The smartphone industry witnessed a year-on-year (YoY) decline in global shipments in 2020, largely because of the COVID-19 pandemic and the economic uncertainty around it. However, this very reason has resulted in strong growth in the used smartphone market.
According to a new data forecast by market research firm International Data Corporation (IDC), the worldwide shipments of used smartphones may have reached a total of 225.4 million units in 2020. The numbers mark a notable 9.2 percent YoY growth over the 206.5 million units shipped in 2019.
IDC says the growth volume in 2020 was not as large as previous market expectations. However, the used smartphone market still fared better than the market for new smartphones. The global shipments of new smartphones are expected to decline by 6.4 percent YoY in 2020.
The research firm expects the used smartphone market to exhibit continued growth in the coming years as well. The global shipments of used smartphones, both officially refurbished and used devices, may reach 351.6 million units in 2024 with a market value of $65 billion. This would also mean a compound annual growth rate of 11.2 percent from 2019 to 2024.
North America was the biggest market for used smartphones last year. The region accounted for nearly one-fourth of the global shipments in 2020 (55 million units). IDC expects this trend to continue over the next four years, with North America's share growing slightly to reach 27 percent in 2024 (94.9 million units).
Global shipments of used smartphones grew 9.2 percent in 2020
The used smartphone market has been growing steadily over the past few years. There could be several reasons for that but the most important one is certainly the rising cost of new smartphones. The cost of smartphones has skyrocketed in recent years.
Phone makers now rely heavily on trade-in programs to sell their flagship offerings as it makes the upfront cost more affordable to consumers. Mobile carriers also over various such programs encouraging consumers to turn over their old device and upgrade.
This rapid growth in trade-in programs means there are now more refurbished smartphones in the market than ever. And this is a win-win situation for both consumers as well as smartphone vendors. Consumers get new-like phones at far lesser prices while vendors grow their market presence.
"Refurbished and used devices continue to provide cost-effective alternatives to both consumers and businesses that are looking to save money when purchasing a smartphone," said Anthony Scarsella, a research manager with IDC. "Moreover, the ability for vendors to push more affordable refurbished devices in markets where they normally would not have a presence is helping these players grow their brand as well as their ecosystem of apps, services, and accessories."