The iPhone owned a commanding 49% share of the global refurbished smartphone market in 2022
If you're looking to buy a phone that you really, really love but is really, really out of your budget range, you might want to consider buying a refurbished model of the phone. Refurbished phones are previously used handsets that have been cleaned up with damaged parts replaced and a new battery added. According to Counterpoint Research, the iPhone has a commanding 49% market share of the global refurbished (or secondary) smartphone market followed by Samsung's 26%.
Overall, the refurbished smartphone market saw sales grow 5% worldwide in 2022 despite a 17% decline in China. Not surprisingly, India led the way with 19% growth as the developing country is also the world's second-largest smartphone market. That means interest in smartphones in the country is hot and heavy even if consumers don't have the same amount of money to spend on new flagship phones as consumers in other countries have.
The iPhone is the fastest-growing brand in the global secondary smartphone market
Apple's global sales of refurbished phones rose 16% on an annual basis in 2022 and the iPhone is the fastest-growing brand in the used and secondary smartphone market. While this growth is impacting sales of new iPhone models, it can only improve Apple's Services revenue since those purchasing refurbished iPhone units can still buy apps and subscribe to certain Apple services. Sales of refurbished Samsung phones declined as a small percentage of Android users in the secondary market switched to iOS last year.
In 2022, as in 2021, Apple and Samsung were the top two smartphone brands in the refurbished smartphone market
Interestingly, Counterpoint says that the demand for refurbished smartphones is coming from new smartphone buyers in mature markets and from feature phone users switching to smartphones in emerging markets. Supplies of refurbished smartphones are increasingly coming from specialized retailers focusing on the sales of these devices. But also involved these days are some carriers and phone manufacturers who are now offering refurbished phones for sale.
For example, Apple sells certified pre-owned refurbished iPhone units although it is currently limited to the iPhone 12 Pro Max. And Verizon has a selection of certified pre-owned phones as does T-Mobile and AT&T.
The Average Selling Price (ASP) of smartphones in the secondary market picked up last year as a larger share of sales in this market consisted of refurbished flagship and premium models. The ASP of new smartphones has been going up which has led consumers to hold on to their new phones for longer periods of time which has led to a shortage of phones to sell in the secondary market.
Over the last few years, sales of refurbished smartphones have outperformed sales of refurbished models. In 2019, sales of new phones declined 2% compared to a 1% decline for refurbished smartphones. The next year, new phone sales declined by 12% while sales of refurbished models rose 5%. Both new and refurbished handsets had sales gains in 2021 of 5% and 14% respectively. Last year was a return to 2020's numbers with new sales down 12% and refurbished sales up 5%.
5G phones made up 13% of the secondary market last year and is expected to rise this year
Apple saw its market share in the secondary market rise from 44% in 2021 to 49% last year. Samsung's share in this market declined to 26% last year from 28% in 2021. After Apple and Samsung, the rest of the secondary market is made up of brands with tiny slivers of the secondary market. Vivo and Oppo each kept their 3% share of the market in 2022 while Huawei's declined from 4% to 3%.
As for 5G, Counterpoint Senior Analyst Glen Cardoza said, "...demand for 5G is increasing, especially in mature markets like the US, Europe, and Japan. In 2022, 5G made up 13% of global refurbished sales." This year, Counterpoint forecasts 5G phones to grab a larger portion of the secondary smartphone market and as a result, 4G phones could lose more of their value at a faster rate.
In addition, with consumers trading in their phones at a faster clip and moving toward premium phones, Counterpoint says that "the inventory of low-grade used smartphones may grow significantly." As for those firms in the business of selling refurbished smartphones, the report says that "Apple's iPhones remained the most sought-after smartphones due to the brand perception, high margins, and high inventory turnover ratios."
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