For three years now, we’ve collected and analyzed data about the mobile device trade-in market. Each quarter, we publish our findings on the top traded devices, devices with the highest trade-in values, average ages of returned devices, money returned to consumers through trade-in programs, and more.
Now that we have three full years of data to look at, we have a clearer picture of how the secondary market for mobile devices has evolved.
1. The Continued Adoption of Equipment Installment Plans
In 2016 when we first started publishing our analysis of mobile device trade-in trends, there was a new movement starting in the industry—the end of two-year phone contracts.
To give consumers more transparent pricing, carriers stopped supporting the subsidy model for new device sales. However, our 2016 research showed that 37% of consumers still had standard contracts.
As we head into 2019, equipment installment plans (EIP) cover 86% of consumers, compared to just 14% with standard contracts.
Most carriers now offer deals for customers to upgrade devices after just a year of payments. This injects continuous waves of newer trade-in devices into the secondary market, making pre-owned devices even more attractive to a wider range of consumers.
2. Trade-In Devices Are Getting Older
Despite the growth of the EIP model, 2018 showed that consumers are willing to hold onto their devices longer than ever before. In 2016, the average age of a used device was 2.38 years old. That number jumped to 2.59 years in 2017 and has reached 2.77 years in 2018.
Even with an option to upgrade after one year, consumers are realizing that their existing devices will last much longer than in the earlier days of smartphones. However, these totals don’t just include initial trade-ins. They also include devices being traded after second and third lives.
The secondary market is constantly supplied thanks to increased consumer awareness of trade-in programs and the subsequent benefits to the environment . And as consumers continue to recognize the longer lifespans of various models, secondary market demand will grow.
3. Growing Value of the Secondary Market
One of the best ways to judge the value of the secondary market for mobile devices is to look at how much money is returned to consumer's hands each year.
In 2016, trade-in and buyback programs returned $2.101 billion to consumers. The market grew by about $55 million in 2017. And in 2018, we saw even more growth as $2.266 billion was returned to consumer's hands.
There are a variety of factors that play into this growth of the secondary market, but two stand out. First of all, carriers, retailers, and OEMs have increased their efforts to bring awareness to trade-in programs which are an important tool to help stimulate upgrades and result in new smartphones to be more affordable for consumers.
Another factor is that devices are holding their value longer. The value of specific models depends on demand for those devices in the secondary market. However, for the most part, smartphone technology has reached a point where devices are useful for much longer than in years past. As a result, the average value of iPhone trade-ins reached $158.57 in 2018, compared to $142.55 in 2016.
Mobile devices have become such integral parts of our lives that secondary market growth is expected to grow to $39B by 2025, nearly double of the $20B we saw in 2017.
Stay Ahead of the Mobile Trade-In Industry
These three trends are major factors in the mobile device industry becoming a more effective part of the circular economy. Rather than producing devices for one life and disposing of them in landfills, the secondary market helps extend the lives of mobile devices while also recycling materials accordingly.
But the secondary market is complicated. There are many moving parts, making it difficult to efficiently manage the supply chain without a proper strategy.