Every quarter we compile data about the mobile device trade-in market. We look at the most-traded devices, the phones with the highest trade-in value, the money returned to consumers over the quarter, and more.
In Q1 2017, we can use the data to revisit the contract vs. leasing debate and see if there’s any competition between iPhones and Pixels in the secondary market.
Most Subscribers Are Leasing—But Are Upgrades Changing?
We’re about 1 year removed from the mobile phone industry’s shift from two-year contracts to programs that look more like leasing deals.
Despite having a year (or more in some cases) to phase out standard contracts, they are still used with 26% of mobile subscribers compared to 74% of subscribers on equipment installment plans (EIPs). The industry may be trending toward universal EIPs on the surface, but trade-in data from Q1 2017 tells a different story.
There may be greater perceived freedom with leasing programs, but the average age of used devices in Q1 2017 (just under 2.5 years) shows that two-year contracts are persisting in their essence.
While the average Android device is traded in when it’s 2.40 years old, iPhone users hold out on upgrading until their devices are 2.52 years old, on average. This is a small discrepancy, but could be important considering the slew of trade-in deals that pop up every time a new iPhone is released. The question is, are iPhone owners holding off for the 10-th anniversary iPhone?
If so many iPhones are traded in on a standard upgrade cycle, how much reach are annual buyback programs achieving? You’d need to do more research for a definitive answer, but Apple’s secondary market dominance in Q1 2017 would suggest it’s not a major concern.
It’s Early, but Pixel Doesn’t Seem Poised to Overtake iPhone for Trade-in Dominance
Following the Q4 2016 release of the iPhone 7 and iPhone 7 Plus, it’s not a big surprise to see that each of the 5 most-traded devices are iPhones. The most traded-in device (by a large margin) was the iPhone 6—Apple’s last major release in its cycle.
Year in and year out, we expect to see this level of consistency from Apple’s secondary market dominance. Consistent supply and demand is how iPhones achieve the highest trade-in values each quarter.
In Q1 2017, the iPhone 7 Plus ($390.11) and iPhone 7 ($331.84) had the highest trade-in values. But is Google giving Apple a run for its money with Pixel, yet?
Pixel XL came in with the third-highest trade-in value ($282.40) and the smaller Pixel model had the fifth-highest value ($242.43). With an average gap around $100 per device, it would seem Google has a long way to go before it can unseat Apple’s secondary market dominance. However, the consistency factor will be the story to watch moving forward.
Mobile Device Trade-in Programs—Still a Win-Win for Carriers and Consumers
We talk a lot about how mobile device trade-in programs can help you drive new revenue. But we can’t forget that these programs are win-win solutions for you and your customers.
In Q1 2017 alone, we helped carriers return $444.229 million to U.S. customer hands through trade-in and buyback programs. You might be pushing the program for your own bottom line, but that doesn’t mean consumers aren’t benefitting.
However, building your own win-win trade-in program means understanding the economics and dynamics of the secondary market. If you want some more insight into the Q1 2017 Mobile Trade-in Data, download the free infographic.