Used smartphone sales to dial in near double-digit growth in 2020

In contrast to recent revenue and shipment declines in the new smartphone market, with minimal growth expected over the next few years, the used market shows no signs of slowing down across all parts of the globe, according to research from IDC.

In its Worldwide used smartphone forecast, 2020-2024 report, an overview and five-year forecast of the worldwide refurbished phone market and its expansion and growth, the analyst defines a refurbished smartphone as a device that has been used and disposed of at a collection point by its owner, sent off to a facility for reconditioning and eventually sold via a secondary market channel. It stresses that a refurbished smartphone is not a “hand me down” or gained as the result of a person-to-person sale or trade.

Based on that definition, IDC expects worldwide shipments of used smartphones, including both officially refurbished and used smartphones, to have reached a total of 225.4 million units by the end of 2020. This would represent an increase of 9.2% over the 206.5 million units shipped in 2019. IDC projects used smartphone shipments will reach 351.6 million units in 2024, with a compound annual growth rate (CAGR) of 11.2% from 2019 to 2024.

The analyst attributed much of the 9.2% growth as driven by mature markets in which trade-in emulates a form of subsidy to push consumers to upgrade. It said that over the past year, it had seen rapid growth in trade-in programmes and average selling prices (ASPs) across numerous channels.

The report also showed that premium flagship offerings continue to rely heavily on trade-in programmes to make the upfront cost more affordable to consumers. Even though it regarded 2020 volume as not as large as expected, IDC thought the used market still performed well compared with the new market, where it was expecting a 6.4% decline for smartphones for the year.

Taking this into consideration, IDC still expected to see double-digit growth during the forecast period, at an average of 11.8%.

In terms of regions, North America accounted for 22.44% of total shipments in 2020 and is projected to grow at a CAGR of 14.9% to 2024 to gain a 27% share. This would represent 94.9 million out of a total of 351.6 million used smartphone shipments.

The study noted that suppliers such as Apple, Samsung and Huawei have all implemented their own programmes with what IDC described as “very aggressive” trade-in offers compared with other channels. Telcos, by contrast, were typically using trade-in combined with bundling – such as family plans and services – to get consumers to turn over their old device and upgrade.

“Refurbished and used devices continue to provide cost-effective alternatives to both consumers and businesses that are looking to save money when purchasing a smartphone,” said Anthony Scarsella, research manager with IDC’s worldwide quarterly mobile phone tracker. “Moreover, the ability for vendors to push more affordable refurbished devices in markets where they normally would not have a presence is helping these players grow their brand as well as their ecosystem of apps, services and accessories.”

IDC mobile phones programme director Will Stofega added: “Although the Covid-19 pandemic has posed challenges for secondary market participants around able-bodied workers and logistics, most of the industry has been able to satisfy demand for refurbished smartphones. Once the pandemic begins to fade, those that were able to invest in technology will be well poised to prosper during the recovery.”