Second hand phones could expose resellers to data risks

The second hand market for mobile phones has overtaken the spending on new products and shows no sign of slowing down as users look to get the latest technology at a lower price.

The market for used phones is now estimated to be worth $25bn and has gone past the value of the primary market, with no signs that trend will be reversed.

But there are warnings from secondary mobile market specialist B-Stock, which has come up with the $25bn number, that those in the channel that might dabble in selling on phones could get in trouble if previous user data is not protected.

With Apple's CEO Tim Cook indicating to analysts in its latest first quarter results conference call that it has no intention of reducing prices the prospects for those selling second hand iPhone X models are set to remain buoyant.

B-Stock found that iPhone X pricing for a secondary user was around 62% of the original RRP and it had now overtaken the iPhone 7 and 7 Plus as the most sold used model.

The firm also highlighted the number of owners that these phones were going through, with two to three people buying the products after their first use, pointing out that the risks of personal data being compromised were significant ones.

“When it comes to smart devices, a primary concern of the initial user is the safety and security of their data; consumers understandably need reassurance that details like financial and personal information will no longer be accessible from the device they are trading in,” said Sean Cleland, vice president of mobile for B-Stock.

The firm has noted that with the increase in trade-ins offers the channel has been given access to bulk quantities of phones from carriers and some picking the products up might not be aware of the data risks. B-Stock is recommending that those devices are sold to resellers with a track record of handling secondary goods.

When asked about whether or not Apple should review its iPhone pricing Cook responded by pointing out that the latest models had roughly the same pricing as the last versions in the US. Outside its home market he did concede that exchange rates might have made the products appear more expensive but the vendor was taking steps to reduce the impact.

"What we have done in January and in some locations and some products is essentially absorbed part or all of the foreign currency move as compared to last year and therefore get close or perhaps right on the local price from a year ago," he said.

IDC has long been tracking the fortunes of the mobile phone market and last year was expected to bring in a decline in primary unit sales but the analyst house is expecting a bounce back over the course of 2019.

"Even though 2018 will bring a larger decrease than previously forecast, we are still optimistic that 2019 will bring nearly 3% growth to the smartphone market at a worldwide level," said Anthony Scarsella, research manager with IDC's Worldwide Quarterly Mobile Phone Tracker.