Refurbished iPhone Volumes Surge 16% YoY Globally in 2022

The global market for refurbished smartphones witnessed a remarkable growth of 5% YoY in 2022, fueled by increasing demand across various regions. However, China experienced a significant decline of 17% YoY in refurbished smartphone sales. Counterpoint Research’s Global Refurb Smartphone Tracker reveals that Apple dominated the global refurbished smartphone market, capturing a commanding 49% share, while Samsung secured a respectable 26%. Notably, India and LATAM emerged as the key growth leaders, exhibiting 19% and 18% YoY growth, respectively. Furthermore, the prevalence of 5G technology is on the rise within the secondary markets, constituting 13% of global refurbished sales.

1. China’s Decline and Regional Growth: Despite the overall growth in refurbished smartphone sales worldwide, China faced a substantial setback with a 17% YoY decline. This was primarily attributed to the resurgence of COVID-19 and the introduction of “COVID-Zero” policies, impacting business operations and demand within the country. On the other hand, India spearheaded the global refurbished smartphone market, boasting a remarkable 19% YoY growth, closely followed by LATAM with 18% YoY growth.
2. Apple’s Dominance and Impact on New iPhone Sales: Apple experienced an impressive 16% YoY increase in volumes, solidifying its position as the leading brand in the used and refurbished smartphone sectors worldwide. This surge in demand for refurbished Apple devices is affecting new iPhone sales and service revenues in several markets. Additionally, the supply shortage primarily affects the availability of refurbished iPhones in the market.
3. Samsung’s Market Share and the Shift to iOS: Samsung’s market share decreased from 28% in 2021 to 26% in 2022 within the secondary market. This decline can be attributed to a small but noticeable percentage shift of Android consumers migrating to iOS, thereby impacting Samsung’s refurbished sales. This trend is expected to continue in 2023.
4. Factors Driving Refurbished Smartphone Demand: The demand for refurbished smartphones stems from several factors, including mature market new smartphone buyers, feature phone users transitioning to smartphones in emerging markets, and unofficial channels relying on C2C or hand-me-downs.
5. Sources of Supply: Refurbished smartphone supply primarily comes from refurbished smartphone retailers, who are witnessing significant growth. Carriers have also begun offering refurbished options, particularly in mature markets. Original Equipment Manufacturers (OEMs), however, face challenges in collecting and reselling refurbished smartphones.
6. Shifting Consumer Preferences and Environmental Awareness: A noteworthy shift in consumer preferences has been observed, with a larger share of consumers opting for premium and flagship refurbished smartphones, resulting in increased average selling prices (ASPs) in the secondary market. Moreover, consumer trust in refurbished smartphones has grown across various markets, thanks to evolving business models and effective marketing strategies adopted by refurbished players. Trade-in volumes have also reached record highs.
7. Holding Periods for New Smartphones and Supply Constraints: Globally, the holding periods for new smartphones have increased, leading consumers to retain their devices for longer durations. This trend, coupled with rising ASPs for new smartphones, has limited the availability of devices in the secondary market.
8. Impact on Global Trade and the Rise of Domestic Refurbishment Ecosystems: Transport, trade, and logistics on global trade routes were significantly affected by the closure of major hubs like China in 2022. Supply levels, particularly for Grade A refurbished smartphones, experienced a decline. This shift has led to the growth of domestic repair and refurbishment ecosystems in various markets, diminishing China’s imports and exports and prompting domestic players to focus on expansion, partnerships, and alternative supply channels.
9. Carrier and Retail Dynamics in Mature Markets: Large players within the secondary market ecosystem fared better than smaller ones in the supply-constrained year of 2022, owing to better supply arrangements. Global carriers and their partners witnessed higher collection volumes, gaining more influence in the secondary market. Additionally, certified pre-owned volumes declined in 2022, as consumers favored lower-cost options, even if they came with slight imperfections. Reselling CPO-grade devices, apart from Apple, became economically challenging for other handset OEMs.
10. Outlook for 2023: Many of the transformations witnessed in the secondary markets during 2022 are expected to continue into 2023. The share of 5G smartphones is projected to increase substantially, potentially accelerating the devaluation of 4G smartphones. As trade-ins rise and consumers shift toward premium devices, the inventory of low-grade used smartphones may experience significant growth. Consequently, opportunities in end-of-life activities such as disassembly, logistics, warehousing, recycling, and e-waste disposal are likely to expand. IT asset disposition (ITAD) businesses may also benefit from this favorable outlook.

Conclusion:

The global market for refurbished smartphones exhibited strong growth in 2022, with Apple dominating the space and India leading the pack in terms of market growth. Samsung faced challenges due to a shift in consumer preferences toward iOS. As the demand for refurbished smartphones continues to surge, the industry faces supply constraints, necessitating the growth of domestic refurbishment ecosystems and alternate supply avenues. The year 2023 is expected to witness significant changes, including the rise of 5G smartphones and a potential surge in low-grade used devices, presenting new opportunities in the secondary market.