49% of global second user smartphone sales are iPhones
You can pick up an iPhone XR for around $200 on Amazon these days.
Apple’s services push makes total sense on several key metrics, all of which translate into long-term success for the company’s mobile strategy.
- Apple’s devices remain functional for longer than those made by others.
- This means that second user devices remain popular, and highly functional.
- The second user active is buoyant, and those in it can access Apple’s services too.
With these points in mind fresh Counterpoint research claiming Apple sold 16% more refurbished iPhones in 2022 than it did the year before is good news for Cupertino.
They last longer and people still want them
That’s because not only does it support earlier claims from IDC, but also because almost half (49%) of all second user phones sold in 2022 globally were iPhones, up almost 10 percent year on year. And at the same time the size of the market grew 5% globally.
What’s this mean?
It means Apple retains commanding leads in terms of new device sales while continuing to attract a growing number of users in second hand markets.
That’s good for Apple because it gets to offer those people accessories, addon and services.
It is also interesting that India saw 19% growth in this market, which is going to be a useful metric as Apple strives to woo users in that market – particularly as a noticeable number of those acquiring a second hand iPhone were Android switchers.
What Counterpoint said
“Apple is the fastest-growing brand in the used and refurbished sectors globally. This secondary market demand is affecting new iPhone sales and service revenues in many markets. Apple is a major contributor to the increasing refurbished share as compared to the new smartphone shipments in main markets. The supply crunch is mainly felt for iPhones in refurbished markets.”
Senior Analyst Glen Cardoza said, “The global refurbished markets are going through transitions. Supply remains constrained as consumers are holding on to smartphones for longer. At the same time, demand for 5G is increasing, especially in mature markets like the US, Europe, and Japan. In 2022, 5G made up 13% of global refurbished sales.
More demand than supply
“The business potential of dealing in refurbished smartphones remains high, but the limited supply is affecting most emerging markets like LATAM, Southeast Asia, India, and Africa. Imports from mature markets like the US, Europe and Japan have reduced as they have to cater to their own demand.
“We are looking at a transition where most markets are growing their own repair and refurbishment ecosystems domestically. This is changing the trade routes and reducing China’s imports and exports. Domestic players everywhere are focusing on expansion, partnerships, and additional supply avenues.”
Samsung is the number two most popular second hand device maker, with just 26%.
A step to Apple as a service?
One thing that is happening is that consumers are becoming more aware of 5G. That’s prompting interest in devices with 5G access, and may also make for reduced interest in non-5G iPhones.
This may lead to lower prices on pre-5G models, and likely suggests more of those older devices will be recycled with components repurposed in new devices. Apple is on plan with this, it recently confirmed 20% of all components used in products in 2022 came from recycled sources and continues to work to do more.
Apple could take this a step further, of course, as speculated by CCS analyst, Ben Wood, it’s existing status in the refurbished device market could quite easily support a future Apple device rental service.
“Apple is well-positioned to take greater control of the flow of secondary devices if it chose to,” Wood said. “If it really wants to make in-roads in the market, it could even offer iPhones through a subscription service to guarantee a more predictable stream of returning devices.”
Offering Apple as service could generate $5,000/year from some Apple users, speculated Counterpoint Research.
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