Buying and selling second-hand mobile phones online used to be a fairly amateurish business based on a few little-known marketplace sites. Both the apparent lack of demand for pre-owned mobiles and the belief that they were of minimal value meant that there was little in this low key, informal industry to interest the mainstream corporate world of new consumer gadgets. No longer!
Somehow the trade in second-hand mobiles became a multi-billion dollar global industry. Although the technological features of the latest, most powerful smartphone releases continue to grab the headlines, in the background a quiet revolution has been taking place. So what’s changed?
For a start, larger marketplace sites such as eBay and GumTree started to feature used devices and traders realised that there was good money to be made. Second, put simply － cost. Sales of new smartphones have declined. Instead of paying ever-higher prices for the latest models from the biggest brands, many consumers have ditched the default position of automatically upgrading to the latest model and have begun to appreciate the lower cost alternatives that offer value and reliability over the latest fads.
And, not least, having endured a decade or so of stagnant wage growth, consumers are having to be choosier about how they spend their money. Many realise they can now obtain excellent value and reliability from pre-owned handsets which continue to function perfectly well long after their original owners have traded them in for the latest upgrade.
This is a trend that is now attracting mainstream attention. The giants in the mobile technology race, major players such as Apple and Samsung, have acknowledged as much. Both now sell refurbished smartphones and many high street and online retailers have jumped on the bandwagon, looking for a slice of the action in what is the fastest growing sector of the mobile industry.
In this post, we’ll examine how quickly the market for used phones has grown.
In 2016, Deloitte, the market analyst, published a paper predicting forthcoming trends in technology, media and telecoms. The company referred to the used smartphone sector as ‘the $17bn market you may never have heard of.’ Since then, the market has developed apace, and whichever figures are pored over, similar findings point to an explosive growth in the market for pre-owned mobile phones, to the extent that it can already be described as a $20bn industry.
Initially, Deloitte stated that sales of used handsets were increasing at an extraordinary rate. The company estimated that the global trade value of pre-owned phones had grown from $11bn in 2015 to $17bn in 2016, a remarkable year-on-year increase of 55%. International Data Corporation (IDC), another global market intelligence heavyweight, forecast that the used phone market would be worth $52.7bn by 2022.
If the figure projected by Persistence Market Research is used, predicting growth in used phone sales at a compound annual growth rate (CAGR) of almost 10% between 2018 and 2026, it is very likely that the market is already worth around $20bn.
In fact, Persistence calculated that combined sales of refurbished and used mobiles reached $19.7bn by the end of 2017. There’s no doubt the pre-owned mobile phone sector is booming, a trend that most analysts agree will continue. No less importantly, the sector is growing much faster than sales of new smartphones, and may even be contributing to the slowdown in that market.
Confirming this point, IDC has reported that in 2017, for the first time, global shipments of new smartphones declined, falling by 0.5%. And overall growth in smartphone sales was just 3% that year, according to Counterpoint Research. Peter Richardson, Counterpoint’s Director of Research, has pointed out that with year-on-year growth of 13%, the pre-owned market is the fastest growing of all smartphone sub-sectors, including the domestic markets in huge emerging economies such as China and India.
So what has fuelled this phenomenal growth? Changing consumer demands, a coming-of-age in the used mobile industry and changes in smartphone technology itself have all combined to make new phones less appealing to consumers. Counterpoint’s Tom Kang believes that the increasing slowdown in technological innovation with every new smartphone release has helped to make second-hand phones more attractive to consumers.
The reduction in new original features has made two-year-old flagship smartphones comparable in design and functionality to the most recent mid-range phones. Which means that the mid to low-end market for new devices is being overtaken by refurbished high-end phones, mainly Apple iPhones and, to a lesser extent, Samsung Galaxy handsets.
The used mobile success story makes a lot of sense when you consider that used and refurbished smartphones offer substantial cost savings for increasingly value-conscious consumers. Additionally, supply chain development has made it easier than ever to find second-hand versions of the top-flight models from a wide range of outlets. And where there’s healthy competition and no shortage of stock, prices will be keen.
A company such as ineedamobile.com, a leading UK online retailer of second-hand smartphones and gadgets, offers an extensive range of top quality refurbished devices. All products come with a 30-day return policy, 12-month warranty and free next day delivery. The retailer also buys devices and will pay up to £1,000. Check out some of the reviews on their website to be assured of their excellent service.