Each quarter, we analyze data regarding mobile device trade-ins. Our data includes the most-traded devices, an analysis of devices that return the highest trade-in values, the amount of money returned to consumers in the United States, and more.
Certain aspects of the data remain fairly consistent quarter to quarter. However, this quarterly look into the secondary market says a lot about consumer behavior in the mobile device industry as a whole.
With iPhone 8 on its way in late Q3, let’s take a look at the mobile device trade-in data from Q2 2017.
The Total Value of Device Trade-ins Dropped Between Quarters
In Q1, these programs resulted in nearly $445 million returned to consumers. Now that we’re looking at the Q2 data, we see that the value dropped significantly to $384 million. What happened in the market to spark such a change?
Despite the high volume of Android sales in the United States, Apple’s iPhones drive the secondary market. This is why we see so many upgrade plans like Sprint’s “iPhone Forever” that make it so easy to keep up with each new iteration from Apple.
These programs are starting to create a cycle in the quarterly trade-in trends. With consumers hanging onto their iPhones until the upgrade deals start rolling in, it’s no surprise that transaction values dropped between Q1 and Q2.
However, not all the trade-in data fits into this narrative about the upcoming iPhone release.
Are Consumers Getting the Most for Their Devices?
Even though many consumers are waiting for the next iPhone release, the vast majority of trade-ins were still Apple devices. Much like past quarters, 4 of the 5 top-traded devices were iPhones. In fact, iPhone 6 accounted for 37.9% of Q2 trade-ins and iPhone 5S accounted for 24.3%.
If the market is moving toward more frequent upgrades, why are so many consumers still turning their iPhones in ahead of the new release? Part of the reason is that we haven’t completely settled into the new world of equipment installment plans.
Just like in Q1, the split between consumers with equipment installment plans and standard two-year contracts remained at 76% to 24%. Although carriers ended their two-year contract structures years ago, there are still plenty of consumers who retain that mindset.
This data, along with the fact that the average iPhone is returned when it’s 2.7 years old, shows that consumers aren’t getting maximum value for their old devices. If you look at the devices with the highest trade-in values, you see newer devices like the iPhone 7 Plus and iPhone 7 going for $380.82 and $332.65, respectively.
It’s not surprising that these newer devices are worth more than a device that’s three or four years old (like the iPhone 6 and iPhone 5S), but it does leave an opportunity for carriers and retailers running trade-in/buyback programs.
If you know that cost is the biggest sticking point for consumers upgrading their devices, more frequent trade-ins should be a significant selling point. It’s a win-win for you and your customers.
Stay tuned for a new blog post explaining the ins and outs of device trade-in timing. But in the meantime, download our free infographic on the Q2 Mobile Device Trade-in Data to learn more.
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