The increased demand for 5G capable handsets can also potentially boost the used smartphone market, according to a new study.
The research comes from Blancco Ltd, an international data security company that provides data erasure solutions. The firm surveyed 5,000 global consumers and discovered that 68 percent of them would be willing to trade-in their old smartphones to upgrade to 5G.
That's in line with previous predictions, which said the next generation of cellular connectivity will entice upgrades.
Since the past couple of years, the smartphone market has been in a decline. Experts believe that a lack of exciting innovations is a major reason behind that.
However, since 5G will unlock new potentials, many users will probably replace their handsets in 2020.
According to Blancco, 51 percent of global smartphone users have been waiting for 5G to upgrade their devices. The firm says that 45 percent of American consumers stuck to their existing phones for longer in anticipation of 5G availability. 61 percent of them plan to get a 5G device and 54 percent would like to trade in their older phones.
Based on the results and the total number of global mobile users, Blancco believes that the used smartphone market will get an additional 810 million handsets this year.
The used smartphone market is expected to be valued at $67 billion in 2023. It's still in its infancy, which means OEMs, telecoms, and third-party logistics providers (3PLs) can earn a lot of revenue from it.
However, given that around 206.7 million used handsets were shipped for re-sale last year, collection of 810 million devices will be no easy task.
Thus, while there is surely room for growth, stakeholders will have to step up their efforts to prepare the ecosystem.
All stakeholders stand to gain from the success of used smartphone market
Vendors and telecom operators should get ready to receive a plethora of devices through buy-back and trade-in programs. To make the used smartphone marker prosper, the stakeholders will have to process the devices securely and efficiently to prepare them for resale.
According to estimates, over a third of global consumers aren't aware of the used smartphone market. 62 percent of consumers have no experience of trading in a device. And in case you are wondering, only 46 percent have apparently traded in their old phones.
51 percent of the respondent said that the credit that will go towards the purchase of a new handset is a major incentive when turning in their old device. On average, global consumers expect to get 35 percent of the original purchase price for their old handset.
Without a proper evaluation system, achieving an accurate valuation will not be possible.
One major deterrent to the growth of the used smartphone market is the concern about data security. 60 percent of the respondents say they would require assurance on data management before trading in their old phone.
Around 77 percent of the global consumers fear that data on their devices might get compromised after trade-in.
Second-hand smartphones are a cost-effective alternative for people who want to purchase a handset without breaking the bank.
For vendors, it's an opportunity to increase brand awareness and grow their ecosystem of accessories, apps, and services.
Since the used smartphone market is still new, many consumers will be engaging in it for the first time this year. Thus, it's vital that their experience is satisfactory. Otherwise, they are unlikely to return. If this happens, the upgrade inertia that has stalled the market in recent years might continue.