Based on the results of a survey conducted by technology research firm Gartner on American and German consumers, 60 percent of smartphone owners decide to upgrade so that they can own the latest mobile devices available in the market. The survey was done on 5,600 consumers in June of last year.
Also, Gartner's survey results also suggest that apart from boosting the sales figures of high-end handsets, those who opt to upgrade are also helping increase the volume of second-hand smartphones for sale in the global market.
According to Gartner, the market for used smartphones will likely expand to 120 million units by the year 2017. Last year, that figure was only 56 million. In terms of revenue, 120 million units would be equal to about $14 billion, compared to 2014's $7 billion.
Gartner's data shows that 64 percent of upgraders' old handsets are sold as second hand phones. 41 percent of these are either sold privately or traded in for new phones, while 23 percent are handed down to family members, friends, and other users.
Interestingly, a small chunk of the upgraders' old handsets are not sold on the second hand market. As a matter of fact, Gartner found out that 7 percent of the upgraders' old handsets are handed over to official recycling programs.
As Gartner's survey results show, reused smartphones are increasingly eating away at the market share of brand new smartphones. It also shows that more and more people are willing to own second hand devices as opposed to buying a new one. And there is a very interesting dynamic to certain situations wherein second hand buyers actually prefer getting a used high-end smartphone over buying a new mid-range device that may not be that interesting in the first place.
Looking at the big picture, the increase of second hand smartphone sales may have bigger effects on the industry as a whole than previously thought. Sales of brand new smartphones are not the only numbers affected here. So are the revenues of all parties involved in the global supply chain of mobile devices. Entities who are already offering trade-in programs may need to re-examine the market for second hand devices, or at least devise some strategies on how they can take advantage of the increasing volume of used smartphones in the next couple of years.
As for manufacturers of high-end smartphones, they may need to look closely, or at least not ignore, the growing market for second hand devices. Whether they like it or not, an expanding used phone market can pose a threat to their current market share and revenue figures.
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