Apple rules the refurb market

In 2017, the refurbished market—mostly second-hand iPhones—became the fastest growing smartphone segment.

From Counterpoint Research’s The Surprising Growth of Used Smartphones:

According to the latest research from Counterpoint’s Refurbished Smartphone tracker, the global market for refurbished smartphones grew 13% y/y in 2017, reaching close to 140 million units. This was in contrast with the global new smartphone market that grew a scant 3% last year (see here), thus being outpaced by refurbished “second life” smartphones…

Commenting on this important trend, Research Director, Tom Kang, highlighted, “With 13% growth, refurbished smartphones are now close to 10% of the total global smartphone market. The low growth of the new smartphone market in 2017 can be partially attributed to the growth of the refurb market. The slowdown in innovation has made two-year-old flagship smartphones comparable in design and features with the most recent mid-range phones. Therefore, the mid low-end market for new smartphones is being cannibalized by refurbished high-end phones, mostly Apple iPhones and, to a lesser extent, Samsung Galaxy smartphones.”…

Regions seeing the highest volume include the US and Europe. While the fastest growing markets for refurbs include Africa, SE Asia and India.

My take: If you allow a camel to put his nose under the edge of your tent, you will soon have a camel in your tent.

7 Comments

  1. George Row said:

    My neighbour who does not care about technology and is delighted to simply have email and the web in her pocket, is still happily using her 7-year-old iPhone 4.

    My Take: iPhones last for ever! At least compared to other phones. So it’s no wonder that most refurbished smart phones would be iPhones.

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    March 14, 2018
    • Ken Cheng said:

      The iPhone 4 was a very good model in my experience. First with decent camera and a non-plastic body that didn’t crack over time. And if you don’t hold it wrong, it can even make phone calls!

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      March 14, 2018
  2. Ken Cheng said:

    And to add my anecdotal 2cents, my younger brother and his wife were still using 5c, only 5 chip generations old! I had given my 6 to one of my nephews, and felt embarrassed I hadn’t given it to my brother, but he who asks first is rewarded! Anyhow for his birthday, I bought two refurbished 6s iPhones to assuage my guilt, and they came like new. $250 for 64gb, was hard to pass up. Battery was past spec with 600+ recharges, but I got new ones for $29. For a couple like my brother and his wife who had been using 5c iPhones, the 6s is brilliant! I’m quite sure they were not going to buy an 8 or an X, though an SE was a possibility. If a new SE model had been released, I would have opted to buy them that model. So, I can see why the refurbished market is flourishing since there are a lot of people who don’t need a new supercomputer in their pocket. A decent one can be had for less than $300.

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    March 14, 2018
  3. Fred Stein said:

    The is great news.
    1) Increases growth for services
    2) Increases the market share of users, vs. new shipments market share.
    3) Refutes the ‘premium priced’, ‘elitist’ critique.
    4) Increases access to the Apple ecosystem.
    4.1) New faces walk into Apple Stores, where they feel the magic, buy more stuff.
    5) Lowers the effective cost of new iPhones, with trade-in value.

    3
    March 14, 2018
    • Fred Stein said:

      Adding:
      6) Takes business and margin from Android cloners
      6.1) At the low end, below $350
      6.2) At the high-end by reducing the net effective price of iPhones.

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      March 14, 2018
  4. Gregg Thurman said:

    In 1984 I founded a business (with $4,000 in borrowed cash) that bought, repaired, refurbished and sold telephone systems with a minimum 72 extensions. Most were in the 100 to 200 extension class although I did sell a couple to the Bank of China that had over 300 extensions. I closed the business in 2004. My best year generated $6 million.

    That market continues to thrive today.

    I would have been shocked if there wasn’t a secondary market for smartphones. I would be even more shocked if iPhone didn’t lead that market in share.

    I specialized in one manufacture back then – Mitel. Mitel was an expensive Canadian product that was powerful, easy to use and very reliable. Of the dozens of manufacturers back in the ‘80s, Mitel is one of the few to still exist.

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    March 14, 2018
  5. Gregg Thurman said:

    Mitel continues to manufacture high end telephone systems today. The number of less expensive manufacturers that have gone out of business number in the dozens.

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    March 14, 2018

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