It seems like we’re just now starting to see the impact Apple’s iPhone 7 release has had on the secondary smartphone market. And yet, the latest-and-greatest iPhone is coming quickly.
Details about the iPhone 8 are still unclear, but it’s never too early to predict how the secondary market will react to the Q4 influx of used devices and trade-ins.
As we look ahead to the iPhone 8 release, one thing is becoming clearer—it’s beginning to look a lot like 2014.
How the Secondary Smartphone Market Handled 2014’s iPhone Boom
Apple had a good year in 2014—and that’s an understatement. This marked the first time Apple offered the iPhone/iPhone Plus models, deviating from expectations and sparking a supercycle of device trade-ins.
Apple’s sales and share prices soared, but the secondary market wasn’t so lucky. As consumers flocked to trade-in programs to take advantage of iPhone 6 promotions, the secondary market was flooded with so many used devices that values plummeted.
These trade-in devices lost so much value so quickly that it felt like a crash.
But what does any of this have to do with the fast-approaching iPhone 8 release? More than you might think.
Will the iPhone 8 Cause Another Secondary Market Crash?
First is the fact that 2017 is the 10-year anniversary of Apple’s original iPhone release. Sentimental value aside, analysts seem to agree that something big is coming from a design perspective. Again, the details aren’t clear—but it will be surprising if Apple lets this year pass by as a simple hardware update. This is why people are focusing on the iPhone 8 as opposed to the iPhone 7/7S that you might expect after last year’s release.
The second reason for bullish iPhone 8 sales expectations is the status of the Chinese mobile phone market. In addition to being the first iPhone with a plus model, 2014’s iPhone 6 was also the first to be released in China.
While some in China may have upgraded their iPhone 6 already, we expect a large wave of trade-ins when the iPhone 8 is released later this year. The volume of Chinese trade-ins combined with the large U.S. market will create a supercycle very similar to 2014.
However, you shouldn’t expect the secondary smartphone market to suffer the way it did 3 years ago. The market is more mature at this point and it’s unlikely that vendors will be caught off guard by the increased supply of devices.
Secondary market pricing will dip—it does every year during Q4 when the new iPhone releases—but it will only be a seasonal drop off as opposed to a crash. This is going to be a big year for new iPhone sales, but the secondary market is ready this time.
Preparing for the Mobile Trade-in Frenzy
Apple’s iPhone release cycles are so consistent that it’s hard to be surprised when the new device comes to market every year. But that doesn’t mean some years aren’t more stressful than others for the secondary market.
You know promotions are going to run wild for the new iPhone and consumers are going to be trading in devices in mass volumes. If you want to learn how to get yourself ready, download our free white paper, 15 Steps to Creating an Efficient Mobile Trade-in Program.
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