With the price of the latest flagship smartphones firmly set in the four-digit range, the market for refurbished mobile devices is experiencing a surge in demand. Consumers are increasingly looking for more affordable alternatives without sacrificing quality or performance.
A recent report highlights that users who previously owned Apple iPhones and Samsung Galaxy S models were equally surprised by the high cost of the newest flagship models. This growing price gap has led many to reconsider their purchasing decisions.
In the fourth quarter of last year, the smartphone industry saw a significant drop in shipments, marking a record low for new-generation devices. From October to December 2017, smartphone sales declined for the first time in three consecutive quarters, signaling a shift in consumer behavior.
As more people opt to spend hundreds of dollars on refurbished devices, it becomes clear that manufacturers are not maximizing profits from brand-new models. This trend is reshaping the entire industry, forcing companies to rethink their strategies.
Industry experts note that today’s new smartphones often go through multiple users before being discarded. The trend of buying refurbished phones is no longer limited to developing countries like India or Africa—now, it's becoming mainstream even in developed markets.
In fact, 93% of buyers on B-Stock, an online auction platform for used smartphones, are based in the United States. This shows how deeply the refurbished market has taken root in the American consumer base.
According to BayStreet Research LLC, in 2014, when carriers typically subsidized phone purchases with two-year contracts, U.S. consumers upgraded their phones every 23 months on average. However, the latest data reveals that this cycle has now stretched to 31 months, with expectations of reaching 33 months by next year.
Companies like Apple benefit from the sale of refurbished iPhones because these customers tend to engage more with the ecosystem—purchasing apps from the App Store, streaming content via iTunes, and using Apple Pay for in-store transactions.
During a conference call in February, Apple CEO Tim Cook acknowledged the growing trend and emphasized that the reliability of the iPhone is usually "very good." However, he also mentioned that some older iPhone models had been throttled due to aging batteries, which caused performance issues during heavy tasks.
In response, Apple reduced the cost of battery replacements by $50, bringing it down to $29 for the rest of 2018. This move was aimed at restoring consumer trust and improving user experience.
Meanwhile, Samsung is also taking notice of the rising demand for used smartphones. DJ Koh, head of Samsung’s mobile business, stated that the company may adjust its strategy in light of this trend. While Samsung hasn’t introduced low-cost models in certain regions, it is considering offering refurbished flagship models to cater to this growing market.
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