The used smartphone market will almost triple by 2020 as trade-in programmes go global, according to market watcher International Data Corporation (IDC).
The research firm expects the global market for used smartphones to grow at a 22.3% CAGR, increasing from 81.3 million in 2015 to 222.6 million units to 2020.
By 2020, the used smartphone market is expected to worth about $30bn, with an average selling price of $136.
Major carriers, retailers, and various online retailers (e-tailers) in the US have implemented some type of trade-in strategy or platform to purchase used devices at a deep discount, IDC said.
Carriers in Western Europe and Asia are also following the programmes from the past three to five years.
IDC mobile phones programme research manager Anthony Scarsella said the demand for refurbished smartphones is already becoming constrained in countries such as the US.
Scarsella said: “Mobile operators are the most constrained given the need for replacement devices for customers who have purchased device insurance plans. In addition, used handsets provide an additional option for customers with subprime credit making them ineligible for equipment installment plans.”
IDC Mobile Phones programme director Will Stofega says the used smartphone market will affect OEMs, mobile operators, and component suppliers.
Stofega noted that IDC has committed new resources to help customers understand and plan for this new and potentially disruptive force.
“Although there is a potential downside to mobile ecosystem suppliers, IDC believes that the used smartphone market also presents new opportunities to grow revenue and increase market share,” he says.
IDC defined a refurbished smartphone as one that has been used or disposed of at a collection point, sent to a facility for reconditioning, and then sold through a secondary market. It doesn’t count a hand-me-down device.