There has been an exponential growth in the new smartphone market in the last decade due to its vast range of applications and effect on daily human life. But, in past few years, it has been observed that the refurbished and used phone market is gaining momentum as well. According to the study, up to 120 million used smartphones were sold by the consumers in the year 2016, generating a revenue of about USD 17 billion for the consumers. The difference between a refurbished phone and a used phone is that used phone is sold as-is and refurbished phone is tested, cleaned and repaired (if necessary) before selling. It is found that second-hand devices now represent close to 10% of the total smartphone market.
Smartphone manufacturers driven by technological advancements and cutting-edge competition between them have led to the launch of new phone models every 6-12 months. Smartphones getting expensive day by day have led to the boom of refurbished and used phone market. Also, refurbished premium smartphones are more appealing to the consumers than new unbranded phones. Hence, consumers willing to buy a refurbished premium smartphone rather than a new unbranded smartphone have cannibalized the sales of unbranded or low segment phones. Apart from this, growing worldwide electronic waste has forced governments such as the US and Canada, to regulate its production. Thus, refurbished and used market is driven by the government policies of recycling and reusing the electronic waste. For instance, smartphone manufacturers such as Apple Inc. and Samsung have started selling refurbished phones on their respective websites and have seen major growth in that. Biggest network carriers of the US and Europe provide trade-in option along with the contract plan so that users can replace their old devices with a new one. This strategy helps them to encourage the customer contract plan extension which, in turn, contributes towards the growth of refurbished and used smartphone market.
The major advantage of selling a smartphone rather than passing it to a family member or keeping it as a spare phone would depend on how easy it is for the consumer to sell. Thus, the willingness to sell the phone and the difficulty in the process of selling can act as a restraint to the growing refurbished and used phone market.
In recent years, there has been a slowdown in innovation which has made possible to compare a refurbished or a used flagship phone to a new mid-range smartphone. For instance, Apple iPhones contribute majorly to refurbished and used phone market followed by Samsung Galaxy series. Hence, the new mid-range smartphone market is cannibalized by the refurbished and used phone market. The fastest growing market for refurbished and used phones is in developing nations like India, south-east Asia and Africa. Data analysts in the industry predict the resale value of the smartphones and provide offers to the customers like guaranteed buy-back value. Also, the resale value of the used and refurbished phones is directly proportional to the growth of used and refurbished phones market.
Apple Inc. and Samsung electronics lead the smartphone market worldwide and are technology leaders as well. Also, in refurbished and used phone market, they capture nearly 75% of the total market in terms of the number of customers as well as revenue.
In terms of operating system, refurbished and used phone market can be segmented as:
In terms of price segment, the refurbished and used phone market can be segmented as:
• High-end phones
• Mid-range phones
• Low- range phones
In terms of region, the refurbished and used phone market can be segmented as:
• North America
• Other European countries
• Other Asia-pacific countries
• South America
• Other south American countries
• Africa and Middle East
• Saudi Arabia
• South Africa
• Other African and middle east countries
Some of the key players in the refurbished and used phone market are:
• Apple, Inc.
• Samsung Electronics Co. Ltd.
• Lenevo Group Ltd.
• Amazon.com Inc.
• Verizon Communications, Inc.
• AT & T Inc.
• Bestbuy.com, LLC
• Redeem UK Ltd.