as they have many unorganized businesses and a large rural demographic yet to be captured. ASPs (average selling prices) of refurbished smartphones increased marginally as 4G devices still retained value.”
At the heart of the growth in the global refurbished smartphone market is a chain of factors. First, consumer awareness of sustainability (maintaining a smartphone for longer) grew higher in 2021 than in previous years. Second, home and hybrid models of work and study maintained the need for (refurbished) devices.
The third factor is the sustained component shortage in new smartphone manufacturing made businesses and consumers lean towards refurbished options. The last is the increased funding rounds inspired more awareness and marketing initiatives from secondary-market players.
E-commerce players known for new devices are increasingly selling refurbished devices on their platforms, suggesting a shift from the norm. With the increasing adoption of 5G worldwide, upgrades motivated by the technology pushed more supply into secondary markets.
According to the tracker report, there is a renewed focus on value chain activities like Repair in the global refurbished smartphone market. This is comparatively more prevalent in mature markets like the US, Europe and Japan.
Owing to the momentum gathered by the ‘Right to Repair’ movement, there are many new players that have entered these markets seeing a whole new potential once governments and consumer bodies advocate this movement further. Refurbished players in mature and developing markets perceive repair differently as a value-add activity in the chain.
Beyond repair, Eco-rating is another sustainability step taken to help consumers make an informed purchase. These initiatives have started in Europe and are gaining support not only from consumers but also from operators and OEMs. However, these initiatives will still take some time to get a foothold even in mature markets. Businesses will continue to prioritize profit generation, which will slow down the pace of these eco-centric initiatives.
Keeping sustainability in mind, some OEMs have started advertising and assuring all stakeholders about their sustainable practices, right from sourcing and production to the end of the device lifecycle.
This is an ongoing set of initiatives that will gather more steam in the coming quarters. OEMs will have to balance the cost of sustainability with their profit.
The global refurbished smartphone market doesn’t seem to be slowing down. Metrics from the last few years suggest an upward movement in the market.
While refurbished smartphones may not be as good as new ones, more users will keep choosing these devices for the cheaper and sustainable advantages they present.
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