Competition Heating Up for Refurbished Smartphones in Mature Markets

that’s expected to reach 120 million units and equivalent wholesale revenue of $14 billion in 2017, up from 56 million and equivalent revenue of $7 billion last year, Gartner said. Consumers in mature markets are upgrading smartphones on average every 18-20 months, Gartner analyst Meike Escherich said, and of the replaced devices, 7 percent are recycled, 23 percent are given to other users and 41 percent are traded in or sold privately. With nearly two-thirds of replaced smartphones being reused, continued demand for high-end used devices will increasingly affect new product sales, leading phone providers to look for opportunities in the secondhand market, Escherich said. In North America and Western Europe, the market for refurbished phones is forecast to be worth $3 billion this year, growing to $5 billion in 2017, with buyers attracted to used high-end devices that they wouldn't have been able to buy at the original selling price. The growing number of privately sold phones will stir up competition in the take-back market and drive wireless providers and refurbishers to grow business through aggressive marketing campaigns and compelling incentives that appeal to tech enthusiasts, Escherich said. Fifty-three percent of U.S. respondents who identified as enthusiasts said they would replace their smartphones in the next 12 months, while 56 percent said their current phones were less than a year old, she said. Tech enthusiasts are important to handset makers because their trade-ins provide channel partners with hardware that can be reused for warranty replacements, she said, “and for extending the brand reach" to users who can’t afford new phone pricing. The survey was done in June 2014 among 5,600 U.S. and German consumers.