There’s a growing trend of awareness in buying electronic gadgets and devices. Instead of buying newer phone models each year and spending hundreds of dollars for smart phones that offer incremental upgrades in terms of feature and hardware, consumers are either buying refurbished smart phones or choosing to stick to their current devices for longer.
In the latest Refurbished Smartphone report from Counterpoint, the market for refurbished products have risen up thirteen percent in 2017, which equals roughly 140 million units. Coincidentally, the growth of new smartphone devices have only gained 3 percent in the same year.
What Are The Factors Driving The Refurbished Market?
In 2016, there was an anticipated slowdown in the global mobile phone market industry due to the decreasing number of new buyers in Europe, US and China. Large companies have tried to compensate for this by opening the refurbished product option at a lower price.
There’s also the ever-rising cost factor of newer, more economic models coming out each year. As competition grows, so do the marketing tactics; newer phone manufacturers such as OPPO, Vivo and Xiaomi have opted to target budget consumers and thus became the fastest growing brands in 2017.
Changes In The Industry And Company Policies
Samsung and Apple’s dominance reels toward the refurbished market. For companies and stakeholders, the profit margin on a refurbished phone is greater than that of a new one. Therefore, it makes total sense for brands to start selling refurbished units and gain revenue. Companies have also now realized that the refurbished market is one way to offset the failing new phone industry, quickly offering buyback programs, trade-in bargain deals and other platforms for consumers. The turnover rate improves, the revenue coming from used phones increase and both companies and consumers are happy.
Here are a few examples of recycling programs by global smart phone companies:
Samsung Responsible Recycling. The Singapore giant now offers responsible and convenient takeback options on almost all their consumer goods and electronic products.
Apple GiveBack. You get a tempting trade-in offer and estimate when you turn in your old Apple device, usually in the form of a partial refund or an Apple Store gift card.
Motorola Mobility. Operates various takeback platforms in partnership with recyclers, partner retailers and carriers.
Major operators such as Apple and other OEMs and major cellular networks are now adding full lifecycle services along with their plans. Data analytics predict a particular smart phone’s resale value, which provides consumers buyback options and gives them the ability to trade in their device for a newer one at a fraction of the price.
What Effect Does It Have In The Future?
Response rate is significantly higher in countries Europe and the U.S., with India, SouthEast Asia and Africa quickly growing. It’s safe to say that the trend will continue on and grow in popularity.
According to an IDC report, the refurbished smartphone market is expected to top $52 billion in global profits over the next five years. Furthermore, the 2018-2022 prediction from IDC, titled Used Smartphone Forecast, has stated that by 2022 each smartphone will have an average selling price of $180. As the new mobile phone market slows down, companies may take a more cautious approach when it comes to putting out newer models. The e-waste problem slows down and recycling can finally catch up.
The Advantages Of The Refurbished Revolution
The most compelling advantage in the refurbished market is the cost of acquiring an electronic product. Consumers will now have the ability to buy any kind of appliance, device or electronic gadget at a fraction of the price it takes to buy a new unit. Popular items such as TVs, digital cameras, mobile phones, laptops and PCs are often slashed up to 50% off, which makes them more desirable.
Businesses both big and small can now save on costs they can use somewhere else. Buying refurbished also means the company is responsible and understands the importance of maximizing use of valuable resources in an effort to be “green”.
Every individual who buys refurbished products impact the environment in a good way. The longer a gadget’s lifetime is extended, the lesser the manufacturing impact, which greatly improves sustainability. As demand for new phones are reduced, consumers become more aware of the e-waste crisis and are now conscious of how they dispose of their old electrical devices and appliances. The fewer items bought, the lesser the greenhouse gas emissions and use of valuable resources.
The data shows that indeed, the refurbished phone market is growing by leaps and bounds. Buying used gives both companies and their consumers greater financial flexibility and creates awareness. There’s no reason why this trend shouldn’t continue as it presents a more viable way of life and has the potential to reduce e-waste to a manageable number.
Freestyll are a UK based Refurbished Apple specialist for Consumers, Schools and Business.