Refurbished iPhones saw a substantial increase in demand last year – so much so that the problem for retailers was getting hold of used phones in the first place.
Demand is being driven by four factors, while supply is constrained by the fact that people are holding on to their phones for longer than ever …
Counterpoint Research said that sales of refurbished iPhones grew by 16% last year.
With the demand for refurbished smartphones continuing to grow across most geographies, the global secondary smartphone market grew 5% YoY in 2022, according to Counterpoint Research’s Global Refurb Smartphone Tracker […]
In terms of brands, Apple’s global volumes grew 16% YoY in 2022, taking its secondary market share to over 49%. Apple is the fastest-growing brand in the used and refurbished sectors globally. This secondary market demand is affecting new iPhone sales and service revenues in many markets. Apple is a major contributor to the increasing refurbished share as compared to the new smartphone shipments in main markets. The supply crunch is mainly felt for iPhones in refurbished markets.
The growth would have been even higher, says the market intelligence company, were it not for COVID-19-related falling sales in China.
There are four factors at play in the growing demand for refurbished iPhones:
- The difficult economy seeing more people opt for refurbs over new phones
- Greater demand for premium models in the refurb market
- Consumers wanting to upgrade to 5G phones
- Growing willingness to prioritize environmental friendliness over the latest devices
Supply of used phones is especially tricky in developing markets, which traditionally relied on a steady stream from developed markets, as more US, European, and Japanese phones are being resold within their own countries.
Buyers of refurbished phones are mostly getting them from retailers, with carriers also growing their sales in mature markets. Apple is the only smartphone maker to profit from its own refurbs, suggests Counterpoint.
Commenting on the carrier and retailer dynamics in mature markets, Research Director Jeff Fieldhack said, “Large players within the secondary market ecosystem fared better than small players because the large players got better supply in a supply-constrained year. Global carriers and their partners are collecting higher volumes, gaining more power in the secondary market […]
Counterpoint’s research shows that consumers prefer a lower cost even if they have to deal with slightly more imperfection in the device. On the handset OEM side, outside of Apple, it is very difficult to make the economics work on reselling CPO-grade devices.”
As for this year, the company expects even more demand for 5G refurbs, as 4G phones start to lose their resale value at a faster rate.
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