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
San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul
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 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:
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Background:
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.
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Tom Kang
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