Tech analyst IDC is forecasting that shipments of used and refurbished smartphones will rise from 283 million in 2022 to 413 million in 2016 thanks to the success of trade-in programs.
Shipments of used smartphones will have a compound annual growth rate (CAGR) of 10.3% from 2021 to 2026 and will bea market worth $99 billion, according to IDC. In 2022, used smartphone shipments of 283 million represented an 11.5% increase over the 253.4 million units shipped in 2021.
Growth in shipments of new smartphones has remained low since the pandemic, and have since been hampered by supply chain issues and now consumers tightening spending amid recession fears. Even before the pandemic, consumers were holding on to phones for longer than two years.
Shipments of used smartphones look set to continue growing faster than new smartphones in coming years though from a lower base. The analyst is forecasting new smartphone shipments between 2023 and 2026 will have a CAGR of 0.5%, though the industry is expected to ship 1.2 billion smartphones in 2023. The industry shipped 1.24 billion new smartphones in 2022 and 1.39 billion in 2026.
IDC puts the growth of used and refurbished smartphone shipments down to the success of trade-in programs, which are offered by nearly all major smartphone vendors. It also means the used market is tied to trends in new smartphone shipments and whether consumers are trading up to newer models, which is also affected by trade-in values when a new model is released.
As IDC points out, in markets like North America and Western Europe, trade-in programs help speed up refresh cycles. It says trade-in values have increased, which typically happens when demand for new devices is slow. In turn, this pushed up prices in the secondary market as consumers get more for their old devices
Nearly all major smartphone brands now have trade-in programs. Apple kicked off its 'Reuse and Recycle' iPhone trade-in program in 2013.
"Signs of a maturing market - the used smartphone market set to grow at 10% 5-year CAGR outpacing the new smartphone market. This plays most favorably toward the high-end of the market, which means Apple benefits more than anyone (globally)," said IDC VP Ryan Reith in a tweet.
Unfortunately for bargain hunters, demand for used phones combined with efforts by vendors to drive sales of new phones via better trade-ins values means that used prices are on the rise.
"Used devices demonstrate more resilience to market inhibitors than new smartphone sales as consumer appetite remains elevated in many regions. Attractive price points are critical for growth as cost savings remain the primary benefit. However, a high-end inventory struggle due to elongated refresh cycles in the new market has used prices growing over 11% in 2022," notes Scarsella.