Used smartphones are gaining traction – half a billion shipments expected by 2026

Sales of used smartphones are higher than ever, with over 282 million used phones reportedly sold throughout 2022.
27 January 2023

Shipments of used smartphones could reach half a billion in three years (Photo by Kirill KUDRYAVTSEV / AFP)

As with the personal computer market, 2022 was a horrible year for the global smartphone market — except for used smartphones. On top of recording the largest-ever decline in a single quarter between October and December 2022, worldwide smartphone shipments saw a steep fall last year, representing the lowest annual total since 2013. International Data Corporation (IDC) attributed the grim performances to significantly dampened consumer demand, inflation, and economic uncertainties. 

But those are also factors that led to used smartphones being preferred more. For billions of people worldwide, owning a smartphone is still prohibitively expensive, so they opted for used and refurbished smartphones instead. The market for used smartphones has been rising gradually, despite the global smartphone market diving last year.

Demand plummeted for brand-new smartphones in 2022. As per IDC’s report, the worldwide shipment of used smartphones, including officially refurbished and used smartphones, reached 282.6 million units in 2022. The size of that demand reflects an 11.5% increase over the 253.4 million units shipped in 2021. In contrast, 2022 ended with shipments of 1.21 billion units of new smartphones, a steep 11.3% decline for the year. 

IDC’s Worldwide Quarterly Mobile Phone Tracker research manager Anthony Scarsella noted that the used market was able to grow 11.5% in 2022 thanks to the 6.1% rebound witnessed in the new market in 2021. “Used devices demonstrate more resilience to market inhibitors than new smartphone sales as consumer appetite remains elevated in many regions,” he added.

Scarsella also noted that attractive price points are critical for growth as cost savings remain the primary benefit. “However, a high-end inventory struggle due to elongated refresh cycles in the new market has used prices growing over 11% in 2022.” For brand-new smartphones, IDC’s report shows that it represented the lowest annual shipment total since 2013, due to significantly dampened consumer demand, inflation, and economic uncertainties. 

The low shipment factors could well be why used and refurbished smartphones have seen an uptick in sales and shipments. According to IDC’s taxonomy, a refurbished smartphone is a device used and disposed of at a collection point by its owner. Once the device has been examined and classified as suitable for refurbishment, it is sent off to a facility for reconditioning and is eventually sold via a secondary market channel. A refurbished smartphone is not a “hand-me-down” or gained due to a person-to-person sale or trade.

The used smartphones era

IDC expects the growth to continue as the firm forecasts 413.3 million units of used smartphones to be shipped by 2026, with a compound annual growth rate (CAGR) of 10.3% from 2021 to 2026. Trade-in programs continue to be the driving factor for the new and used smartphone market globally.

“We have witnessed new programs launch successfully across multiple regional markets where trade-in is still a new concept for local consumers. Additionally, in mature markets such as the US, Canada, and Western Europe, trade-in continues to play a significant role in speeding up refresh cycles through telco and retail-driven promotions. This has contributed to an increase in trade-in value (TIV), typical when demand for new devices is slow,” the report stated. 

Essentially, the rise in TIV has pushed prices up in the secondary market due to consumers getting more for their old devices to help drive upgrades. To top it off, IDC believes that the increased sale of higher-priced devices in the new market has created a circular effect, as many of these aggressive trade-in deals feature primarily on premium devices. 

“How long these aggressive trade-in offers last remains a big question for buyers and sellers. Eventually, narrow margins will impact the overall profits of the channel, vendor, or perhaps both,” IDC added.