Used Mobile DevicesThe smartphone bubble could not last forever. After more than a decade of meteoric growth worldwide, new smartphone sales have started to stall. In the most mature markets where ownership is now approaching saturation point, new device shipments have actually started to decline.

In January this year, for example, the US smartphone market recorded a 14th consecutive month of year-on-year decline. During Q1 2019, the European market fell 3% YoY, and an even more dramatic 20% quarter-on-quarter.

For a range of reasons, this trend is far from unexpected. In the domestic markets of Western Europe, the US and parts of South East Asia, almost everyone who is inclined to own a smartphone now has one, making organic growth more difficult. The novelty factor of the devices has worn off, and the high price points have, in uncertain economic times, made consumers increasingly cautious about upgrades and multiple device ownership.

Yet behind the story of a plateauing and perhaps even contracting smartphone market there is another factor at play. While sales of new devices are falling, the market for refurbished and used mobile devices phones is actually increasing. According to analysts Counterpoint Research, the global refurbished smartphone market recorded YoY growth as high as 10% in Q2 2018, while sales of new devices fell by 1% in the same period.

Even though more recent figures suggest that high rate of growth has not been sustained – overall used smartphone sales grew 1% in 2018– that still stands in contrast to demand for new smartphones heading in the opposite direction. Indeed, it has been suggested that stuttering new device shipments are having a drag effect on second hand sales, by restricting the flow of used handsets available for refurbishment and resale.

Market logic

So why this shift in sales growth from new smartphones to second hand? Availability of devices out in the wild plays its part. Even if new handset shipments are slowing, there are still billions out there – enough for two thirds of the 7.5bn people living on planet Earth to own one, in fact. Although, like any piece of consumer tech, they do have an operational shelf life, we are hardly talking about disposable items here. The logic of the market will always seek to maximise use from any product, so why keep churning out new smartphones when there are more than 5bn out there already available to be recirculated?

The key driver of this market logic is, of course, cost. Refurbished smartphones are simply cheaper than new. This might not have had such a significant impact on the mobile industry had booming availability of used devices not coincided with soaring prices of the latest models, conceived with a perceived dip in innovation and value.

Put another way, device manufacturers have increasingly sort to demand a premium for what they claim are the latest technological breakthroughs for their latest models, pushing new handset prices steadily upwards. But consumers have become less and less convinced of the value of these so-called innovations – the reasons for upgrading from one iPhone or Galaxy model to the next have become less and less clear over time, pushing phone owners to consider alternative options. Replacing damaged or particularly old handsets with refurbished versions of the last-but-one release, at a fraction of the current new RRP, is an increasingly popular trend.

One final factor at play is that, as an industry, used smartphone supply and retail has matured significantly. A sign of this is the fact that big-name manufacturers like Apple and Samsung are now directly involved in collecting, refurbishing and reselling used devices themselves. But for the rest of the mobile retail industry, ad hoc and disjointed collection and refurbishment has been replaced by larger scale, professional operations like Phoenix Cellular, who provide an end-to-end wholesale service built around high quality standards and robust commercial credentials.

With guaranteed product quality on used devices, high availability of the most popular models and reliable logistics, selling second hand phones is no longer just something for small online and specialist retailers. The infrastructure is there to service mainstream retail markets, and together with high consumer demand, that makes for the ideal combination for growth.

Looking to start selling used mobile devices, or improve your current supplier list, contact our trade team today on +441270 449999 or email sales@phoenixcellular.com for our full stock list and prices.