The global refurbished smartphone market saw healthy growth across most regions in the second half of 2020. The market more than made up for the slump in the first half of 2020 with a modest 4% increase in 2020 compared to 2019 volumes. Counterpoint expects a higher increase in 2021.
The Surge in the second half of 2020
Due to the sharp deceleration in the first half of 2020, mainly due to COVID-19, the refurbished smartphone market saw a rise in demand and supply in the second half of 2020. Commenting on the dynamics of the market, Senior Research Analyst Glen Cardoza said: “While there was limited supply of smartphones in the secondary market in the first half of 2020, there was a sharp increase in both demand and supply during the second half of 2020. When the markets opened, most refurb players saw a surge in resell volumes and trade-ins. All regions saw YoY volume increases in the second half of 2020. While some markets like LATAM and Southeast Asia took time to recuperate in the second half of 2020, other regions like the US, Europe, India, and Africa bounced back and tried to increase supply and distribution-related activities.”
Highlighting that Apple had gained share in the secondary market, Research Director Jeff Fieldhacksaid: “There has been no slowdown in the appetite for Apple within the secondary market. In fact, over the past year, it has increased compared to its competitors. Apple’s share in the global market for new smartphones was just over 13% in the second half of 2020. Its share in the secondary market over the same period was over 44%. In addition, Apple’s secondary market ASPs (average selling prices) are almost three times higher than the average of all its competitors. Even with the rollout of 5G by over 150 mobile operators in over 70 countries, the demand and ASPs for Apple’s refurbished LTE portfolio remain elevated. This is helping Apple grow its installed base as many of the Apple buyers in the secondary market are first-time buyers.”
Additional trade-in offers and a focused approach on circular economy initiatives are fueling the demand in developed regions like Europe. In contrast, developing regions like India and Africa are showing a higher proportion of new businesses and improvements in domestic tech and repair capabilities. Cardoza added, “China is slowly becoming a more difficult market for the secondary market. There is still high demand, but costs have increased for key components. Also, there is more oversight at international ports. The China–US trade war has also added more risk, making many buyers more conservative in their purchases. We expect more secondary market volumes to move to other areas such as Africa, Japan, India, and Europe. There are established secondary market companies, with new companies also moving into these regions. There is also an appetite for flagships from premium brands but at mid-tier pricing.”