We are happy to announce that Counterpoint would be joining the Mobile Disrupt Conference 2023 as the official media partner. Our Research Director Jeff Fieldhack is also speaking at Mobile Disrupt Conference 2023 at Las Vegas, NV on June 14 – 15, 2023.
Where: The Venetian, Las Vegas, NV When: June 14 – 15, 2023
Mobile Disrupt 2023 is the foremost gathering for professionals in the Wireless Mobility sector. Checking in at the event are companies focusing on Mobile Device Management, Technology and Wireless Expense Management, Enterprise Mobility, Secondary Phone Market, Wholesale Mobile Distributors, Mobile Repair & Refurbishing.
Attendees span from mobility to enterprise experts, including resellers, brokers, electronic recyclers, and mobility professionals who are actively engaged across the secondary phone market. The event provides a unique opportunity for industry professionals to collaborate on best practices, enhance procurement opportunities, and discuss the latest trends shaping the industry.
Refurbished smartphone sales grew 5% globally but China saw a 17% YoY decline.
Apple captured 49% of the global refurbished smartphone market in 2022 followed by Samsung at 26%.
India led the market with 19% YoY growth, followed closely by LATAM with 18% YoY growth.
5G is growing in the secondary markets. It now makes up 13% of global refurbished sales.
London, Hong Kong, Boston, Denver, Toronto, New Delhi, Beijing, Taipei, Seoul – April 24, 2023
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. The growth would have been more if not for the 17% decline in China’s refurbished smartphone sales. This was the steepest drop for the Chinese secondary market in years. A resurgence of COVID-19 and introduction of “COVID-Zero” policies were the major factors affecting business and demand in the country. India led the global refurbished smartphone market in 2022 with 19% YoY growth, followed closely by LATAM with 18% YoY growth.
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.
Samsung’s share decreased to 26% in 2022 from 28% in 2021. Within the secondary market, there was a small percentage shift of Android consumers to iOS in 2022, which affected Samsung refurbished sales. This trend will likely continue in 2023.
Source: Global Refurbished Smartphone Tracker
Source: Global Refurbished Smartphone Tracker
Refurbished smartphone demand is mainly coming from:
New smartphone buyers (mature markets)
Feature phone users shifting to smartphones (emerging markets)
Unofficial channels dependent on C2C or hand-me-downs
While the supply is mainly coming from:
Refurbished smartphone retailers (growing the most)
Carriers have started offering refurbished options but mainly in mature markets.
OEMs are struggling to collect and resell refurbished smartphones.
A larger share of consumers preferred to buy premium and flagship refurbished smartphones compared to previous years, pushing up secondary market ASPs (average selling prices). 2022 also saw many new smartphone consumers shifting their focus towards sustainability and environmental awareness.
Trust levels towards refurbished smartphones increased across markets. Evolved business models and effective marketing strategies were adopted by refurbished players in most markets. Trade-in volumes were higher than ever.
In contrast, new smartphone holding periods grew globally. ASPs of new smartphones continued to increase, pushing consumers to hold onto their devices for longer. This continuing trend has hurt the supply of secondary market devices.
Transport, trade and logistics on global trade routes were affected mainly by main hubs like China shutting down in 2022. Supply levels fell, especially for Grade A refurbished smartphones.
Commenting on the growth in refurbished volumes, Senior Analyst Glen Cardoza said, “The global refurbished markets are going through transitions. Supply remains constrained as consumers are holding on to smartphones for longer. At the same time, demand for 5G is increasing, especially in mature markets like the US, Europe and Japan. In 2022, 5G made up 13% of global refurbished sales. The business potential of dealing in refurbished smartphones remains high, but the limited supply is affecting most emerging markets like LATAM, Southeast Asia, India and Africa. Imports from mature markets like the US, Europe and Japan have reduced as they have to cater to their own demand. We are looking at a transition where most markets are growing their own repair and refurbishment ecosystems domestically. This is changing the trade routes and reducing China’s imports and exports. Domestic players everywhere are focusing on expansion, partnerships and additional supply avenues.”
Source: Global Refurbished Smartphone Tracker
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. The other key dynamic of certified pre-owned volumes (CPO) declined in 2022. 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.”
While domestic infrastructure is being built, most upcoming refurbished players are concentrating on building their B2B channels. Growth was a bit more erratic for businesses in 2022 as there was no pent-up demand like in 2021. Apple’s iPhones remained the most sought-after smartphones due to the brand perception, high margins, and high inventory turnover ratios.
What we can expect in 2023
A lot of the changes in the secondary markets in 2022 will spill into 2023. 5G smartphone share will increase substantially and 4G smartphones may lose their value at a faster rate in 2023. The increased trade-ins and shift towards premium smartphones may bring about a situation where the inventory of low-grade used smartphones may grow significantly. End-of-life activities like disassembly, logistics, warehousing, recycling and e-waste disposal should see additional opportunities. IT asset disposition (ITAD) businesses could see a better outlook, too.
Feel free to contact us at press@counterpointresearch.com for questions regarding our latest research and insights.
Background
Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.
More and more smartphone OEMs are adopting the circular approach. Apple and Samsung stand out as leaders in sustainable initiatives.
Each of the top OEMs performs differently across the three major stages of the smartphone circular economy – production, usage and end of life.
OEM tie-ups with local sustainability partners have increased, leading to circular initiatives across geographies. But OEM initiatives fall short when compared to the volumes of new smartphones being shipped every year.
London, Jakarta, Hong Kong, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – December 27, 2022
Apple leads the smartphone space in the overall approach towards sustainability, according to Counterpoint Research’s latest “Smartphones and Circular Economy: Creating a Sustainable Future” report. This report assesses how well the OEM is reducing its impact on the environment by reusing materials, recycling devices, and minimizing waste at each stage, from the design of the smartphone, processing chips, and packaging to power consumption. The report also encompasses corporate-level initiatives, progress on carbon neutrality, and SDG 13 (one of the 17 Sustainable Development Goals adopted by the United Nations).
The Smartphone Circular Economy Report Scorecard includes a robust metric system that evaluates the top five smartphone OEMs globally. Each OEM has its own vision and overall approach toward sustainability. Apple’s vision seems to be clearer than its competition and its actions support the said vision.
Apple on Top in Sustainability Vision Rankings Compared to Immediate Competition
Source: Counterpoint Research’s Smartphones and Circular Economy Report
While sustainability vision is just the start, each of these OEMs has performed quite differently across the three major stages of the smartphone circular economy:
Production
Usage
End of Life
Production
Production of a smartphone is responsible for about 80% of the total carbon footprint in its life cycle, and hence it is the most vital of the stages. OEMs have concentrated on and advertised this aspect the most. Newly sourced materials are being replaced with eco-friendly components, while biodegradable and eco-friendly packaging is the norm now. Even water-saving mechanisms are being adhered to in the entire manufacturing ecosystem. OEMs are now expecting their vendors to adhere to environmental norms as well. Top brands like Samsung, Apple, and OPPO have started propagating environmental benefits through their initiatives in production. The details, however, are more complex than what is being advertised. While the initiatives are a big step in the right direction, revenue and profit remain the apex objectives.
Usage
Most consumer durable brands inherently work towards motivating consumers to replace their devices with newer, more technologically enhanced versions. But due to sustainability efforts, OEMs have to maintain a balance between enticing the consumer and saving the environment. Chinese leaders like OPPO, Xiaomi, and, vivo are consistently trying to improve battery life and energy efficiency.
While Apple scores high on overall longevity, updates, and innovations toward sustainability, Samsung scores higher in repair, energy efficiency and after-sales networks. In the end, it depends on how long a consumer chooses to use a device. Any steps taken by OEMs to support this endeavor matter most.
End of Life
OEMs have a lot to do when it comes to reclaiming their smartphones once their useable life comes to an end. Getting pre-owned smartphones back into the system is necessary to handle them sustainably. They need to be repaired/refurbished for reuse or recycled responsibly to complete the circular loop. The main objective here is to reduce e-waste. It is vital to know how much OEMs are doing for this cause.
The global refurbished market has grown by leaps and bounds in the last few years. In 2021, the market grew 15% YoY and shows promise to grow further in the coming years. Carriers and retail refurbishment players are growing but OEM initiatives on reclamation, refurbishment, and e-waste reduction are quite limited. Even the best brands are not active enough in pulling back their used stock. The highest potential now rests with initiatives like trade-ins, which ensure a buyback of the older devices. This takes volumes of landfills. Brands like OPPO, vivo and Xiaomi have a long way to go with reclaiming and refurbishing devices if we consider the volume of new smartphones shipped by them every year. Apple and Samsung lead here as well but most of the reclaiming and refurbishing is done by the other players in the secondary ecosystem. The end-of-life stage is quite complex but one of the most rewarding if done right.
OEM tie-ups with local sustainability partners have increased, leading to circular initiatives across geographies. But such initiatives need to grow at a faster rate to be in consonant with the volumes of new smartphones being shipped every year. There are opportunities as well. Sustainability and its different aspects, initiatives and players can be broken down into many sectors with varying opportunities. The benefits for the environment compound when the industry and government take steps in the right direction.
OEMs already have a name for themselves, but their sustainability initiatives will either make or break their perception in the years to come.
Feel free to contact us at press@counterpointresearch.com for questions regarding our latest research and insights.
Background
Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.
Even as older iPhone models lose value, Apple continues to be the leader in refurbished smartphones globally and in the US.
The ASPs of iPhones in the refurbished market are going through a transition as 4G LTE devices lose more value. Increase in 5G usage has a big part to play here.
With the iPhone 14 series launch, the prices for much older models like the 8, 11 and XR series have gone down by about 22%.
Apple’s iPhone 14 series launch on September 7 has made a big impact on the markets for new smartphones globally. We are seeing a high demand for the Pro models in particular. The secondary markets have also been impacted, with older iPhone models losing some value.
According to Counterpoint’s Refurbished Smartphone Tracker, Apple is the leader in refurbished smartphones globally and in the US. The older iPhone models like the 8, X and 11 series make up the majority in the US secondary market. The iPhones’ average selling prices (ASPs) in the refurbished market are going through a transition wherein the older models are quickly losing value due to the newer models on sale. 5G has a big part to play here. As more and more consumers opt for 5G packages, shipments of new 5G smartphones are overtaking 4G handsets in the US. Consumers looking to buy a refurbished iPhone would most likely want to use the saved money on a good 5G plan. This is reducing the demand for 4G LTE iPhones. With the economy in the doldrums, some consumers might opt for the iPhone 13 series in the secondary market instead of a new iPhone 14 series.
Source: Counterpoint Research Refurbished Smartphone Tracker
Note: Refurbished iPhones considered were in Grade A condition
We tracked the refurbished iPhone prices before the 14 series launch and after the launch. Normally, there is a loss of value for certain older iPhone models after a new launch. However, the loss of value for 4G iPhones like the 8, 11, X and XR series has been much greater. Unlike the 6 and 7 series, these models are still selling well in the US market. There is one factor contributing to this accelerated reduction and that is 5G. Until 2021, 4G devices held on strongly and so they sold well. Now, with 12 and 13 series models in the market and a healthy upgrade cycle, consumers are looking to get a 5G compatible smartphone to utilize higher speeds in the US.
Pre-launch
The refurbished smartphone pricing situation for Apple pre-launch was quite good. 4G devices still held on to their values even as 5G had become prominent across the country. The 11, XR and 8 series were still among the top sellers in H1 2022, retaining a high ASP. 12 and 13 series refurbished iPhones’ supply had also been quite low due to low churn.
Post-launch
With the iPhone 14 series launch, the prices for much older models like the 8, 11 and XR series have gone down by about 22%. As these models make up most of the refurbished smartphones, the overall ASP for iPhones in the US secondary market is bound to either stay flattish or go down in the coming months. Q4 2022 will be a deciding factor in this case. With models like the iPhone 12 Mini, 13 Pro and 13 Pro Max being discontinued, many consumers might look to the secondary market. And with strong deals on the 14 series iPhones, the collection of the iPhone 13 series is bound to go up, promising a good supply in the US market.
While the iPhone 13 series prices in the secondary market have gone up considerably after the iPhone 14 series launch, the trade-in supply for the iPhone 14 series is bound to come from much older iPhones like the X and 11 series. A big factor that could cause this is the extended ownership period. Consumers in the US are holding on to their smartphones for an average of 3 years and 7 months now, which is quite high compared to previous years. The ownership duration is bound to stay at this level for some time.
What we can look forward to
The US refurbished smartphone market ASPs are quite fluid. iPhones depreciate a few % points each quarter. While the refurb pricing for the iPhone 13 series is quite high right now, we could see the ASPs for this series come down after Q4 2022. We could also witness the phasing out of the 8 and X series in 2023, which will result in an increase in ASPs. While new iPhone prices have plateaued, it is difficult for refurbished iPhones to get any lower. It is up to the consumer to weigh the pros and cons based on personal and economic factors.
Over the last few months, various OEMs have been busy touting their sustainability credentials. At the launch of its latest foldable smartphones in early August, Samsung emphasised its ‘Galaxy for the Planet’ initiative, a sustainability platform which establishes a set of targets to be reached by 2025 to reduce Samsung’s environmental footprint and lessen resource depletion from production to disposal of its Galaxy products. And in early September, HMD Global introduced ‘Circular’, a new sustainability subscription service that aims to give Nokia devices a second life through recycling, refurbishing and re-subscribing. Then, at its launch event last week, Apple went to great lengths to outline the eco-friendliness of its new devices.
Let’s take the iPhone 14 Pro as an example. Using Apple’s own words, the iPhone 14 Pro is “designed to minimise its impact on the environment, with 100% recycled rare earth elements used in all magnets, including those used in MagSafe, and 100% recycled tungsten in the Taptic Engine. The model also includes 100% recycled tin in the solder of multiple printed circuit boards, and 100% recycled gold in the plating of multiple printed circuit boards and in the wire of all cameras. Fiber-based packaging does not use outer plastic wrap, bringing Apple closer to its goal of completely removing plastic from all packaging by 2025”.
Sustainability highlights of the iPhone 14 Pro
Source: Apple
All the focus on recycled materials has resulted in a drop in carbon emissions throughout the new devices’ life cycles compared to last years’ iterations. For example, the iPhone 14 has a carbon footprint of 61kg of CO2e, down from 64kg for the iPhone 13, and the iPhone 14 Pro has a carbon footprint of 65kg of CO2e compared to 69kg for the iPhone 13 Pro. This reduction in carbon footprint is mostly down to the increased use of recycled materials and a more efficient supply chain, meaning that the production proportion of the phone’s life cycle has dropped by as much as 10%.
One concerning point, however, was the increase in carbon emissions through the use of the new devices. This is especially true with the iPhone 14 Pro, where carbon emissions through use have increased by 18% compared to the iPhone 13 Pro (9.8kg CO2e versus 8.3kg CO2e). This could be down to the iPhone 14 Pro’s use of the new A16 Bionic chip, although Apple claim the A16 is 15-20% more efficient than the A15. Perhaps then it is due to the slightly upgraded Pro Motion display?
Carbon footprints for current and previous iPhones
Source: Apple
Another interesting point is how much of the carbon footprint is accounted for by the manufacturing of the devices (around 80%). Yes, this is on the way down, but still accounts for the vast proportion of the phone’s life cycle. It is heartening, therefore, to see that iPhones are the most popular second-hand phones globally. Refurbished iPhones are a great way to ensure that the significant carbon emissions of producing a new iPhone go towards multiple lives of the device, not just one.
Refurbished smartphone sales, 2021
Source: Counterpoint Research
Apple also reiterated its carbon neutrality goals: by 2030, Apple plans to be 100% carbon neutral across its entire manufacturing supply chain and all product life cycles. This means that every Apple device sold, from component manufacturing, assembly, transport, customer use, charging, all the way through recycling and material recovery, will have net-zero climate impact. Setting ambitious goals such as this is vital in creating a sustainable future for the smartphone industry. With Apple’s resources and momentum, its target looks achievable.
Counterpoint will be attending Recommerce Expo 2022 from 18th-20th May.
Our Senior Analyst, Glen Cardoza, will be speaking at the Recommerce Expo 2022. You can schedule a meeting with him to discuss the latest trends in the technology, telecommunication and refurbishment sector and understand how our leading research and services can help your business.
Click here (or send us an email at contact@counterpointresearch.com) to schedule a meeting with him.
Session Theme: “Right to Repair/Refurbishment products perspective” Date: 18th May 2022 Time: 16:10- 17:10
Refurbished smartphones are cost-effective alternatives for consumers looking to save money when buying a smartphone. Apple and Samsung are the top brands in this secondary smartphone market, allowing users to purchase popular flagship smartphones at a much lower cost. Even as shipments for the global market for new smartphones grew 4.5% YoY in 2021, shipments for the global refurbished smartphone market witnessed 15% growth, according to Counterpoint Research’s Global Refurb Smartphone Tracker. Factors such as attractive trade-in programs, consumer awareness of sustainability, and certified pre-owned smartphones led to this growth.
In the latest episode of ‘The Counterpoint Podcast’, host Maurice Klaehne is joined by Research Director Jeff Fieldhackand Senior Research Analyst Glen Cardoza to discuss the refurbished smartphone market. The insightful discussion focuses on key topics highlighting the refurbished market performance in 2021, key regions contributing to the growth, and key OEMs. The three also touch upon topics like geopolitics, sustainability, right to repair movement, and much more.
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