A new IDC report predicts the used smartphone market will hit $52.7 billion over the next five years, with the average resale price reaching $180.
Refurbished smartphones are going to continue to grow in popularity over the next five years and will top $52 billion worldwide, according to a new IDC report.
The study, titled Worldwide Used Smartphone Forecast, 2018-2022, looks at the expansion and growth expected in the market through 2022. The overall market is expected to reach an estimated $52.7 billion by 2022, and each phone will sell for an average of $180, according to Anthony Scarsella, research manager for IDC's mobile phone program.
One factor having an impact on the mobile phone market is the high price of new phones. Apple's iPhone X with 256GB is a whopping $1,149, and the Samsung Galaxy S9 with 256GB is $949.
This is leading more buyers to opt for used phones, and, even if someone chooses to keep their current phone, they're keeping it about three months longer than in the past. "The upgrade cycles in mature markets typically go from 24-25 months the last time we did this forecast, now they're closer to 27 months and 28 months," Scarsella said.
SEE: BYOD (bring-your-own-device) policy (Tech Pro Research)
"Now that the phone's $900 to $1,000, [people say] 'I paid so much for this phone, I'm going to keep it a little longer.' Not only that, $1,000 devices, honestly they're built better. They have more premium materials, premium designs, premium screens. Both Android and iOS have done better with software updates. So the phones are just lasting longer too. So that all plays into it," Scarsella said.
And the higher starting price for phones is resulting in higher resale prices because the value doesn't drop as fast, he said.
IDC predicted in its 2016-2020 study on used smartphones that refurbished smartphone sales would grow from 81.3 million devices worldwide in 2015 to 222.6 million devices in 2020, representing a compound annual growth rate (CAGR) of 22.3%. The new report updates these numbers, and details will be released next week.
Scarsella gave a sneak peek and said the growth rate of future smartphone sales as reported in the new study is "not too drastically different" as reported in the 2016-2020 study.
The advent of 5G phones is noted in the new report. "The last forecast didn't have anything on 5G. In 2019, we expect the first batch of 5G devices coming in. And that's going to give the market a little boost as well," Scarsella said.
IDC defines a refurbished smartphone as a device that has been used and disposed of at a collection point by its owner. The smartphone is then sent to a facility for reconditioning and is sold via a secondary market channel such as ecoATM/Gazelle. A refurbished smartphone is not one that someone has sold to another individual in a private sale or trade.
While the biggest markets for refurbished phones are secondary markets in developing countries outside of the US, there is plenty of potential for the enterprise to take advantage of these full-featured yet lower-priced phones as options for employees.
The big takeaways for tech leaders:
- IDC reports the overall used smartphone market is expected to reach an estimated $52.7 billion by 2022.
- The average used smartphone will sell for $180 in 2022, a significant jump from the $136 in 2020 that a previous IDC study predicted.
- How ecoATM Gazelle turns more than 4 million recycled smartphones into quick cash every year (TechRepublic)
- That used iPhone? Here's what happens before you buy it (CNET)
- Tips for buying used and unlocked phones (ZDNet)
- Discover the Corning plant where Gorilla Glass was developed (TechRepublic)
- The ridiculous profit made from replacing cracked smartphone screens (TechRepublic)
- Amazon Trade-In: Fair value for your iPhone or scam? (ZDNet)