The used smartphone market is booming, but people are hanging onto their handsets for longer

In brief: Even though the smartphone market had its worst year for a decade in 2023, there was one sector of the mobile industry that enjoyed substantial growth: used phones. However, there was a troubling trend that could harm sales; people are now hanging onto their phones for over 40 months, meaning fewer devices are available for resale.

Unlike new smartphones, which according to IDC saw a 3.2% decline to 1.17 billion units shipped last year, marking the lowest full-year volume in a decade, shipments of second-hand and refurbished smartphones jumped 9.5% in 2023 from 282.6 million to 309.4 million devices.

IDC projects used phone shipments will reach 431.1 million units in 2027, with a compound annual growth rate of 8.8% from 2022 to 2027. The analyst firm writes that extended refresh cycles, high price points, and macroeconomic challenges are pushing people away from new handsets and toward second-hand/refurbished models.

Although this sounds positive, IDC issued a warning. While the used market continues to grow, it's at a slower rate than previously forecast due to shrinking inventory and weak consumer spending. People are now hanging onto their handsets for longer than 40 months, causing stock shortages. It's noted that trade-ins only make up a portion of the total used inventory.

"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 holding onto their devices," says Anthony Scarsella, research manager with IDC's Worldwide Quarterly Mobile Phone Tracker.

The United States made up almost a quarter of all used phone shipments last year, reaching 81.1 million, while the rest of the world saw 227.6 million shipments. The US' revenue share in this area was 40.4%.

Back in April, Counterpoint Research data showed that iPhones were the dominant force in the refurbished phones market. Their global volumes increased 16% year-over-year in 2022, taking Apple's market share to 49%. Most consumers buying refurbished smartphones opt for flagship and premium models, pushing up average selling prices.

In other smartphone news, we heard this month that Apple stole the top-smartphone-manufacturer title from Samsung last year, marking the first time since 2010 that the Korean giant has missed out on the number one position.