The iPhone 14 took the air out of the 4G iPhone market

Prices for much older models like the 8, 11 and XR series have gone down by about 22%.

From Glenn Cardoza's "Apple Refurbished ASPs Witnessing a Shift in US Due to 5G" posted Thursday by Counterpoint Research:

Apple’s iPhone 14 series launch on September 7 has made a big impact on the markets for new smartphones globally. We are seeing a high demand for the Pro models in particular. The secondary markets have also been impacted, with older iPhone models losing some value.

According to Counterpoint’s Refurbished Smartphone Tracker, Apple is the leader in refurbished smartphones globally and in the US. The older iPhone models like the 8, X and 11 series make up the majority in the US secondary market...

The refurbished smartphone pricing situation for Apple pre-launch was quite good. 4G devices still held on to their values even as 5G had become prominent across the country. The 11, XR and 8 series were still among the top sellers in H1 2022, retaining a high ASP. 12 and 13 series refurbished iPhones’ supply had also been quite low due to low churn.

With the iPhone 14 series launch, the prices for much older models like the 8, 11 and XR series have gone down by about 22%. As these models make up most of the refurbished smartphones, the overall ASP for iPhones in the US secondary market is bound to either stay flattish or go down in the coming months. Q4 2022 will be a deciding factor in this case.

Cue the cute graphic:

My take: Suddenly, a refurbished iPhone 13 looks like a better deal.

10 Comments

  1. Fred Stein said:
    Great news. Validates demand for the 14s.

    7
    October 7, 2022
  2. John Konopka said:
    Also makes for a much lower entry point for those on a budget.

    3
    October 7, 2022
    • Fred Stein said:
      upvoted.

      And thus growing IB of older iPhones, which will upgrade some day.

      Hm, how many of those are “new to old iPhone”? Apple cheerfully reports ‘new to iPhone’, but that does not include the massive resale market.

      2
      October 7, 2022
  3. David Emery said:
    We dropped wife’s iPhone 11 Pro off to return to Apple today. The clerk entered “return to mothership” in the “shipper’s comment” field on the package 🙂

    2
    October 7, 2022
  4. Kirk DeBernardi said:
    “The iPhone 14 took the air out of the 4G iPhone market.”

    All systems normal. (I love it when a plan comes together.)

    Progress. No less.

    2
    October 7, 2022
  5. Bart Yee said:
    Love this blog post, the Counterpoint article and the astute comments above from FOBs.

    The refurbished market tracker looks at businesses that resale iPhones, presumably obtained through easy offer, easy cash for old iPhone, trade ins to Apple and carriers, and maybe some other outlets. It’s great to see a robust market for refurbished iPhones globally and in the US.

    The report points out dropping prices for the 8, X, XR (curiously not XS), and 11. But is this because of less demand and interest, or a big surge in supply because of trade in or selling for cash to buyers/refurbishers/resellers? Maybe a bit of both, especially where iPhone 14’s are in high demand and trade ins are encouraged by carriers and Apple.

    iPhone 12 and 13’s are likely not as often traded in yet because of less difference to new models and only within a couple of years old. Those seeking new or refurbished models of iPhone 13 will find less supply, hence higher prices. Supply of the 12 and 13 may increase as 2023 rolls on and the anticipated iPhone 15 becomes a focus.

    Note well this report does not cover eBay, Craigslist, or other private sales, nor does it reflect hand me down transfers, all of which add to the install base since the transferrer is likely buying a new iPhone.

    2
    October 8, 2022
    • Bart Yee said:
      Not lost here but elsewhere is the fact that Apple itself through long lived hardware and OS support has virtually created the robust second hand iPhone market which, like the App Store, supports a large community of refurbishers. It would be instructive how much of that revenue, which never is seen by Apple for the hardware, really is. A few Billion quarterly to maybe $10B / year? I have some research below.

      2
      October 8, 2022
      • Bart Yee said:
        Doing some digging across Statista, Counterpoint Refurbished reports, and a few other sources. Here’s the numbers.

        2020 refurbished market = $50B USD worldwide
        2021 refurb market grew by 15% = $57.5B
        2021 Apple marketshare was “more than 40%, Samsung a distant second.” Chart looks like about 43%. Since Apple + Samsung =>75%, I’ll assign 33% to Samsung. This would be units sold.

        Here’s where it gets tricky. We know Apple has the most refurbed iPhones sold vs entire refurb market. We also know iPhones retain and sell for much higher values than Android refurbs.

        Given that, the minimum revenue is simply 43% market share X $57.5B = $24.7B or $6.2B quarterly. If we use a conservative estimate that Apple refurbs sales contribute a higher and similar % like new iPhones do for revenues, that easily jumps to a conservative 63% (or more) X $57.5B or $36.2B in revenues, or $9.05B avg quarterly, more than iPads or Macs in 2021!

        Now we can see how large and important refurbished iPhones are to the smartphone economy and directly and indirectly to Apple. Every extended Apple user adds to App Store and services revenue and is a potential gateway into the Apple ecosystem.

        2
        October 8, 2022
        • Bart Yee said:
          2021 global refurbished smartphone market report:

          counterpointresearch dot com/refurbished-smartphone-market-2021-infographic/

          2
          October 8, 2022

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