Second-Hand Smartphone Market Poised for Continued Growth, Apple Secures Close to 50% Market Share, Says TrendForce

TrendForce reports that the global pandemic and extended average device replacement cycles of 36 to 42 months have curtailed smartphone production growth. Consequently, production levels have yet to rebound to pre-pandemic levels. Despite these challenges, the market for refurbished phones has been expanding, representing about 11% of the total market share in 2022 with approximately 167 million devices. The largest market for these pre-owned devices remains China, with Europe following behind in second place. Interestingly, India’s burgeoning market, bolstered by its vast population, is developing rapidly and is projected to potentially rival China’s sales of refurbished phones by 2026. As far as brand performance goes, Apple dominated the market in 2022, capturing 45~50% of sales, while Samsung claimed the runner-up position with a 25~30% market share.

The recent surge in the second-hand smartphone market can be largely attributed to increasing demand from emerging countries, and to the challenging nature of hardware and software innovation for new smartphone models. This difficulty in innovating is leading to a diminished desire among consumers to upgrade their devices. Brands and retailers have introduced trade-in promotional models to overcome this bottleneck in new device production. These initiatives not only stimulate the sales of new devices, but also ensure that replaced old devices are reused in the mid-tier market, or as transition devices for consumers in emerging countries moving from feature phones to entry-level smartphones. Furthermore, the profitability of the second-hand smartphone market has attracted a number of e-commerce platforms in recent years.

Notably, a performance surplus when it comes to key smartphone components is seen as another contributing factor to the elongation of the replacement cycle and prosperity of the second-hand market. Components, such as application processor (AP) chips are being continually updated, while the data transfer speed of mobile DRAM significantly surpasses that of other applications. In response, Android brands have been consistently boosting the memory capacity of their flagship models due to marketing considerations. Additionally, smartphone brands are dedicated to concurrently upgrading the software and hardware of their camera lenses. Their image quality now rivals that of entry-level cameras, making them a highly-suitable option for everyday use. Finally, the swift transition to OLED display panels—coupled with increased frame rates—enhances the attractiveness of these devices.

Furthermore, the prolonged oversupply of both panel and memory components has prompted a significant plunge in ASP. From the perspective of display panels, this downward trend has benefited the repair industry. Meanwhile, a decline in memory prices has notably increased the capacity of DRAM and NAND Flash in new devices. Consequently, the replacement cycle has been stretched even further, providing a boost to the used phone market. All these contributing factors are fostering a circular economy in the smartphone industry, and facilitating the ongoing expansion of the second-hand phone market.