Downsizing expected growth for second hand smartphones
With the price tag for smartphones climbing, people hold on to their phones longer which dampens markets for both new and used smartphones, according to a new forecast that is downsizing the market growth for second hand phones by 2.7%.
“Although the secondary market growth looks impressive compared to the new market, which continues to struggle, growth rates are slowing from our previous forecast. Moreover, the lack of inventory has also impacted each region’s total available market for used devices”, International Data Corporation (IDC) says.
Worldwide shipments of used smartphones will reach 431.1 million units in 2027, with a compound annual growth rate (CAGR) of 8.8% from 2022 to 2027. In 2023, the second hand market is expected to have been 309.4 million units, up 9.5%, the IDC forecast shows.
“Supply of used smartphones remains a critical challenge as refresh cycles, high price points, and macroeconomic challenges have all negatively impacted the new smartphone market. However, demand for used smartphones remains healthy and will continue to grow throughout the forecast period, just at a slower rate than previously forecast, thanks to the challenge of acquiring inventory”, the forecast says.
New smartphone shipments are estimated to have shrunk 3.5% in 2023 as demand, inflation, and political unrest continue to impact the global economy.
“In contrast, the used market demonstrated fierce resilience to overcome these unforeseen circumstances by displaying nearly 10% growth for the year. Refresh rates for new phones in most developed markets have extended past 40 months, which has caused a shortage of available inventory for the secondary market. Trade-in programs continue to fuel the industry but only make up a portion of the total used inventory.”
Although the secondary market growth looks impressive compared to the new market, which continues to struggle, growth rates are slowing from our previous forecast.
“Despite the near 10% growth, the secondary market is showing signs of slowdown due to a genuine lack of inventory,” says Anthony Scarsella, IDC research manager.
“With refresh rates extending in most mature markets, acquiring inventory remains the biggest challenge for resellers. Secondary phone retailers are hungry for inventory as the high end of the market continues to be scarce due to customers just holding on to their devices. This lengthening can also be witnessed in the new market where shipments declined 3.5% for 2023.”
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