Turnover rates of old to new smartphones are slowing down in 2019, which makes total sense as consumers are more cautious of pulling the trigger and spending a thousand dollars over a new model device.
Refurbished Smartphone Industry On The Rise
It all started in 2017, when consumers started choosing refurbished units over brand-new mobile phones. According to the report made by Counterpoint, the global refurbished market grew by 13 percent, which accounts for approximately 140 million products. Back Market U.S. coordinator Serge Verdoux states that the figure could get closer to around 22 percent.
The website Back Market was established in 2014 and handled aggregrate sales of refurbished electronics in Europe. In 2018, the site started handling U.S. customers and discovered the high demand for refurbished smartphones. Furthermore, the site found out that sales for refurbished electronics were about ten times as much as its Europe-based counterpart in the same six-month span.
What Are The Factors Revving Up Refurbs?
In 2016, data showed a forecasted slowdown in the mobile phone industry, more notably the lack of new phone buyers in regions Europe, China and the United States. Companies turned their attention to other markets to compensate for the potential loss of profit. To match the financial capabilities and expectations of the consumers, smartphone manufacturers turned to refurbished as a way to sell at a lower price without losing sales or profits.
The problem with this was that there were other smartphone companies who dominated this part of the market. Competition came from makers such as Xiaomi, OPPO and the like, who dominated with their budget offerings. In the fourth quarter of 2017, these companies were touted as the fastest growing brands according to the Global Smartphone Shipments Ranking and Market Share (https://www.counterpointresearch.com/apple-surpassed-samsung-become-number-one-smartphone-brand-4q-2017/)
One factor that drives the refurbished market growth is the fact that shareholders are keen on maximizing the lifetime value of smart phones when they realized that there's money to be had in refurbished models.
Companies Introduce Refurbished Policies and Systems
Profit potential hasn't been lost with tech giants such as Samsung and Apple. These brands are major players in the refurbished niche, and each one has their own robust platform for collecting and selling refurbished products in many countries. Some of the better known model units that are getting a second life include the Galaxy S and the older iPhones.
Making some headway into the refurbished industry is a wise move to compensate for the loss of sales in the new phone department. Mobile network giants and carriers have been doing it for years, offering rebates and promos for older phones in a trade-in procedure. Increased turnover rate is better for both consumer and phone manufacturer alike, as brands get the revenue they need while satisfying the economic demands of the public.
What's more, there are various recycling and take-back programs that make it easy to give your older device in exchange for a small amount of cash or a discount towards a refurbished model. Take a look at the following:
Samsung Responsible Recycling. Offers convenient take-back options on various electronic products.
Apple GiveBack. You get a competitive offer for a trade-in. Any eligible device may be inspected at an authorized Apple Store. If successful, you get a refund or an Apple Store gift card for your troubles.
Motorola Mobility. Has a few take back programs with recyclers, retailers, carriers and consumers.
The greatest response came in from Europe and the US, with rapidly emerging markets in India, Southeast Asia and Africa. All major mobile network operators have come up with initiatives to include full life cycle services.
What Effect May The Emerging Industry Have For The Future?
Consumers can look forward to being able to get a buyback for their current device at any point during their ownership. Possibly via manufacturers or independent specialists like Freestyll – which specialises in refurbished Apple products.
High costs of upgrading to the newer models can be offset a bit, which helps improve sales and turn the economy.
Refurbished units will continue to grow as they provide a win-win for both sides. According the newest IDC report, the market will grow up to $52 billion over the next 5 years.
The Switch to Refurbished Has Its Advantages
The lower price is the biggest benefit of buying refurbished. Consumers can now buy almost any kind of electronic appliance, item or device at a much lower cost than a brand-new one. Businesses can get refurbished TVs, tablets, laptops and smartphones and save money for use on other assets.
Buying refurbished is better for the environment in a number of ways. One, manufacture impact is slowed down; two, the less electronic items we buy, the lesser the amount of e-waste we produce. Last, less devices made equal less raw materials used, fuel and greenhouse gas emissions.
Refurbished is here to stay for the considerable future. The benefits it has on the environment, the consumer and the smartphone brands are many and they are all positive. Buying refurbished means you save money and help save Mother Nature as well. For this reason the trend can only head one way- up!
