A Look at the Secondary Market for Mobile Phones

60% of smartphone users, according to a survey on Germany and U.S consumers, usually upgrade their existing phones to acquire the latest phone in the market. While this helps drive the higher end of the market, they also significantly increase the circulation of second-hand devices. It could be easy to presume that the secondary mobile market is growing due to the increase in mobile phones. This may be the case, but other factors are encouraging this growth which includes;

1. Establishment of phone insurance plans and warranty extensions

The average price of a smartphone in the USA was estimated at around $567 in 2017. High-end phones such as Vertu going for as much as $88,000. However, with an extended warranty and phone insurance, consumers will be willing to purchase a pre-used high-end phone.  The growing insurance and warranty claims have created the need for high-end second-hand mobile phones.  

2.  Growing smartphone device demand in developing countries

There is ease of access to mobile phones in developing countries among middle and low-income people. This has created a secondary market for dealers and manufacturers to distribute high-end phones at pocket-friendly prices.

3. The green movement

With more manufacturers going green, recycling initiatives are on the rise. This only drives more secondhand mobile devices into the market.

The secondary market players and process

Collectors who source for used devices in mobile phone retail companies, charities, OEMs, among others. Next in line are the refurbishing companies, which remodel the device for release to the market. They do this by cleaning it, carrying out repairs as and when necessary, as well as upgrading its software. The refurbished devices are then handed over to intermediaries who later sell it to retailers. Retailing companies have come up with different ways of luring consumers to rid themselves of old redundant phones and tablets at a fee. In most cases, consumers do not incur any costs associated with the shipping of the old phones. Smartphones and tablets are preferred due to the ease to resell them.

The refurbishment process

A study has established a consumer trend of buying a refurbished phone from companies selling new phones as opposed to buying it from an independent company. This is because the former’s reputation is likely to influence the way the refurbished phone operates.

For a phone to be properly furnished, it has to be tested and graded. Wiping off any pre-existing data is also done, after which any part that is damaged is repaired or altogether replaced as is the case with external parts such as the battery and screen.  The device is then dismantled with parts such as mic, speaker, and motherboard being set aside for reassembly into the new device. These internal parts are also thoroughly cleaned to ascertain that no dust particles remain. Some refurbishing companies offer warranties on their refurbished devices. This is obviously less inclusive than the warranty that would be offered on new devices.

Before being released to the market, the devices have to be thoroughly tested and checked to establish whether they are in full working order. Tests on items such as the charging system, buttons, screen responsiveness, and network connectivity are carried out. All refurbishing companies are required to comply with the Data Protection Act, so the consumers are assured of a fresh start.

Why do people prefer to buy a refurbished phone?

Most people prefer to buy a refurbished phone for the simple reason that it is ultimately more affordable than a new one. Not everyone is capable of acquiring high-end devices in the market, and buying a refurbished phone is a cheaper way of having a sleek device with the same functionalities as a new one.  This is a good way of sticking with a preferred model if the preferred company may have launched a new model.

The future of Secondary Market for Mobile Phones

The secondary market for mobile phones will only rise if data from recent years is anything to go by as mobile companies continue launching cutting-edge devices at the latest Mobile World Congress in Barcelona.

Artificial intelligence seems to be this year’s main theme. Samsung’s Galaxy S9 and S9 Plus seem to be already dominating the event already, while the notched display of the iPhone X is being imitated. Smaller brands such as Alcatel and STK are also showcasing their products, with the former showcasing devices such as Alcatel 5, Alcatel 3 its mid-range version, Alcatel 3V, as well as Alcatel IX that is fitted with a quad-core MT6739 processor. With all these releases being made, demand is bound to hike which will, in turn, result in the release of more second-hand devices into the market.

IT Xchange is one of the largest players in the secondary industry for IT hardware including smartphone, PC and server technology. Contact us to learn more.