HYLA Blog

Q1 2018 Mobile Trade-In Data: The Secondary Market Gains Momentum

Posted by Sanida Bratt on Apr 25, 2018 8:39:17 AM

 

shutterstock_1016354476

Every quarter, we analyze our trade-in processing data to get a sense of how the secondary market for mobile devices is growing. While there are definitely patterns in the peaks and valleys throughout the year, one things is clear—trade-ins are becoming an increasingly-vital piece of the buying process.

After the Q3 flood of trade-ins following the new iPhone release and the high numbers from the Q4 holiday season, it’s common for Q1 to show a dip in results. And yet, Q1 2018 proved to be a strong one for the secondary market. Let’s take a look back at the mobile trade-in landscape through the beginning of 2018.

Downlaod the Q1 2018 Mobile Device Trade-In Trends Infographic

Leasing Drives More Trade-Ins

It’s been nearly 2 years since mobile carriers made the near-universal shift to device leasing as opposed to subsidy models. Compared to Q1 2017 when 74% of subscribers were on equipment installment plans (EIP), 84% of mobile users leased their devices in Q1 2018.

Standard contracts still exist, but leasing programs continue to grow. And, as a result, trade-ins have become more of the norm as well. In many cases, when a user’s lease is up, they pick out a new device and continue payments—just like leasing a car.

That’s part of the reason trade-in and buyback programs returned $479 million to U.S. customers in Q1 2018 (compared to $444 million in Q1 2017).

Throughout the year, consumers are expected to trade in 140 million devices. But these devices aren’t just being recycled. Now, for every new smartphone sold there’s a pre-owned device that may be reintroduced to the market. And as time goes on, we’ll see even more devices have second, third, and fourth lives.

More Trade-Ins, but Devices Are Living Longer

Despite initiatives like Apple’s iPhone Upgrade Program, which allows consumers to get the latest iteration every year, the average age of used devices is on the rise.

This time last year, the average trade-in iPhone was 2.52 years old. Now, the average age has jumped to 2.76 years. These devices are lasting longer and longer, which is why they can have multiple lives in the secondary market. However, it also means that consumers are holding onto devices longer.

In years past, this might have meant that volumes of used devices would decrease. Thanks to continued advancements in manufacturing, the secondary market has sustained demand despite the fact that people aren’t as quick to trade up.

iPhone Continues Its Secondary Market Dominance

One conversation we had last year was whether the Google Pixel would be able to unseat iPhone as the de facto secondary market device. Despite the success of Pixel 2, our data shows that all 5 of the top traded devices are iPhones.

Average trade-in value has decreased, but that’s the result of age rather than function. The iPhone 6, Q1’s top-traded device, is over 3 years old now. While it’s retained value well enough, it’s no surprise that the average trade-in return is lower than when newer iterations were most traded.

In contrast, devices that lost the most value were all low-end Android devices. This may not be surprising, but it’ll be interesting to see how trade-in value impacts new device sales in quarters and years to come. Will more consumers recognize that buying a higher-end phone will result in greater value when it’s time to upgrade? Only time will tell.

If you want to take a closer look at our Q1 2018 trade-in data, check out the infographic now.

Call to Action for the 2018 Q1 Infographic Summary 

Topics: Device Trade-in Solutions

About This Blog

The HYLA Mobile blog is a place for thoughtful dialogue that will ultimately change the perception of “used” phones around the world. Visit the HYLA website to learn more.

Recent Posts

Subscribe to Email Updates

Interested in Learning More About the Mobile Trade-In Industry?

Visit Our Resources Library Here

Mobile Trade-in Program