India and Africa are among the key regions that will drive sales of second-hand smartphones going ahead. The refurbished handset market in these regions is expanding on the back of improvements in domestic tech and repair capabilities, market analyst firm Counterpoint Research said.
“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,” Glen Cardoza, senior research analyst at Counterpoint Research, said.
Additional trade-in offers and a focused approach on circular economy initiatives are fuelling 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, he noted.
China is gradually becoming a more difficult place 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, Cardoza explained.
During the last calendar year, the first half witnessed a decline in sales. It rebounded slightly in the second half due to increases in new device sales and a very strong Apple iPhone launch cycle which helped the supply of devices in the secondary market. All major countries and regions showed a decline for the full year of 2020, mainly due to Covid-19.
“Global refurbished smartphone market saw healthy growth across most regions in H2 2020. The market more than made up for the slump in H1 2020 with a modest 4% increase in 2020 compared to 2019 volumes. Counterpoint expects a higher increase in 2021,” the agency said.
Due to the sharp deceleration in H1 2020, mainly due to Covid, the refurbished smartphone market saw a rise in demand and supply in H2 2020.
“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 Y-o-Y volume increases in H2 2020. While some markets like LATAM and southeast Asia took time to recuperate in H2 2020, other regions like the US, Europe, India, and Africa bounced back and tried to increase supply and distribution-related activities,” Cardoza said.
On Apple’s performance, Counterpoint’s research director Jeff Fieldhack said 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 H2 2020. Its share in the secondary market over the same period was over 44%.
Besides, its secondary market 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, he added.