Global Refurbished Smartphone Market Growth Slows to 1% in 2018

The secondary industry was affected by the 11% drop in new smartphone sales in key supply countries such as China and the United States leading to a decline in the availability of used devices  

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March 13, 2019

The global market for refurbished smartphones slowed to 1% year-over-year growth in 2018, reaching close to 140 million units, according to the latest research from Counterpoint’s Refurbished Smartphone Tracker. The secondary industry slowed due to the 11% drop in new smartphone sales in key supply countries such as China and the United States. The drop in new device sales led to a decline in devices flowing into the secondary market. However, this drop was partially offset by improvements in the secondary market’s ecosystem of collection, grading, repairing, and online/offline selling.

Commenting on the size of the secondary market, Tom Kang, Research Director at Counterpoint Research highlighted, “The refurbished smartphone market cooled because of the slowdown of new device sales. The US and China markets saw lower upgrade cycles in 2018, which affected the flow of devices into the secondary market. In addition, China and US trade tensions held up devices in customs much longer than normal. This was especially true during the first half of the year.”

Kang added, “There were areas of growth. The India market grew 14% to almost 14 million refurbished devices. This is an impressive number because the refurbished market ecosystem remains nascent in the country and 72% of devices in India do not go into the secondary market. Therefore, there are tremendous growth opportunities.”

Exhibit 1: Key Country and Regional Refurbished Handset Growth RatesKey Country and Regional Refurbished Handset Growth Rates

Jeff Fieldhack, Research Director at Counterpoint Research added, “For the refurbished market to expand in new markets, the grading system must be standardized and improved. This is especially true in emerging markets where there is limited oversight and limited protections for consumers if the quality is lower than advertised. There will be improvements as the industry is using new technologies such as artificial intelligence to predict device usability and lifespans. There are also new software solutions being developed which will revolutionize grading. This will vastly improve on today’s diagnostic checklist. The next generation of diagnostic tools will be able to test many more components of the smartphone with the result being a much more qualified grading system.”

Other key themes which will help the industry in 2019 and beyond:

  • Apple and Samsung continue to dominate the refurbished market with 70% market share. Many within the refurbished ecosystem cater only to these two customers because their residual value is so much greater than the remaining field. Huawei is growing in popularity, especially in South East Asia.
  • New business models and more marketplace companies entering the ecosystem. There will be numerous more online and offline business models. This will make it easier for consumers to find appropriate refurbished devices and sellers to find buyers.
  • Recognized tier one distributors and service centers continue to become more vertically integrated with greater scale.
  • More government ‘green’ policies are being enforced. This includes right-to-repair laws and more leniency importing and exporting of used devices.
  • Higher percentage of refurbished devices are sold with warranties. This greatly helps overcome consumer hesitancy to purchase refurbished devices

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Counterpoint Technology Market Research is a global research firm specializing in detailed industry analysis of the TMT sectors. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of over 15 years in high tech industries.

Analyst Contacts:

Jeff Fieldhack
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Tom Kang

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