Years ago, many thought it unthinkable for the refurbished phones market to grow to the size that it has today. By 2013, many were skeptical about the refurbished smartphone market, and the trend was dismissed as a passing fad.
Nevertheless, the market continued to grow, and by 2016, it had become a $17 billion global market. While the trend has caught on in developed countries/region like the United States, Europe and Japan, the market for refurbished phone is still fairly under-developed in many other countries.
By the end of 2017, the market was worth roughly $19 billion, and IDC forecasted that it would continue to grow at a year-on-year rate of 10% through 2022, which is a modest estimate at best.
This growth in the used phone market has been linked to the noticeable slowdowns that the new smartphone market has been experiencing recently, growing only 3% last year — a huge departure from its growth rate in previous years.
There are multiple reasons for this trend, but experts point to three major causes.
Longer upgrade cycles.
IDC reports that upgrade cycles are getting longer at a rate faster than they had previously predicted. Whereas mature used smartphone markets used to have cycled 24–25 months long, “now they’re closer to 27 months and 28 months.”
Rising upgrade cost
One of the main reasons for the longer upgrade cycle is also the rising upgrade cost. The IDC highlights this as the most prominent reason for the used phone market’s recent growth. “Increased smartphone prices at the high end of the spectrum has led to many consumers holding on to their phones longer than expected,” they report.
Moreover, aside from price rise, innovation is smartphones is also a drive that caused people unwilling to upgrade to new phones. Based on a survey conducted by ZDnet, average phone replacement time can go up to 33 months.
In short, this means that upgrading to relatively recent phones sold at a cheaper rate — i.e., refurbished smartphones — had become the more appealing option as of late
Newer Smartphones getting more difficult to repair. As a result the Right-to-Repair movement has steadily been gaining momentum over the past few years.
The consequent expansion of consumer choice to repair has guaranteed that smartphones get an extended lifespan and greater used value.
By 2022, IDC forecasted that the used smartphone market will reach US$52.7 billion. The introduction of new technology like 5G and the trend toward premium phones have raised prices for nearly all smartphone brands in recent years.
Here is a reference of how 5G affected the price increase in smartphones. You can find some example based on Android phones, from an article by Android Police.
If anything is for certain, it’s that the used smartphone market will continue to grow exponentially as second-life devices grow more poised to take a larger market share over the course of the next five years.
Here is the discussion happened in Deloitte Canada TMT Industry Research in regards to Used Smartphones back in 2016.
Interested in buying refurbished phone? Check out our Ultimate Guide of Buying Refurbished Phone in Malaysia!
- Global used smartphone market set to grow 17.6% year-on-year
- Global Used and Refurbished Phones Market Study
- Used smartphones: the $17 billion market you may never have heard of
- Worldwide Market for Used Smartphones Forecast to Grow to Market Value of $67 Billion in 2023
- The 2-Year Mobile Phone Upgrade Cycle Is Mostly Dead
- Smartphones: We’re upgrading less often as prices rise and innovation declines
- The 5G is too damn high