The Multi-Billion Dollar Industry You’ve Never Heard Of
Why Refurbished Smartphones Have Such a Great Future
Smartphones have seen consistently high demand in the past five years, and that has produced at least three significant effects:
1) The global increase in the supply of smartphones from OEMs;
2) The establishment and subsequent expansion of the smartphone market itself; and
3) The worldwide increase in the supply of used smartphones.
These point towards the increasing permanence of smartphones in society and as a primary submarket of the consumer electronics sector. But the interplay between these three factors are of much higher importance, generating an affluent market for used smartphones and producing the following effects:
· Encouraging an annual replacement cycle for smartphones which leads to guaranteed yearly sales;
· Increasingly affordable second-hand smartphones (i.e. relative to respective original going prices);
· An expansion of the Used Smartphone Market due to the increase in availability in both distribution and price.
Today, the Used Smartphone Sector is one of the fastest-growing markets in the world, with recent projections estimating the market to reach as high as 30 billion in 2020. To learn how you can take full advantage of this market for fast financial growth, watch this video about Galaxy eSolutions (GES) and our unique business model.
Key Findings of the Deloitte and IDC Reports Confirm Our View
In 2015, Deloitte published a report on the Used Smartphones Market which measured its key components and the nature of the demands which drive its growth. Initial valuations that year reported some 80 million smartphones traded, and a value of 11 billion USD, which earmarked the average value per device at $135, with variations depending on model and market.
The report forecasted that these figures would hit a dramatic increase to 120 million smartphones traded in 2016, a jump to 17 billion USD in global market value, and a hike in the average value per device to $140 in 2016. The market itself was geared to “grow four-five times faster than the overall smartphone market,” the report concludes.
The recent 2017 IDC report confirmed that the Used Smartphones Market quickly hit the 17 billion USD mark in 2016, and grew exponentially from that point on to 21 billion USD in global revenue as early as June 2017.
Likewise, figures for refurbished smartphones traded also reached the 120 million mark for 2016, and 140 million for 2017, making the average value per device this year around $150. These amount to nearly 50% year-on-year growth on all measurements cited, consistent with the findings of the Deloitte Report.
The Feasibility of Refurbished Smartphones
This dramatic expansion of the Used Smartphone Market is not surprising, in light of the convenience offered by second-hand handsets in general, and refurbished smartphones in particular. Refurbished smartphones typically have the same aesthetic value and provide the same features and capabilities as their brand-new counterparts. But regarding price, refurbished phones go for much lower, and are more economical choices as such.
Even premium models become more affordable for most buyers as refurbished phones, and will “end up having three or more owners before being retired, and will still be used actively in 2020 and beyond,” Deloitte predicts. Refurbished smartphones appeal best to 1) cost-conscious buyers who want reliability and quality all the same; 2) users currently looking for a second or third phone.
Used Smartphones: Demand Profile
Both the IDC and Deloitte reports give credit for the rapid growth of the Used Smartphone Market to the high demand for refurbished smartphones. Specifically, the following consumer and market trends have been purported to increase global demand:
· Price has become the top consideration among consumers when buying smartphones;
· There’s an emerging need to have separate phones for work and personal use, where ownership of two to three phones per user is increasingly becoming the norm;
· Decreasing communications costs, in general, encourage families to buy smartphones for individual members, including their kids;
· The proliferation of novel mobile gaming genres (e.g. Pokemon Go) promote ownership of multiple phones per user to perform specific in-game tasks (e.g. to play in Arenas);
· Going by market size, the sector for smartphones (including brand-new handsets) within the 200 to 400 USD range is far more significant than any industry, primarily due to their affordability;
· Annual releases from OEMs contribute to high replacement rates globally;
· Smartphones are increasingly becoming part of the IT budget of companies.
50% of users surveyed by the IDC reported having changed phones anywhere from fewer than six months to a year. Also, roughly 80% of the poll population claimed that their companies purchase new phones for their employees anywhere from a minimum of 1 year to a maximum of 3 years. In keeping with this, global interest in refurbished smartphones has generally increased, with no signs of abating. The graph below shows worldwide interest on refurbished iPhones over the last few years:
2020 Forecast
Both the IDC and Deloitte see the upswing in demand for refurbished smartphones as doubling year-on-year, at least until 2020. Here are their key predictions:
· Used smartphone retail rates will accelerate even further through 2020 as users and resellers increasingly embrace the sale and acquisition of second-hand/refurbished phones;
· The market for refurbished smartphones alone will be worth 30 billion USD;
· Used smartphone trade-ins and shipments will reach 225 million;
· The growth rate of the market will be 4 to 5 times higher than for new smartphones;
· Corporate IT Managers will look to used phones as viable loaners and replacements.
These trends and more point to the sustained growth and expansion of the Used Smartphones Market in the foreseeable future.
Unique Opportunities for Galaxy eSolutions
The auspicious projections above mean high potential profit margins for those within the Used Smartphones Market ecosystem, especially for collectors, refurbishers, resellers of refurbished phones, who are directly involved with the supply and demand aspects of the market.
And this is why GES is in a unique and exceptionally profitable position within the market. Its ownership over sourcing, refurbishing, and distribution gives it more control over the business process, which results in cost efficiencies and more revenue in the long run.
If you partner with us today through our ICO program, you’ll gain access and direct benefits from a highly profitable market. Visit our GES website to learn more about the fantastic opportunities for growth available to you today.
