If you're looking to sell your old smartphone for some extra cash, now might be the perfect time. According to new research from data analyst firm CCS Insight, the growth in market for second-hand and refurbished smartphones is higher than ever.
A surge in larger companies investing in the sale, refurbishment and recycling of second-hand phones will soon be dominating in the market share, generating more revenue than the primary smartphone market as well as peer-to-peer and small-scale high-street sellers!
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A key highlight from the research conducted by data analyst firm, CCS Insight, has revealed that the average resale price of a pre-owned iPhone device is in fact higher than that of brand-new models. Growth in what they call the "circular economy" in association with pre-owned smartphones is set to accelerate in 2022.
CCS Insight's research reveals that as many as 1.4 billion phones will reach their first end-of-life cycle in 2022. A little over half of these devices will remain in drawers or be thrown out, but a growing proportion will be resold on the second-hand market. A selection of those units will be refurbished and sold "as new", with prices close to those of brand-new devices and competing head-on with new smartphones.
The sale of second-hand smartphones in 2021 generated over $13 billion of revenue for organized commercial resellers, with informal peer-to-peer sales (marketplace sellers) and the growing network of retail organized re-sellers now accounting for 107 million unit sales, recognised as a 28% growth in market on the previous year.
So what does this mean for consumers? With the cost of living for many of us becoming a concern, tightening budgets and a focus on sustainability will presumably ensure strong growth in second-hand markets over the next five years, according to CCS.
As long as you're given a warranty and the device is fully functional, there's no reason not to consider second-hand smartphones over new-condition flagships if it can save you potentially hundreds of dollars.
The dominant primary smartphone market and manufacturers such as Apple, Samsung, Huawei, Google - to name just a few - may have to start reducing the price of their latest flagship smartphones upon release (although it's unlikely they will) if they don't want to lose out on the top market share of smartphone sales revenue.
Simon Bryant, vice president of channel and supply chain research at CCS Insight, has shared that, "The market is maturing rapidly and the industry structure remains fluid, with many companies emerging as serious players. They include the likes of Cashify, Backmarket, Genuine Solutions, PCS Wireless, Phobio, Recommerce, Renewd, and Swappie. Specialist companies currently represent a large proportion of this market, with many established smartphone brands still playing catch-up".
Bryant also notes that in the European market, trade-in volumes do not come close to sustaining demand. "Over 11 million units had to be imported to sustain demand for second-hand iPhones and premium Samsung smartphones".
Apple iPhones are said to make up over 80% of this circular economy, and the high residual value of iPhones ensures that they remain in demand, with the average resale price in the secondary market being about 14% higher than in the primary smartphone market.
Many phones from other leading brands have limited value in this industry in comparison with iPhone's, and are often discarded or passed down to family members as backups.
A small but growing number of these phones are harvested for parts and valuable raw materials, in the UK for example, you can trade in phones with cracked screens and water damaged units to companies like Envirofone and CeX, receiving as little as one penny in return depending upon the model of the device, or a trade-in discount when purchasing another device. Mobile network companies such as O2 offer a similar trade-in discount service for your old smartphones.
CCS Insight's research suggests that beyond the US, the circular economy for the sale of second-hand and refurbished smartphones is vibrant especially the UK, the Netherlands, France and India. Though, in northern Europe, Germany and other developed markets, the second-hand industry remains in its infancy.
The forecast from CCS into 2026 expects that sales of second-hand smartphones in these regions will grow over the coming years, despite supply being a large barrier that will drag on the volume growth over these periods.
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