Used and Recovered Smartphone Market

Global Smartphone Market

Main article: Smartphones (global market)

2023

Used smartphone sales in the world increased by 9.5% to 309.4 million units - IDC

At the end of 2023, approximately 309.4 million former smartphones were sold on a global scale, including officially restored ones. This is 9.5% more than in 2022, when approximately 282.6 million such devices were sold. Statistics on the market under consideration on January 22, 2024 were published by IDC.

Analysts note that demand for used smartphones around the world is growing amid declining sales of new devices. In 2023, according to IDC estimates, shipments of new devices amounted to 1.17 billion units, which is 3.2% less compared to the previous year, when the market volume reached 1.21 billion units.

Experts explain the observed picture for several reasons. Against the background of macroeconomic problems and high inflation, buyers are forced to increase the timing of updating their gadgets. At the same time, due to the rising prices for new smartphones, many consumers make a choice in favor of previously used devices. The used device industry also continues to stimulate various Trade-in programs.

In 2023, in the total mass of used smartphones sold, approximately 81.8 million units were sold in North America, which corresponds to a share of 26.4%. All other regions combined accounted for 227.6 million used devices sold - approximately 73.6%. In monetary terms, the volume of the market under consideration amounted to about $64.7 billion.

IDC emphasizes that despite the recorded growth, the pace of development of the used smartphone segment is slowing down. This is due to the fact that due to an increase in the timing of updating gadgets, a shortage of devices is formed in the secondary market. Nevertheless, it is expected that by 2027 sales of used smartphones in the world will reach 431.1 million units, and revenue will increase to $109.67 billion.^[1]

Sales growth of restored smartphones in the combined retail network "MegaFon" and Yota 4 times

In the period from January to November 2023, sales of the recovered quadrupled smartphones in monetary terms and by 149% in quantitative terms. The average price of such a device was 15 thousand, rubles analysts calculated. MegaFon The provider announced this on December 8, 2023.

The most popular brand among buyers of restored smartphones in the combined retail network of MegaFon Yota was, Samsung whose sales in 2023 increased 2.3 times. In second place is the device from, Apple their share increased 2.5 times. Closes the top Xiaomi three with a 4-fold increase. Among the models, the leader in sales in 2023 is. iPhone 8 This is followed by models from Samsung -. Galaxy A50 и Galaxy A32 Also popular, mini, and IPhone XS iPhone 12 Redmi Xiaomi Redmi 9A 9C.

The market for restored smartphones is developing dynamically. The average purchase price of devices is also growing, which stimulates users to take their devices into account part of the cost of new gadgets. We expect that the growth in sales of used smartphones in 2024 in our retail network will exceed 50%, - said David Borzilov, director of MegaFon's sales strategy and development department.

MegaFon began trading restored smartphones in April 2022. The delivery is carried out by a subsidiary of the operator - Smart Bazar. All devices are guaranteed. Before getting on the counter, the purchased smartphones undergo a full-fledged pre-sale service - diagnostics and testing according to 55 unique parameters. If necessary, the components are replaced.

In MegaFon retail, buyers can hand over their device and receive money for it immediately on a bank card or a discount on the purchase of a new one. Smart Bazar surrenders the best devices adopted under the smartphone buyback program and trade-in.

2022: Global Used Smartphone Market Grows 11.5% to 282.6 Million - IDC

On January 9, 2023, IDC presented the results of a study of the global market for used smartphones. In addition, analysts shared their vision for the further development of the industry.

It is estimated that 282.6 million second-hand smartphones were sold worldwide in 2022. These figures include machines restored in official salons and devices sold directly by former owners. For comparison: in 2021, the volume of the industry in unit terms amounted to 253.4 million. Thus, over the year, the industry showed an increase of about 11.5%. At the same time, North America accounted for 73.5 million units, or 26.0%, in total sales. In all other regions combined in 2022, 209.1 million previously used devices were sold (74%).

Exchange programs (Trade-In) continue to be the main driving force for the market of both used and new smartphones around the world. In 2022, new Trade-In initiatives were successfully launched in several regional markets, where trading under this scheme is still a new concept for local consumers. In addition, in mature markets such as the United States, Canada and Western Europe, exchange program trade continues to play an important role in accelerating device refresh cycles. This is facilitated by promotions held by telecommunications companies and retail network participants. Against the background of high demand for used smartphones, the average cost of gadgets during exchange (TIV) has increased: such a situation, as analysts note, is characteristic of periods when the demand for new devices is low. Moreover, the increase in TIV also provoked an increase in the cost of smartphones in the secondary market.

The increase in sales of more expensive models in the segment of new devices gave rise to a cyclical effect: in 2022, as a study by IDC showed, many of the exchange deals were related specifically to premium smartphones. At the same time, analysts say, it is not yet clear how long such aggressive Trade-In programs will last. The main problem is the relatively small profits that such initiatives bring.

Used smartphone market up 11.5% in 2022

The market of used smartphones was able to grow by 11.5% in 2022 due to the restoration of the segment of new cellular devices in 2021. Second-hand devices show higher resistance to market restraining factors compared to new smartphones, as the demand for such gadgets remains increased in many regions. Attractive prices are crucial for the growth of the segment of used devices, because consumers are forced to save. However, due to the increased cycles of updating mobile devices, the cost of used models in 2022 rose by more than 11%, "said Anthony Scarsella, research manager at IDC Worldwide Quarterly Mobile Phone Tracker.

In the coming years, according to IDC experts, the global market for former smartphones will continue to grow steadily. This is explained by the current macroeconomic situation and the high inflation rate. In 2026, according to forecasts, global sales of used devices will reach 413.3 million units. Thus, the CAGR (compound percentage CAGR) during this period will be 10.3%. In 2026, the North American market will account for 103.9 million (25.1%) of the total number of used smartphones sold, for all other regions - about 309.4 million (74.9%).^[2]

2020: Sales of used smartphones in the world increased by 9.2% to 225.4 million units - IDC

Global deliveries of used and restored smartphones in 2020 amounted to 225.4 million units, an increase of 9.2% compared to 2019. Such data are provided in the research company IDC.

The main stimulant of the growth of this market, according to analysts, remain trade-in programs (the delivery of an old device to buy a new one) in developed countries. In 2020, there were more such programs, and the average sales value of phones decreased thanks to them.

The sale of flagship premium products is still largely dependent on programs that provide users with the starting capital to buy a new smartphone. Vendors such as Apple, Samsung and Huawei have launched their own programs with very attractive trade-in offers, the study says.

Used smartphone sales in the world increased by 9.2%

It also noted that telecommunications operators use trade-on programs in combination with package tariffs (for example, favorable offers for the use of services by the whole family) to encourage consumers to hand over their old device and update it.

While 2020 sales were not as large as expected, the used smartphone segment still performed well compared to the new phone market, where sales were down about 6.4%.

If the smartphone market is in decline and its growth in the coming years is minimal, then the used smartphone market shows no signs of slowing down anywhere in the world, says Anthony Scarsella, research manager at IDC Worldwide Quarterly Mobile Phone Tracker.

Consumers see refurbished and used devices as a cost-effective way to save money, he said. In addition, the sale of restored equipment for many brands is a means of involving in their ecosystem those layers of buyers who would not purchase their new smartphones due to the high price.

Indicators of global deliveries of used smartphones (deliveries in millions of units, 2020); market share; cumulative CAGR (CAGR, 2019-2024)

Although the COVID-19 pandemic has created staffing and logistical challenges for secondary market players, demand for recovered smartphones has remained met for much of the industry. Those who can invest in technology are well prepared for the recovery period after the pandemic, says IDC analyst Will Stofega.

With the beginning of the introduction of quarantine and self-isolation measures in many countries due to the coronavirus COVID-19, the demand for used and restored smartphones has grown significantly. In addition, the excitement that began in the first quarter of 2020, caused by the expectation of a deficit due to restrictions on supplies from China and rising prices due to the appreciation of the dollar, as well as the closure of a large number of retail retail outlets, affected. In addition, the pandemic led to a change in preferences among smartphone buyers in trade-in: if earlier people tried to purchase flagship gadgets, then after the collapse of the economy, they began to buy mid-range devices more often.

Among manufacturers in the segment of restored smartphones, Apple and Samsung retain their leadership. In the first place is Apple largely due to its programs for exchanging old products for new ones, as well as insurance.

In 2020, almost a quarter of the market for restored and used smartphones fell on North America - there the supply of these devices amounted to 55 million units. In other countries, shipments of used smartphones measured 170.4 million units or 75.6% in the total volume of the market under consideration. According to experts, this market will grow by an average of 11.2% per year and will amount to 351.6 million units in 2024.^[3]

2019

Global shipments of used and officially restored smartphones rose 17.6% to 206.7 million units - IDC

Global deliveries of used and officially restored smartphones in 2019 reached 206.7 million units, an increase of 17.6% compared to the previous year. This was announced on January 13, 2020 by IDC analysts.

The restored ones include those phones in which the manufacturers themselves change the case, screen and battery, update the operating system and assign it a new serial number. Such devices have an official warranty from the manufacturer and are packaged in a box with new headphones, a charger and accessories. Thus, restored smartphones look like new, but are sold at a discount relative to new products.

Global shipments of used and officially restored smartphones in 2019 reached 206.7 million units, an increase of 17.6% compared to the previous year

According to experts, the demand for used smartphones is growing more and more due to the fact that buying such gadgets can be significantly saved if compared with purchasing a new device.

In addition, when choosing a device, customers often face a dilemma between the new desired specifications and a reasonable price. In the medium term, there are no breakthrough technological innovations that would seriously encourage people to switch to new devices en masse, while simultaneously hindering the purchase of outdated "tubes" in the secondary market.

Refurbished and used devices are still a low-cost alternative for both consumers and companies looking to save money when buying a smartphone. Moreover, the ability of manufacturers to offer more affordable restored devices in markets in which they usually do not have a presence helps these players develop their brand, as well as the ecosystem of applications, services and accessories, - said the Worldwide Quarterly Mobile Phone Tracker research manager. at IDC Anthony Scarsella.

IDC expects that the introduction of the new 5G cellular standard will affect the used smartphone market: owners of LTE devices will begin to sell them more actively in order to purchase more advanced 5G models.

If sales of used smartphones are growing rapidly, then new ones, on the contrary, are declining. According to preliminary IDC calculations, in 2019, manufacturers delivered a total of 1.89 billion new smartphones, which is 5% less than a year earlier. Deliveries are expected to shrink to 1.73 million units by 2023, with market size falling by about 1.8% annually. At the same time, the volume of the used tube segment will grow by 13.6% per year and will reach 332.9 million units.

World's Used Smartphone Shipments, IDC Data

According to IDC analyst William Stofega, factors such as regulatory requirements and environmental initiatives have a positive effect on the used smartphone market, but the economic component affects the most. The biggest role in the growth of the recovered device segment is played by the fact that people can use their devices to buy a new or used device, he added.

In full accordance with global trends, the Russian used smartphone market is also developing. In 2019, according to Avito, Russians purchased 12% more used smartphones than in 2018. At the same time, the most popular trade-in scheme provides a powerful flow of used devices into the channel. As a partial payment for the purchase of new products, Russians, according to experts from Inventive Retail Group, transferred more than 1.3 million used smartphones to retail in 2019, in the next three years this volume will increase by an average of 25-30% annually.^[4]

The recovered smartphone market contracted for the first time in 4 years - by 1% to 137 million units (Counterpoint Research data)

In 2019, the volume of the global recovered market smartphones (Refurbed) decreased for the first time in a 4-year period. The fall was 1%, and sales of such pipes - about 137 million units, according to data from the analytical company Counterpoint Research.

Restored phones refer to devices that have been returned by previous owners and repaired for resale. Unlike used or used tubes, which are sold in the same condition that remains of the former owner, the restored devices look like new thanks to cosmetic and technical improvements. Restored smartphones, as a rule, cost 10-15% less than new ones, and used products lose at least 30-40% in price.

Dynamics of sales of restored smartphones in different regions, data from Counterpoint Research

The segment of restored smartphones in the second half of 2020 grew by 1% due to the high indicators of the fourth quarter. However, this dynamics was not enough for tog to compensate for the weak first half of the year.

According to Counterpoint Research Director Jeff Fieldhack, the global recovered smartphone market shrank over the year largely due to lower sales of new devices in key markets such as the United States, China and Europe. Here, retail sales of pipes in total decreased by 6%.

Experts note that an evolution is taking place in the repaired electronics market, which is very pronounced in the United States and Europe, and which affects the sales of restored devices.

In addition, market growth is facilitated by the Right to Repair bill adopted in 25 US states, which prohibits large manufacturers, including Apple, from forcing users to repair their gadgets only in branded or authorized service centers. Apple strongly opposed the passage of this bill and even took part in the hearings on it.

The global recovered smartphone market slipped in 2019 in part due to weakening demand in the premium gadget segment, as consumers prefer to use their devices for longer. Expensive restored smartphones are most often sold in developed markets. In developing countries, interest in restored devices increased in 2019 amid people's desire to replace simple push-button tubes with more functional ones.

China, the largest market for recovered devices, contracted by 4% in 2019 compared to 2018. This was due to a weakened national economy and the fact that it is harder for players in China's new market ecosystem to make a profit. Tensions in trade relations between China and the United States also affected the secondary market.

Recovered smartphone market shrinks for the first time in 4 years

Counterpoint Research said sales of recovered smartphones declined in 2019 in almost all regions except Africa (up 2%), Latin America (+ 6%) and India (9%). In Europe and the United States, sales of such pipes decreased by 3% and 5%, respectively.

Among manufacturers in the segment of restored smartphones, Apple and Samsung retain their leadership. In the first place is Apple largely due to its programs for exchanging old products for new ones, as well as insurance.

Huawei is inching closer to the leaders of the recovered smartphone market thanks to increased sales of new products and the promotion of its brands. However, US sanctions negatively affect the work of a Chinese company abroad, and in this regard, all hope is to conclude a trade truce between Beijing and Washington, the study says.^[5]

2018: Apple and Samsung control 70% of recovered smartphone sales (Counterpoint Technology data)

The volume of the global market for restored smartphones in 2018 amounted to almost 140 million units, an increase of 1% compared to the previous year. Such data on March 14, 2019 was published by analysts at Counterpoint Technology Market Research.

Manufacturers independently restore used phones, replacing the case, screen and battery, installing a new operating system and assigning a new serial number to the device. Such devices have an official warranty from the manufacturer and are packaged in a box with new headphones, a charger and other accessories. Thus, the restored smartphones look like new ones.

Dynamics of Recovered Smartphone Market Changes Across Countries, 2018 Counterpoint Technology Market Research Data

The market for such products in 2018 practically stopped growing globally due to an 11 percent drop in sales of new smartphones in key markets such as China and the United States. However, this decline was partly offset by improvements in the secondary market ecosystem: collection, sorting, repair and further implementation of restored tubes in offline or online retail.

In 2018, smartphone update cycles decreased in the US and Chinese markets, which affected the entry of devices into the secondary market. In addition, trade tensions between China and the United States delayed phones at customs much longer than usual. This was especially true in the first half of the year, "said Tom Kang, director of research at Counterpoint Research.

At the same time, in some countries there was a surge in demand for restored smartphones. For example, in India they dispersed in the amount of 14 million units at the end of 2018, which is 14% higher than a year ago. Moreover, there remains great potential for further growth, given that 72% of devices in India do not enter the secondary market, Kang noted.

The leaders in the recovered smartphone market are Apple and Samsung, which accounted for 70% of sales of such products in 2018.^[6]

Notes