Shipments of used smartphones, including officially refurbished and used devices, hit 282.6 million units in 2022, up 11.5% from the 253.4 million units shipped in 2021, according to the latest study from the IDC. Growth should continue looking forward, with shipments projected to reach 413.3 million units in 2026, translating into a compound annual growth rate (cagr) of 10.3% from 2021 to 2026.
These increases were primarily driven by the launch of new trade-in programs. Trade-in promotions in developed markets such as the US, Canada, and Western Europe helped to both speed up refresh cycles and drive up the value of used devices. In developing markets, trade-in values also increased, which further drove phone upgrades.
In general, the increased sale of higher-priced devices created a circular effect as many of the more aggressive trade-in deals were only available for premium devices.
As the cost of new smartphones has gone up, so has the general life expectancy of these devices. As a result, trade-in programs have become a popular with operators looking to capitalize on the latest devices to attract customers.
When considering the mainstreaming of such trade-in programs, the aforementioned increased resilience of newer mobile devices and continued global economic turmoil, it should not be surprising that the used smartphone market is not only thriving but expected to grow substantially over the next several years.
In designing promotions and new offers, both sides of this market present opportunities to operators. High-value consumers can be incentivized to purchase new smartphones more frequently with aggressive trade-in deals—with each of these purchases representing an opportunity to upsell the user on a new plan or add in additional lines. At the same time, the losses from these trade-ins can be offset by reselling the devices to more budget-conscious consumer—either directly or in another market. Thus, the mobile carrier can monetize both ends of the transaction for these types of trade-in deals.